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Under-employment: the job description has changed

When Sasha moved from Bega on the far south coast of NSW to Canberra to seek out more job opportunities, she soon realised that moving to a larger city did not necessarily mean more access to work.

The 20-year-old secured a job at a cinema and estimates she works, on average about 23 hours a week. Some weeks more, some weeks less, but the nature of her job is shift work and she only receives more hours if there is demand at the cinema complex.

In some weeks, she will have enough money to cover bills and basic cost of living, while in others she must draw on her savings from those good weeks just to get by.

There is no safety net for Sasha. If she doesn’t keep up, she faces the very real possibility of going hungry, missing rent, and in her worst moments, she was couch-surfing for months at a time trying to find a place that she could afford to rent.

“Alot of people (don’t) seem to understand that they’re choosing not to spend money and they’re choosing not to buy certain things because they want to save for something, whereas for me, it’s literally all I have and so I don’t have that flexibility with my money at all,” Sasha says.

This is a reality that is facing more and more young Australians. According to Australian Bureau of Statistics (ABS) data, more than 1.8 million people living in Australia are underemployed, and 35 per cent of them are between the ages of 15 and 24.

Despite these alarming figures, awareness of underemployment doesn’t seem to have reached the wider population.

Sasha feels that because “people don’t see the downtime, they don’t see me when I’m not at work or not out, so they think that I’m getting by based on what they do see.”

Underemployment is when a worker has a job but wants to work more hours. It even affects workers who normally work full-time, but due to a lack of work in a certain week, are asked to work less hours to suit the business.

Many of those 1.8 million Australians want to work more to support themselves but are finding that their employer can’t or won’t offer the hours.

Underemployment is a relatively new concept in the field of economics. When the ABS first started recording employment data, most jobs were full-time positions, and under-employment was not a statistic that they tracked.

But Australia has seen a phenomenal rise in part-time and casual employment, with many companies only offering a handful of full-time positions and the remainder of the workforce is made up of jobs that only offer work during peak periods.

According to the international Organisation for Economic Cooperation and Development, Australia has the 3rd highest underemployment rate out of reporting nations.

Why is this such an Australian issue? Professor Bob Gregory from the ANU College of Business and Economics says that it is due to the increased pressure on businesses to perform and grow to stay viable in the Australian economy.

“As the (economic) pressure has built up the employers are increasingly only wanting people when they need them,” Professor Gregory says.

“You’re not hiring people 9-to-5. The best thing, in hospitality, for example, is if you can hire people for the breakfast rush, the lunch rush and so on, and that’s happening everywhere.”

This doesn’t completely explain the issue. The other factor affecting our extremely high underemployment rate is the type of jobs that are available to Australians.

Where we once used to have a range of manufacturing- or labour-based jobs, more and more work is shifting to retail or service-based areas, according to Phil Lewis, Emeritus Professor and Director of the Centre for Labour Market Research at the University of Canberra.

“Nearly 80 per cent of us work in the service sector. The more you’ve got a service-based economy the more you have people working irregular hours,” Professor Lewis says.

As a result, the reality of finding work for Australians has changed significantly, and this economic shift has happened while the way we look for work is still catching up.

This is causing people to be stuck treading water, working just enough hours to get by, but not being able to put any money aside to save for their future. They are living paycheque-to-paycheque for years at a time, much longer than they used to.

Professor Gregory says: “As a society moves from one sort of equilibrium loosely speaking to another, not everything adjusts at once. A part-time worker can work part-time year after year after year and not accumulate much.”

This is indicative of how underemployment may be affecting people for long periods rather than being what was once thought to be a short-term problem.

While Sasha’s experience is the perspective of a young person finding it hard to find work out of school, there are other types of job seekers who are struggling in different ways.

Oliver is 23 and graduated with an International Studies degree seven months ago. He’s been working in a casual cinema job ever since as he tries to break-in to the highly competitive skilled labour market.

He finds himself treading water in unskilled part-time work, hoping he can scrape enough hours to get through the week.

Oliver’s situation is becoming more common for graduates due to a huge increase in the number of people going to university. What once was an exclusive pathway is now available for more and more people.

While being well-educated as a nation is certainly beneficial, in many professions and sectors, there are often many more graduates than there are jobs.

“The reason why it’s taking younger people longer to get skilled jobs is there’s a big increase in supply,” Professor Bob Gregory says.

“Many years ago, only five per cent of the population went to university, now it’s about 45%. In that sort of circumstance, it’s harder to get a skilled job.”

Even workers who have been in the workforce for a while in skilled positions may be feeling the impact of this economic shift sooner rather than later.

Professor Gregory says: “As the rate of growth is slowing down, people who’ve been working full-time are finding that maybe there’s less work in a given week, leading to their average hours at work dropping.”

The ABS reported that in May, monthly hours worked in all jobs decreased by 5.9 million to 1,775 million hours.

It’s not because there are fewer positions in the workforce – as job numbers held steady – but while people are being employed, there is a rising rate of underemployment because an increasing number of jobs part-time or casual.

The growing number of underemployed is starting to concern economists, particularly in the context of the short-to-medium term of the Australian economy.

“If we end up getting another recession any time soon, more people are going to be looking at this underemployment thing as it may be something that is now relevant to them,” Professor Gregory warns.

Recently, the Reserve Bank of Australia cut interest rates to a record low of 0.75 per cent, to try to combat slow wage growth and reduce unemployment.

Added to this is recent ABS data which shows we’ve hit a point where our retail sales volume is the worst it has been since our last recession.

All these indicators are piling up but lost in all the warning signs are those who are trying to survive in this new world of scrambling to find enough work hours to survive like Sasha.

“It worries me a bit, because I just can’t see a way out of this for myself. I just have to keep trying to find more work and hope I’m successful.”

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