Full Employment

The are several problems associated with the measure of unemployment as it exists in Australia today.

The sample size is very small. Given the size of the population in Australia, and the vast geographic area over which it is spread, errors are very likely during the sampling process.
The definitions of an “employed person” and an “unemployed person” are very specific. However, responses to surveys are often relatively vague. As a result, the line between the two can sometimes be blurred. Further, the definitions are somewhat arbitrary – when a person works for one hour a week they are considered “employed”. Therefore, a person who works for 50 minutes is unemployed, while a person who works for one hour and 10 minutes is employed. This arbitrary label can obviously have an impact on the final figure that is recorded by the ABS.
Sometimes the number of hidden unemployed can actually be higher than the officially unemployed. At times like this (for example, during the recession) the unemployment rate can be understated. Part of the reason that the unemployment rate peaks just after a recession, rather than during it, is due to the fact that once a downturn is over, many people re-enter the workforce and commence looking for work. At that time, they will also appear as unemployed.
When responding to a survey about employment, it is possible that some people will provide misleading answers. This is because they may fear losing benefits if they respond by saying that they have completed some work during the period.