Australia’s unemployment rate sits at a comfortable 4.3% - but that number hides a far bigger problem. Over 1.4 million Australians have jobs, yet desperately need more work. They are the hidden workforce: employed on paper, struggling in reality.

Chart 1: Two rates, one hidden crisis

Unemployment captures those with no job. But underemployment - people working fewer hours than they need - has consistently run at nearly double the unemployment rate for over two decades.

Source: ABS Labour Force, Australia, April 2026 (cat. no. 6202.0)

Chart 2: Young Australians and women bear the burden

Underemployment is not spread evenly. Young workers aged 15–24 face rates nearly three times the national average, and women consistently experience higher underemployment than men across every age group.

Source: ABS Labour Force, Australia, Detailed, March 2026 (cat. no. 6291.0.55.001)

Chart 3: Hospitality and arts workers most exposed

The type of work matters enormously. Industries dominated by casual and part-time contracts - accommodation, food services, arts and retail - leave workers most vulnerable to underemployment.

Source: ABS Labour Force, Australia, Detailed, March 2026 (cat. no. 6291.0.55.001)

Chart 4: The hours gap - so close, yet so far

Underemployed Australians are not asking for much. On average, they work around 20 hours per week but want closer to 34 - a gap of roughly 14 hours, nearly two full working days every week of missed income.

Source: ABS Labour Force, Australia, Detailed, March 2026 (cat. no. 6291.0.55.001)

Chart 5: Where in Australia is it worst?

Tasmania and South Australia record the highest underemployment rates - states with smaller economies, fewer full-time opportunities, and higher dependence on seasonal and casual work.

Source: ABS Labour Force, Australia, April 2026 (cat. no. 6202.0)

The hidden workforce deserves to be seen. Underemployment is not a footnote - it is a structural feature of the Australian labour market that affects over a million people, costs billions in lost wages, and goes largely unaddressed by policy. Measuring it better, as the ABS has begun to do with its new u-series, is only the first step.

References

Australian Bureau of Statistics. (2026). Labour Force, Australia, April 2026 (cat. no. 6202.0). https://www.abs.gov.au/statistics/labour/employment-and-unemployment/labour-force-australia/latest-release

Australian Bureau of Statistics. (2026). Labour Force, Australia, Detailed, March 2026 (cat. no. 6291.0.55.001). https://www.abs.gov.au/statistics/labour/employment-and-unemployment/labour-force-australia-detailed/latest-release

Australian Bureau of Statistics. (2026). Underemployment and underutilisation ‘u-series’, March 2026. https://www.abs.gov.au/articles/underemployment-and-underutilisation-u-series-march-2026