Employment for all is an important social goal and, according to John Freebairn, 5% unemployment should not be regarded as the best which can be achieved. He argues that “the headline unemployment rate substantially understates the numbers who would like a job”. Even unemployment at 5% "leaves over 500,000 people out of a job and with a sense of less than full membership of the community. Over 17% of children are living without an employed parent” (Freebairn, 2005). Improving employment options for young people, people with disabilities, indigenous people and older residents is important for a community that values people.
Vibrant local economies have a healthy mix of business. The local economy is then less susceptible to cyclical and structural change. An understanding of the types of business in the area will highlight demands placed on infrastructure, services and skills base. Local employment options for residents will make the municipality a desirable place to live and reduce economic leakage and greenhouse gas emissions due to reduced travel demands. “One of the key outcomes of local industry is local employment provision. It is defined as the ratio of workers engaged in an area to the residential population. Many regions in Australia, especially in the metropolitan areas, attract large numbers of commuters to the region for work on a daily basis. These regions receive a high rating for local employment provision. Conversely a low level of employment provision suggests that residents have to travel outside the region to their places of work” (National Institute of Economic and Industry Research, 2004).
DEEWR produce quarterly estimates of unemployment and the unemployment rate for each Statistical Local Area (SLA) in Australia. Two series are produced – a smoothed series which is the average of the last four quarters, and an unsmoothed series. The smoothed series aims to minimise the variability inherent in the quarterly estimates, and DEEWR strongly encourages users to refer to this series.
The smoothed series for each June Quarter effectively gives the average number of unemployed and unemployment rate across the whole of the year ending June (i.e. the financial year), and it is these estimates which are included on the CIV website.
The data produced by DEEWR are based on data from the Labour Force Survey published by the Australian Bureau of Statistics (ABS) at Labour Force Region (LFR) level. The number of unemployed and in the labour force in each SLA is produced by apportioning the level of these two estimates for a LFR across each of the SLAs within that region. For the number of unemployed, the distribution of Centrelink Newstart and Youth Allowance (Other) beneficiaries is used; for the number of persons in the labour force, weights derived from the 2001 Census of Population and Housing are used.
Centrelink unemployment beneficiaries data at postcode level have been concorded to SLAs using population-weighted concordances based on the 2001 Census. This assumes that (i) beneficiaries are uniformly distributed within postcodes and (ii) postcode boundaries have not changed since 2001.
The use of 2001 Census data to derive weights to distribute LFR labour force estimates assumes that the proportional distribution of each LFR's labour force between the SLAs within that region has remained stable since the 2001 Census.
People Who Are Unemployed: expressed as a percentage of the labour force. This rate is commonly known as the unemployment rate.
The unemployment rate for each LGA and Region has been calculated by CIV using aggregations of the numbers of unemployed and in the labour force published by DEEWR at the SLA level. As the published estimates relate to SLAs used for the 2001 Census, aggregates also relate to 2001 boundaries. Any boundary changes to LGAs since 2001 have not been taken into account. Since 2001, Delatite (S) has been split into two LGAs broadly following previously existing SLA boundaries, and data have also been produced by CIV for Benalla (RC) and Mansfield (S) using the SLA data.
Notes on the ABS Labour Force Survey:
(i) Definition of employed persons: Persons who, during the reference week:
- worked for one hour or more for pay, profit, commission or payment in kind in a job or business, or on a farm (comprising employees, employers and own account workers); or
- worked for one hour or more without pay in a family business or on a farm (i.e. contributing family workers); or
- were employees who had a job but were not at work and were:
- away from work for less than four weeks up to the end of the reference week; or
- away from work for more than four weeks up to the end of the reference week and received pay for some or all of the four week period to the end of the reference week; or
- away from work as a standard work or shift arrangement; or
- on strike or locked out; or
- on workers' compensation and expected to return to their job; or
- were employers or own account workers, who had a job, business or farm, but were not at work.
(ii) Definition of unemployed persons: Persons who were not employed during the reference week, and:
- had actively looked for full-time or part-time work at any time in the four weeks up to the end of the reference week and were available for work in the reference week; or
- were waiting to start a new job within four weeks from the end of the reference week and could have started in the reference week if the job had been available then.
Notes on the DEEWR estimates:
(i) Due to both the methodology used and significantly higher data variability, it is not possible to derive reliable unemployment and unemployment rate estimates for particular groups (i.e. males, females, youth) at small area level. Such data can be produced from the five-yearly Census of Population and Housing, but will not be strictly comparable with the DEEWR data. See here for information on the comparability of data from the Census and the Labour Force Survey.
(ii) The DEEWR data are synthetic estimates based on multiple data sources, and it is therefore inappropriate to derive estimates for the number of employed persons from these statistics.
Freebairn, J. (2005). Opinion. Melbourne Institute News. September 2005. Melbourne Institute of Applied Economic and Social Research. Issue 9.
The purpose of the methodology is to produce small area labour market estimates that reflect the regional disparities of the Centrelink data, while being consistent with the ABS Labour Force Survey estimates. It is worth noting that not all beneficiaries of Centrelink unemployment benefits would be classified as unemployed in the Labour Force Survey, while not all people classified as unemployed in the Labour Force Survey would be recipients of Centrelink benefits.