What do unemployment terms really mean?

The most recent unemployment data released indicates the unemployment rate in Australia is at 5.8%, which in the grand scheme of things is really not that bad. There are still a large number of people who want to work. Some are actively seeking work, others have become discouraged, and still others are working but not enough hours to make it worthwhile.

The Australian Bureau of Statistics, use different terms to define the various aspects of employment and unemployment. The media tends to focus on only one of the terms: Unemployment. This is understandable; the term provides a generalized snapshot of the employment conditions adequately enough.

However, the ABS uses additional terms to provide clarity regarding who is considered unemployed, who is underemployed, and who is short-term or long-term unemployed. Let’s look closer at these terms to gain a better understanding of what they mean.

Unemployed people are actively seeking work.
That is it in a nutshell, but what does the government consider “active” job-seeking? A person who is calling on employers, filling out applications, sending out resumes and participating in interviews is considered to be actively seeking work. They are applying for jobs daily.

Those who are not doing these activities, but are not working are not defined as unemployed. Instead they are considered out of the work market. So, when you are looking at the statistics you can picture in your mind people like you who are actually seeking a job, rather than an individual who is not seeking work for various reasons, including being disabled or in school to better themselves.

Underemployed people are not working enough hours.
One might think underemployed means a person is working below their skill-level. And while that may be true in many cases, what it really means is that the worker is working fewer hours than they would prefer, or they are working part-time when they would rather be working full-time.

Another way of looking at it is that the worker needs a certain number of hours to earn enough to take care of the bills, set aside savings, and perhaps have enough income for purchases such as clothing, going to films, vacations, and the like. An underemployed person is not able to meet these needs.

 
Short-term vs Long-term Unemployment
Short-term unemployment is defined as a short period between leaving school and finding work or short transitions between jobs. Most workers who are considered to be short-term unemployed are ages 15-24. These are the young people who work seasonally or when school is not in session. Young adults who are recent graduates are also considered to be short-term unemployed.

Long-term unemployment is defined as unemployed job-seekers who have not worked over a 12 month or longer period. There are various reasons why some workers are unable to find work over the long-term. Some workers may have issues with transportation to look for work or may not be able to relocate for a new job.

Older workers have distinct issues that may cause them to experience long-term unemployment. In some cases they may not have an education that prepares them for the modern job market or they may have higher skills that do not translate well among available jobs. They may be more particular regarding which jobs they apply for in the market. Eventually, older workers may even withdraw from the job market completely and retire, thus no longer be considered unemployed as defined above.

Now you have a better understanding of what the terms mean when the government and the media rave about the unemployment rate and a clearer understanding of what it really means to be a job-hunter in Australia. If you are dealing with unemployment, learn about ways to get through this period here.

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