Real unemployment rate 16.8%, Roy Morgan says

With more than a million out of work in a matter of days, real unemployment has surged well beyond levels seen in the 1990s recession, finds a new survey.

People queue outside Southport Centrelink in Queensland this week. Roy Morgan reports unemployment levels doubled in just a matter of days during March. Picture Glenn Hampson

The jobless rate doubled in March leaving more Australians out of work than during the recession of the early 1990s, according to the first job market survey since governments introduced tough social distancing rules.

Research group Roy Morgan, which has a broader definition of unemployment than the ABS, estimated that the unemployment rate surged from 7.8 per cent in early March to 16.8 per cent by the end of the month.

“Unemployment more than doubled in a matter of days, up by a staggering 1.4 million to 2.4 million in the second half of March compared to the first,” said chief executive Michele Levine. “This is far more Australians looking for work than was the case during the last recession in 1990-91,” she said.

The official jobless rate fell to 5.1 per cent in February from 5.3 per cent in January, according the most recent ABS labour market survey, which implied just under 700,000 people were unemployed.

The ABS will release the figures for March on April 16.

“The COVID-19 coronavirus pandemic hit the Australian economy hard in mid-March when Australia’s federal, state and territory governments began introducing restrictive social distancing and self-isolation rules to stop the spread of the infectious virus,” Roy Morgan said in a statement.

Roy Morgan, which surveyed 6000 households in March, classifies a person as unemployed if he or she is looking for work, no matter when they can start. The ABS requires jobseekers to be ready to start work in the week of the survey, which means many people who wants jobs aren’t classified as unemployed.

“A record 3.92 million Australians are now looking for work or looking for more work – over a quarter of Australia’s 14.3 million strong workforce,” Ms Levine said.

Economists expect the official jobless rate to peak around 10 per cent in the second quarter of the year, a little lower than the peak during the recession of the early 1990s, when the rate reached 11.2 per cent in late 1992.

On Wednesday the government legislated a $130bn JobKeeper wage subsidy program that Treasury expects will benefit around 6 million workers over the next six months. “The wage subsidy has provided increased certainty for many Australians,” Ms Levine said.

The ABS monthly labour force survey is based on a sample of approximately 26,000 households per month.