What You Need to Know About Underemployment in Australia

There is much talk in Australia about the unemployment rate, and its constant ups and downs. However, little attention is given to the related issue of underemployment.

Here’s everything you need to know about underemployment in the labour market and solutions for those feeling undervalued in their roles today.

The Australian Bureau of Statistics defines an underemployed individual as someone over the age of 15 “who desires, and is available for, additional working hours”.

Once an individual is working over 35 hours a week, they are considered fully employed even if these hours are split over multiple jobs. It is worth noting that people who aren’t looking for work, such as retirees or stay-at-home parents, aren’t included in underemployment statistics.

Earlier this year, headlines celebrated the fact that Australia’s official unemployment rate had fallen to a four-year low of 5.5%. This sudden rise in full-time employment was seen as a sign that the labour market and economy, in general, were improving, but unfortunately, these statistics do not tell the full story.

For example, one catch behind these statistics is that in order to be counted in official employment figures, an individual only needs to be in paid work for as little as an hour a week. They may very well be underemployed and therefore struggling to make ends meet.

Unfortunately, underemployment seems to be on an upward trend.

This equates to a total of 1 million underemployed Australians who are either part-time workers struggling to find appropriate
full-time jobs, or part-time/casual workers who wish to work additional hours.

Women and young people are greatly overrepresented in these statistics, with the rate of underemployment for women of working age being above 10%. Meanwhile, the underemployment rate for 15–24 year-olds was 14.8% in 2013, compared to the overall rate of 7.8%.

Of course, many people choose to work fewer hours in a part-time role or control their own hours of work by working freelance, but this satisfied segment of the workforce is not included in the underemployment rate.

In fact, research by Murdoch University has found that underemployment workers are more likely to exhibit lower job satisfaction, poorer mental and physical health, higher job turnover, and of course, persistently lower income than full-time workers.

According to the ABS, this points to the spare capacity in the labour market and the economic benefit that an increased participation rate would provide to the nation.

Experts attribute these worrying trends to a number of factors. According to the Centre for Social Impact, the Australian economy has seen unprecedented growth over several decades. At the same time, a third of the working-age people in poverty are employed, indicating that wage growth is simply not keeping up with the rising cost of living.

The gig economy is also a contributing factor, resulting in increased part-time employment and the casualisation of the labour force. Employers are now more likely to keep casual workers on hand instead of full-time and part-time workers who need to be paid benefits. This leaves more Australians in uncertain employment situations.

While full-time employment isn’t and shouldn’t have to be the end goal for everyone, there are still measures that can be put in place to make casual and part-time work more stable and equitable.

On an individual level, younger workers might find that they are underemployed due to lacking the right experience, while older workers may be overqualified, face discrimination, or not have their qualifications recognised.

f you are one of the many underemployed people who feel they are working beneath their potential, there are measures you can adopt to change your situation. Researching the demands of your job title and developing the appropriate skill set can make you more desirable to potential employers.

Depending on your situation, it could be worth entering negotiations with your boss to discuss the number of hours you are allocated or your hourly rate.

If this conversation turns out to be futile, you might want to start looking for new work. Could a different career path make better use of your skills and education? Is there perhaps a hobby or side hustle you do in addition to your main job that you could turn into full employment? Or should you simply be looking for a similar position at a different company?

Underemployment is a critical issue that needs to be addressed on a governmental level. However, these structural changes will take time, meaning individuals may still have to take initiative to improve their employment situation.

This might be in the form of negotiations at work, up-skilling, or even a career change altogether.