Tasmania has the nation’s highest rate of labour force under-utilisation ‒ the number of people either unemployed or underemployed ‒ according to official figures.

This rate of ‘true’ or underlying unemployment has been the highest in Australia for at least the most recent 12 months for which figures are available, in both seasonally-adjusted and trend terms. It belies the headline unemployment rate, which has shown some improvement and has been overtaken by South Australia.

The under-utilisation rate has been climbing in most states over the time from the May quarter of 2014 to the May quarter of 2015 and now stands in Tasmania at 18% in trend terms and 18.3% seasonally adjusted.

The Australian Bureau of Statistics regards as employed any person with at least one hour of paid work a week. That means the headline rate misses large numbers of people with too little work to achieve a living income.

Tasmania’s under-employment rates ‒ people who have some work but need more ‒ has also been the nation’s highest for the most recent five quarters.

The rate of youth unemployment, though it appears to have been falling over the first half of 2015, is nevertheless Australia’s highest. For 15-to-24 year olds, the rate was 16.2% in July, against a national average of 11.7%.

Long-term unemployment is also a problem. Of the 16,300 people out of work in Tasmania in July, 41% had been out of work for over six months.

The ABS data confirm that the impact of unemployment and under-employment is not spread evenly across the state. Greater Hobart, with an unemployment rate of 5.6%, is doing comparatively well, at least partly due to major construction projects in the city.

For the rest of the state, the figure jumps to 7.1% and to 7.5% for the north-west and west.

The social consequences of this are obvious. But the economic consequences of so much unused labour capacity are also serious.

Despite what politicians like to claim, state governments have relatively little control over the direction of their broad economies. They have neither the power nor the money.

So their core job should be to ensure those aspects of the social safety net for which they are responsible are adequate and functioning.

There is plenty of evidence to suggest that neither the government social welfare sector, nor charities, are presently able to cope with the demand that is a direct result of the state’s employment situation.

Nor are the health and education systems. Higher unemployment predictably results in higher caseloads for public hospitals, which are already unable to cope with demand. And education ‒ particularly vocationally-based education ‒ provides the main path out of unemployment and long-term poverty.

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Taster …

Tasmania has a two-speed economy: Greater Hobart is doing reasonably well; the rest of the state is far behind. This shows up clearly in employment data. Launceston and the north-east has an unemployment rate of 6.8%, compared with 5.6% in greater Hobart. The west and north-west continue with the worst rate: 7.5% in June.


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