Long-term unemployment is falling rapidly, and it’s changing lives

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The labour market hasn’t been this tight in decades.

It’s helped long-term unemployment fall to its lowest level since 2013.

Below are some charts to illustrate what that means, and we’ll meet a young man who has recently found employment after a decade of searching.

It’s a good news story.

What is long-term unemployment?

According to the Bureau of Statistics, “long-term unemployment” refers to a situation in which someone has been unemployed for 52 weeks or longer.

Try to think about what that means.

A year is a really long time to be looking for work and to face constant rejection.

Even a few months of fruitless job searching can be soul destroying. If you’ve experienced unemployment, you’ll know how easy it can be to lose confidence and retreat into yourself, and to lose contact with your human networks.

It can eat away at your identity very quickly.

So to be unemployed for a year? Or two years or more? You deserve admiration for enduring it.

That’s why it’s been so encouraging to see long-term unemployment decline so quickly in the past year.

See below.

In October last year, when the national unemployment rate was still 5.2 per cent, there were 183,400 people in long-term unemployment.

But the unemployment rate is now 3.4 per cent, a level last seen in the early 1970s, and the number of people in long-term unemployment has dropped by 55,500.

There are now 127,900 people in long-term unemployment, which is the lowest it’s been since early 2013.

It’s great news.

There are 47,200 fewer people in long-term unemployment today than there were at the start of the pandemic in February 2020.

It’s one of the clear benefits of having such a tight labour market.

The different durations of long-term unemployment

But let’s break those figures down a little.

The next graph shows you how many people have been unemployed for between one and two years, and for two years or more.

Notice how, as the labour market has tightened, the number of people who have been unemployed for one to two years (the blue line) has declined more quickly than the number of people who have been unemployed for two years or more (the red line)?

That’s not an unusual phenomenon. 

But what will it take to get those lines down to the levels they hit in 2007-08?

If you think about it, that period in 2007-08 was just before the global financial crisis.

At that time, Australia’s national unemployment rate was hovering around 4 per cent, and nominal wages were beginning to grow at an annual pace of 4.3 per cent.

But today, the national unemployment rate is much lower, at 3.4 per cent, and nominal wages are still growing at a much slower pace, at 2.6 per cent.

Shouldn’t long-term unemployment be lower by now, given how tight the labour market is?

Well, have a look at the next graph.

The long-term unemployment ratio

This is the long-term unemployment ratio.

It shows the number of long-term unemployed people as a proportion of all unemployed people.

In June this year, 25.9 per cent of all unemployed people were long-term unemployed.

How does that compare to the pre-pandemic period?

Well, in February 2020, the long-term unemployment ratio was 24.6 per cent, so it’s higher today than it was before the pandemic.

See below. 

And that seems to make sense, in a way.

With unemployment falling to a 50-year low, you could understand why, as the pool of unemployed people continues to shrink, a larger proportion of the unemployed people who remain might be long-term unemployed.

But that’s not what happened in 2007-2008.

Back then, the long-term unemployment ratio shrank as the labour market tightened.

It got as low as 12.2 per cent.

When the unemployment rate was declining back then, and the long-term unemployment rate was declining (see the graph below), the long-term unemployment ratio was also declining.

It’s a notable difference between now and then.

Employment can change lives

Anyway, the decline in long-term unemployment over the last year has been good news.

It’s making a real difference in peoples’ lives.

Last week, I spoke to a 27-year-old man from northern Tasmania, Sean Wendes, about his experience in the labour market where he lives.

Mr Wendes found a job in June, after 10 years of unemployment, and he was extremely happy about it.

“My mum couldn’t stop crying,” he said.

“They couldn’t believe it was real. They’d say, ‘Do you have it in writing? Nothing’s been confirmed. Do you have a contract?” And I was like ‘No, this is actually going to happen”.”

“It’s one of my very happy memories,” he said.

Sean Wendes
Sean Wendes got a job in June and was quickly made a full-time member of staff.(Source: ABC News)

Mr Wendes was hired as a casual by Temtrol Technologies, in George Town, and was quickly made full-time.

The company had been put in contact with Mr Wendes by the Northern Employment and Business Hub, which works like a labour exchange for northern Tasmania.

It’s a fairly new initiative, funded by the Tasmanian Government.

If you’re looking for an employee in the region, you can contact the NEBHub and tell them what type of job you have going. If you’re looking for work, you can tell NEBHub that you’d like a job.

The organisation offers very personalised support for job seekers, helping them to get the skills they’ll need to do the jobs that are available in the region.

And the initiative is expanding.

Its headquarters have recently shifted from George Town to Launceston so it can expand its services across the Meander Valley, West Tamar,  Northern Midlands Local Government Areas, and Flinders Island.

Mr Wendes said he wasn’t expecting to get a job from the program, because he’d become so used to “failure.”

But things have turned around quickly (he’s featured in the story below). 

“I’ve found what people have been telling me, that I am good enough and I have worth and I can actually give to a company,” he told the ABC.

“I have skills and value as an individual, so it’s just been very uplifting knowing that I can actually contribute to the company and make a difference for the better.”

And, as these things happen, the fact that Mr Wendes is now employed will be making him more employable.

He said he’s learning how the business works, he’s making contacts with other businesses and workers in the area, and he’s gaining new skills all the time.

“It’s a lot of fun, actually,” he said.

Now, Mr Wendes’ situation is unique, because it shows two things: how life changing it is to finally find a job, and what a difference a proper labour exchange can make for a local community.

But imagine what’s happening across Australia as long-term unemployment has been declining over the last 12 months, with so many lives being changed for the better.

It’s a positive development for everyone.



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Our target is to take our local communities to the worldwide audience. Submit your story and we will help you to build your audience. Thank you Roots News Team

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