“The latest Roy Morgan employment estimates for February show total Australian unemployment or under-employment increasing for a third straight month, up 29,000 to 3,462,000 (21.7% of the workforce, up 0.3%). This is the highest rate of overall unemployment and under-employment for over four years since January 2021 (21.7% of the workforce) during the COVID-19 pandemic.
“The increase was driven by a substantial rise in unemployment, which jumped 214,000 to 1,834,000, while under-employment fell by almost as much, down 186,000 to 1,628,000. This is the highest number of unemployed for four years since February 2021.
“The rise in unemployment is directly linked to falling employment, with both full-time employment, down 273,000, and part-time employment, down 99,000, falling in February. In the pre-pandemic period of 2007-19 this was a regular occurrence with employment falling in 11/13 years. However, this trend was disrupted during the pandemic, and the record population growth of the last few years.
“Since the last Federal Election in May 2022 the population and workforce have both increased by over 1.5 million and well over 800,000 jobs have been created in under three years. The soaring population has meant record strong employment growth over the last two years and has been far faster than the long-term average population growth of under 300,000 per year so far this century.
“As well as the disruptions caused by the pandemic and the subsequent population growth, a ‘cost of living crisis’, as inflation and interest rates hit multi-decade highs, has forced many people to seek employment, or stay in the labour force longer than expected to make ends meet.
“In January 2020 the workforce engagement (% of the population that are in the workforce) was around 67%, while today that has increased to around 70% – an increase of 3% points. As more people join, and those already in employment remain, in the workforce, the demand for employment will obviously increase rapidly, especially in a country featuring high population growth of people of working ago.
“As inflation has now returned to the Reserve Bank’s target range of 2-3% over the course of the cycle the pressures on many Australians to remain in the workforce longer to ‘make ends meet’ are set to lessen and this could lead to more people being willing to leave the workforce earlier than planned.
“This reduction in inflationary pressures, as well as slowing population growth compared to recent years, should contribute to more normal employment patterns reasserting themselves throughout the economy during the remainder of 2025 and into next year.
“Looking back since the last Federal Election the rapidly increasing Australian population and workforce has led to a persistently high level of labour under-utilisation. Since July 2022 total unemployed and under-employed has been permanently above 2.5 million, and since March 2023 total labour under-utilisation has been stuck above 2.6 million and averaged nearly 3 million over the last two years.
“These figures show that as Prime Minister Anthony Albanese gets set to call a federal election in the next few weeks for mid-May, the Federal Government needs to provide greater policy clarity on how it will tackle the issues surrounding ‘cost of living’ as well as implementing policies to deal with the persistently high levels of unemployment and under-employment throughout the country.”
