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Summary and Evaluation of the Article “Underemployment in the Australian Labour Market” by Chambers et al., 2021


Chambers et al., 2021, examine Australian underemployment, and they offer recommendations on how to increase employment in Australia. When there is a surplus of labor, employed people prefer to work longer hours, which drives up the number of people employed part-time. Labour markets have been adjusting to changes in demand over the past few decades, according to Chambers et al. (2021). The underemployment rate has increased significantly because of structural and cyclical variables, such as an increase in the share of part-time work in the labor force.

However, despite Australia’s lower jobless rate and the Covid-19 lockdowns, Chambers et al. (2021) claim that the unemployment rate is still rising as a result. Although Australia was facing underemployment at the time, the Australian Bureau of Statistics issued data showing that the country’s economy added 29,100 jobs in June (Chambers et al., 2021, p.88). In June, a two-week lockdown in Victoria and the broader Sydney area threatened the economic stability of the entire country. Working hours and overtime are good indicators of how lockdowns have influenced the labor market. However, the unemployment rate has decreased dramatically since the epidemic’s beginning.

With a large number of unemployed Australians and a cloud of doubt hanging over the Covid-19, the labor market in Australia is struggling to recover from the epidemic. To support their families and maintain their standard of living, many Australians are looking for a job or extra hours at work (Chambers et al., 2021, p.89-90). Employment in the general population has decreased significantly, including full- and part-time positions. The underemployment rate has increased from 9.3 percent in August 2021 to 9.3 percent since March 2020 (Chambers et al., 2021, p.90).


A key distinction between underemployment and the general state of unemployed people is that they may be temporarily employed but are still considered employees because of their connection to the business (Labour Force, Australia, 2021, n.p). In contrast to unemployment, underemployment is a source of additional hours in the labor market. Since underemployment might provide additional hours of labor supply, it could serve as a counterbalance to high unemployment rates. Chambers et al. (2021) claim that the effects of underemployment are on par with those of unemployment. As a result of these scenarios, families that don’t receive enough money end up poor. Negatively affects both company growth and customer satisfaction. Australia’s GDP has decreased due to the country’s high percentage of underemployment. As a result of lockdowns in response to lockdowns, employees in places with significant unemployment have lost their jobs, such as Victoria.

According to the Bureau of Labor Statistics, job market slowdowns raise the likelihood of underemployment in the United States. There has been a large rise in the possibility of moving from full-time jobs to part-time work since the 1990s (Anjaneyulu, 2021, n.p). Because of the number of hours worked, there has been a cyclical movement of underemployed persons into and out of the workforce. Underemployment has been rising steadily throughout the 1990s, as each person’s working hours are cut because of the recession (Chamber et al., 2021, p.92). When those currently unemployed are willing to work longer hours, this opens the door to an increase in labor supply without increasing employment. There is no need for corporations to raise wages to recruit more workers when people are prepared to work longer hours to choose pay levels (Karp, 2021, n.p). Pay growth is better predicted by underemployment than by the unemployment rate, with underemployment being linked to slower wage growth than the unemployment rate. Some underemployed workers may be more interested in gaining more flexibility and extending the number of working hours rather than fighting overpay.

In conclusion, Australia’s unemployment rate has risen since the 1990s, which may be due to an increase in part-time work and changes in job structure. A critical distinction between underemployment and unemployment is that businesses might turn to underemployment as a source of additional labor supply in times of high unemployment. Australia’s increasing levels of underemployment serve as a reminder of the excess capacity that businesses may be able to absorb before wages rise.


Anjaneyulu (2021). Underemployment.

Chambers, M., Chapman, B. and Rogerson, E. (2021) ‘Underemployment in the Australian Labour Market’, Reserve Bank of Australia Bulletin (June Quarter), pp. 86-94.

Karp, P, (2021). Australia’s unemployment rate falls to 4.9%, but underemployment up as lockdowns take a toll. Retrieved 8 October 2021, from

Labour Force, Australia, August 2021. (2021). Retrieved 8 October 2021, from


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