Australian workers on average are working fewer hours than ever before as the shift from full-time to part-time work continues and, with it, the rise in underemployment.

In March, Australian workers averaged a mere 34 hours and 40 minutes of work each week. This was just above the record low of 34 hours and 38 minutes set in June last year but is well down on the 35 hours and 14 minutes worked just five years ago:

The drop in the average hours worked is a reflection of the changing nature of employment in Australia. Where once full-time was the norm, in March a record 17% of all hours worked was done by part-time employees:

Nearly a third of all people employed now work part-time – a trend that has been growing ever since the 1980s.

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Mostly the declining average hours worked since the 1990s is due to women entering the workforce in greater numbers than before and women (as I have previously noted) are much more likely to work part-time. But more men also work part-time now than before and, crucially, both men and women who work full-time are working fewer hours than the recent past.

To be classed as a full-time worker by the ABS you need to usually work more than 35 hours a week (this may be in more than one job, which is why the monthly employment data does not perfectly match the number of jobs). Before the GFC hit, male full-time employees worked on average 44.5 hours a week. Female full-time employees on average work less than men but they too were working slightly more than they do now:

The decline in hours worked has mostly come from a reduction in the percentage of full-time workers working very long hours and an increase in the amount working less than 40 hours a week.

In 2006, 10% of full-time workers worked more than 60 hours a week; now it is 9%. There are similar drop-offs in the number of workers working 44-49 hours and 50-59 hours a week.

But the past decade has seen a rise in the level of full-time workers working under 40 hours from 30% to 34%:

Now this does not necessarily mean there has been a rise in the percentage of full-time workers who consider themselves underemployed – overwhelmingly under-employed workers are those who are part-time. But an interesting thing about part-time workers is that they are now working more hours on average than in the past:

The biggest shift has been the drop in the proportion of part-time employees working less than 20 hours a week:

This is reflective I suspect of the shift from part-time work being viewed as a bit of a gap-filler role to one that is expected to be more crucial to the operations of the business (though not necessarily meaning a more permanent role).

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The data does put paid to the common complaint about the unemployment figures that, because people who work just one hour a week are counted as employed, the figures exaggerate the amount of real work.

The argument has always been a bit silly – you have to count work from some point – one hour of work is an internationally standard point, so it makes sense to use it. But the data also shows that the proportion of employees working less than 10 hours a week has fallen over the past decade – and has never been a large number of workers:

We could include those working under 10 hours as “unemployed” but all that would do is increase the unemployment rate for no other reason than because we have decided anything less than 10 hours is not real work.

That might make us worry more about the problem but my suspicion is it would mean we would just think of average unemployment as being 10%-11% rather than 5%-6%:

It is worth noting that while the percentage of people working less than 10 hours has fallen, the level of underemployment has risen.

And, given the real concern is actual people being employed, it would only make sense to use a different measure if the current one was hiding something. But a comparison of the annual growth of all employment and employment excluding work of less than 10 hours a week shows almost no difference:

Underemployment is a big issue but it is not being driven by more people working very small numbers of hours. The data suggests the bigger issue is that work that once was done by full-time employees is now being taken on by those who work part-time. This has seen the proportion of workers employed full-time fall, while also causing a rise in the hours worked by part-time workers.

But with underemployment at record highs, it is clear what many part-time workers really want is not just a few more hours work but full-time employment.