Tasmanian Times

The individual has always had to struggle to keep from being overwhelmed by the tribe. If you try it, you will be lonely often, and sometimes frightened. No price is too high for the privilege of owning yourself. ~ Friedrich Nietzsche

The individual has always had to struggle to keep from being overwhelmed by the tribe. If you try it, you will be lonely often, and sometimes frightened. No price is too high for the privilege of owning yourself. ~ Friedrich Nietzsche

Economy

Unemployment: an exercise in spin …

Political spinners love statistics. So when the monthly unemployment data for December came out from the Bureau of Statistics, their little eyes shone and their keyboards began to glow.

Let’s get one thing straight. The moving was done by the spinners, not the figures. The figures showed nothing much had happened over the month in the Tasmanian employment story. But that didn’t stop our political leaders.

Media releases came swiftly from the Treasurer, Peter Gutwein and his opposite number, Scott Bacon.

“Tasmania’s unemployment rate has fallen to 6.4%, with 225 new jobs created last month,” said Mr Gutwein’s release.

“Another 600 full-time jobs were lost last month,” said Mr Bacon’s release.

Eh?

Let’s look at the actual figures. They’re more complex and nuanced than either party wants you to know.

For the overall unemployment rate, there are three series of figures: the original raw data, the seasonally adjusted series and the trend series.

The original data bounce around, as you’d expect, and one month’s figures can’t readily be compared with another. The seasonally adjusted data try to allow for known peaks, like pre-Christmas, and troughs, like summer holidays, but are still vulnerable to short-term statistical quirks.

The trend series smoothes out the peaks and troughs very nicely but uses a complex system of weighting (called a 12-period Henderson moving average, if you’re interested) that essentially ignores the most recent three months. So the trend series isn’t much good at telling you what’s happening right now.

First, let’s look at Mr Gutwein’s statement that the unemployment rate in Tasmania had “fallen” to 6.4%.

In trend terms, the rate hadn’t gone anywhere between November and December: 6.4% both times. According to the seasonally adjusted data, the rate went up ‒ from 6.3% in November to 6.4% in December.

Mr Gutwein, of course, didn’t actually say he was measuring the monthly change, though anyone reading his release could, and probably would, think he had. You have to go back to October to find a trend unemployment figure higher than it is now, and to September to find any improvement in the seasonally adjusted figure.

Mr Gutwein also claimed that 225 ‘new jobs’ were created last month. But the total number of employed people, according to the ABS survey, stayed the same in seasonally adjusted terms and rose by only 200 in trend terms.

In other words, nothing happened.

Mr Bacon said “another 600 full-time jobs were lost last month”. That’s sort of true, but only if you look at the trend series, which tell you almost nothing about a single month’s change. He could, of course, have quoted the seasonally adjusted data, which would have been more to the point, but that wouldn’t have helped his political case. According to those figures, there were 2600 more jobs in December than the month before.

Mr Bacon’s other point ‒ that full-time employment has been in decline for a couple of years and has been replaced by part-time employment ‒ is true enough and has serious social and economic implications.

But it has been a long-term situation all over the country ‒ and in most of the developed world ‒ and is a factor of a changing economy over which state governments, Labor or Liberal, have very little influence.

Unemployment rates are much more a factor of the broad state, national and international economies which move in ways far from the control of local politicians. They like to trade credit and blame because it suits them, but we shouldn’t take any of them too seriously.

*Martyn Goddard is a Hobart-based policy analyst specialising in health issues. He is a former journalist and ABC documentary maker who became involved in health policy during the AIDS crisis in Sydney. Since then he has been a member of the main Commonwealth advisory bodies on AIDS and hepatitis and was the first consumer member of the committee that lists drugs on the PBS. He was also health policy officer for the Australian Consumers’ Association. For the past decade he has concentrated on examining and explaining Tasmania’s health issues. His extensive articles on Tasmanian Times are HERE

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2 Comments

2 Comments

  1. Kim Peart

    January 22, 2017 at 10:03 am

    Unemployment is driven by the political need to maintain around 5% unemployment, which is viewed as full employment, to keep the wheels of growth turning, so the well-off can grab a larger share of the national pie, and the super-rich make an absolute killing.

    Simple really, but who wants to address the sleazy question of how the bounty of the nation is taken from the poor and given to the well-off and the super-rich?

    Until we wake up and break the sleaze barrier, we will continue to entertain a system that expects high levels of unpaid work, and drives over-work, under-employment, unemployment, poverty and homelessness, where health goes downhill rapidly and some people die by freezing to death, or at the boots of a spoilt rich kid out for a joy killing (Mousy in Melbourne).

    Will we decide to build a nation that includes a Fair Go for all citizens?

    What will that take?

  2. john hayward

    January 21, 2017 at 12:11 am

    Obviously, candour and honesty don’t mix with the LibLab messages. After the smashing success of the Trump super-junk recipe, they aren’t likely to get a run anytime soon.

    John Hayward

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