The policy objective of most central banks, including the Reserve Bank of Australia (RBA), is full employment, even though it continues to be the failed promise of governments at every level.
The federal government pledged to create one million jobs over five years when it was elected in 2013, a rate of more than 16,500 jobs a month. Yet in its first year of office less than 12,000 jobs were created each month as the official unemployment rate went up.
It was a trend that most observers expected would continue, compounded by the end of the mining boom and the continuing loss of manufacturing jobs — which is why last month’s unemployment statistics seem implausible.
With a slightly increased participation rate, the Australian Bureau of Statistics (ABS) figures released this month showed unemployment falling, from a downwardly revised 6.2% in November to 6.1% in December.
Even more surprising were the ABS figures, which showed that 41,600 full-time jobs were created in December. With 4100 part-time jobs lost, this meant an overall increase of 37,400 new full-time jobs. This should have been reflected in an increase in aggregate monthly hours worked, but according to the ABS they actually fell.
Unfortunately, these statistics reveal more about the reliability of the ABS figures than they do about the state of the economy.
The ABS Labour Force Survey has been collected for several decades. Despite some obvious flaws — anyone who works for just one hour a week is considered employed — it is nevertheless considered one of the country’s most important economic statistics.
For advanced capitalist societies to function above that of banana republics, they have to actually know, with some degree of certainty, what’s happening with the leading indicators of their economies.
The rates of inflation and unemployment are important factors in setting monetary and fiscal policy, so it is important to get them right. But last year, the ABS was forced to admit that their monthly job figures were incorrect.
This followed the release of the August statistics, which showed an extraordinary increase of 121,000 jobs — a figure so fanciful that nobody believed it. The ABS response was to announce that it would conduct a technical review into the collection of its labour force data.
The review made 16 recommendations, which the ABS said in early December it would accept. These ranged from scrapping the supplementary questionnaires that it uses alongside its surveys to replacing its computer system.
The union that represents ABS workers, the Community and Public Sector Union (CPSU), has a different reasoning for the dodgy data. It points out that the ABS has lost 350 of its staff after a $10 million reduction in its budget under the ALP, followed by a $68 million cut by the Coalition in the recent budget.
The union’s deputy national president, Alistair Waters, said: “Surveys have been cut altogether, we’ve seen changes to the methodology for doing surveys that really aren’t working properly … Moving to trying to collect data online, that’s just leading to an awful lot of workarounds being done and that’s often leading to interviewers having to go back into the field to re-interview people.”
When the ABS unemployment figures might next be relied on with any certainty is anyone’s guess. But what’s missing in this debate is an acknowledgment of the plain fact that full employment capitalism collapsed in the 1970s and it will never return.
There are now about 750,000 unemployed people in Australia, and about one million under-employed, all competing for a mere 145,000 job vacancies. The Newstart allowance has not risen in real terms since 1994, so it now stands at half of what is needed to survive above the poverty line.
The policy response has been to shift the blame for unemployment onto the unemployed and to punish them accordingly.
This is why the formation of Australian Unemployment Union is important. It is dedicated to fighting back against the remorseless attacks on the unemployed, but it can only succeed with broad community and union support.
This is why we should all get behind it.