Coronavirus: Unexpected drop in unemployment rate

Definitely excludes those working for cash and there be alotta them

 

There was an article a few days ago pointing out that even though unemployment has dropped, the total number of hours worked hasn’t increased...

 

I wish I were that good! Sadly my ability to predict the future is rather lacking

 

Can someone explain to me the logic behind not counting people who have simply given up trying to look for jobs? I'm sure there's a rational explanation behind it, I just don't know what it is.

 

Yeah I was also wondering how they know how many are unemployed and not receiving Centrelink. But I guess if anyone can work it out the ABS can.

 

If they are not looking then it means there is less supply of workers in the economy. This is important, and the actual supply needs to be measured, because employers will need to compete for workers from the reduced supply.

This should push up wages, but it doesn’t, because we don’t really have a free market when it comes to the labour force (because of jobkeeper, and in addition to there being not as much demand for labour given the obvious shutdown of sections of the economy)

I’ll leave smarter heads to comment as to the consequences on inflation, employer groups complaining of having to pay high wages, governments paying too much for people on the dole, share of income going to workers vs capital, and the social problems of people giving up entirely. It’s complex.