How the unemployed ‘disappear’ and why it matters

Discouraged jobseekers are becoming invisible in official estimates. AAP/Julian Smith

With monthly unemployment figures due out this week, the usual attention will be paid to fluctuations up and down. In last year’s Mid Year Economic and Fiscal Outlook Treasurer Joe Hockey predicted that unemployment could reach 6.5%, which is 0.25% higher than was predicted in the federal budget.

How the unemployment figure is actually calculated became a hot media topic when the Australian Bureau of Statistics was forced to substantially revise its seasonally adjusted labour force figures for July and August. The ABS cited difficulty with seasonally adjusting the unemployment figure, which meant only the raw figure was used. These difficulties were attributed to a variety of factors and are now considered to be resolved.

However these conversations gloss over how the official figure of unemployment underestimates the “real” figure of unemployment. For those of us who are interested in how unemployment contributes to the way we experience ourselves in the world, who is excluded from these figures is just as important as who is included.

The discouraged

So who is missing from this key data set that we have been hearing a lot about recently? To answer this we need to look at definition of “unemployment” more closely.

The International Labour Organisation states a person is unemployed if they have worked less than one hour, have been actively looking for work during the reference week, and could start a job in the week following. Recently, the ABS updated the Labour Force Survey to align “active steps” of job seeking with the ILO definition. Now a person is considered to be actively looking for work if they, at bare minimum, call an employer to ask about a job position as opposed to reading through a job notice board or applying for Centrelink payments.

Here we can see that a person who has given up on the job search, or feels so disheartened by the process that they looked at jobs on a notice board but did not make contact with any employer, are not considered to be unemployed and therefore are missing from unemployment figures.

Economists refer to this cohort of unemployed as the “discouraged”. We consider this term to be a euphemism because when we turn to psychological and sociological studies that examine the experience of unemployment we find paper after paper that discusses the detrimental psychological impact that unemployment has on a person. Such research documents this distress in terms of anxiety, stress, depression, suicide and lower self-esteem - that is, many people can be said to be excluded from the unemployed count because of the psychological impact of unemployment upon them.

The ‘active subject’

What do we do about unemployment, then, if it is so devastating to people’s well-being? “Activation” is one solution favoured by current government figures for the “problem of unemployment” in Australia and has been for some time now.

Activation is not just about active job seeking or actively improving one’s skill base (increasing skills via training etc), it is also about actively working on oneself to improve one’s “job readiness” in terms of self-esteem, resilience and motivation. From this perspective any programs to improve psychological factors like “self-esteem” are to be encouraged.

The problem of the unemployed is (not) the unemployed

The problem with these programs of reformation is that they only contribute to constructing the problem of unemployment as the problem of the unemployed individual themselves, running the risk of becoming a form of victim-blaming which pathologises the unemployed and makes political discussions around the structure of employment, unemployment and the labour market even less likely.

In discussions about unemployment and welfare programs it is rarely mentioned that mass unemployment is required by our socio-political regime, a contemporary form of neoliberal capitalism. The Non-Accelerating Inflation Rate of Unemployment is a term used by economists and politicians to refer to the level of unemployment, between 4% and 6%, considered necessary to prevent inflation taking off.

We need to also consider that there just aren’t enough jobs to go around. Figures in August 2014, for example, showed there were approximately 147,200 job vacancies though unemployment totalled 735,500 people. Clearly unemployment can not be “solved” by unemployed people taking non-existent jobs and it is unreasonable to blame unemployed individuals for unemployment when there is no paid work.

If our politico-economic system needs unemployment, the active labour market vitriol poured upon the unemployed is unjust as well as ineffective.