‘Full employment’ will be redefined to reflect modern labor markets, employment white paper reveals

The Federal Government intends to put ‘full employment’ at the heart of Australia’s policy framework and institutions to reduce structural unemployment and keep unemployment rates as low as possible over the long term.

The employment white paper published on Monday says the current definition of full employment is too narrow.

The report says policymakers need to recognize the reality of underemployment and underutilization in the economy and the impact they have on communities across the country.

In the document, the government plans to use available policy tools to remove barriers to work, help Australians acquire the skills they need and ensure people have secure jobs with fair pay. It has said.

That would contribute to lower structural unemployment, help the economy maintain labor market underutilization for longer periods of time, and help the Reserve Bank maintain much lower unemployment rates, the report said. Says.

RBA Governor Michelle Bullock backed the government’s new definition.

What is full employment?

The White Paper states that how full employment is defined, measured and pursued has a significant impact on people.

And when we talk about full employment, we need to take into account the reality of underemployment and underutilization in the economy.

It found that for every Australian classified as unemployed in labor force statistics, there are four others who either want to work but aren’t working, or want to work more.

Currently in Australia,

  • Half a million people are officially classified as unemployed. That means they want to work, are actively looking for work, and are available to work.
  • However, an additional 1.3 million people want to work but are not actively looking for work or are not immediately available for a variety of reasons. Along with the unemployed, these workers are classified as ‘potential workers’.
  • And a million workers would like to work more hours, but they don’t have the opportunity. These workers are classified as underemployed.

The total number of hours these people are willing to work equates to 1.4 million full-time jobs.

You can see what that says in the graph below.

In February, around 500,000 people were officially classified as unemployed (dark blue column), but a further 1.3 million people were out of work and not included in the unemployment rate (light blue column). The Bureau of Statistics says they are “potential workers”.

The government has made clear in its white paper that it wants to expand the concept of full employment to include the reality that the labor market is underutilized.

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