The latest release of Australia's Labour Force data reveals 42,400 fewer Victorians were employed in August compared to July.
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According to the Australian Bureau of Statistics, the national unemployment rate decreased from 7.5 per cent to 6.8 per cent, with Victoria boasting an unemployment rate of 7.1 per cent.
Bendigo MP Lisa Chesters said she expects unemployment figures to get worse before they get better.
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"These figures justify why the federal government needs a plan on how they are going to create jobs for people looking for meaningful work opportunities," Ms Chesters said.
ABS head of labour statistics Bjorn Jarvis said employment figures are now 3.3 per cent below March.
"The data also showed that hours worked rose by 0.5 per cent, following a 0.1 per cent decrease in August," Mr Jarvis said.
"However, hours worked were 5.1 per cent below March.
"With participation relatively unchanged, the increase in employment and decrease in unemployment saw the unemployment rate decrease 0.7 percentage points to 6.8 per cent."
Victoria boasts an underemployment rate of 13.8 per cent, the highest in the nation.
"A trend of underemployment is alarming," Ms Chesters said.
"It demonstrates there is a potential within workforces to be doing more, but the hours aren't there.
"These businesses should receive extra support to see if they can get going again and move workers back to full-time hours."
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Senator for Victoria Sarah Henderson said recent employment figures show the impact of Victoria's lockdown.
"Over the past two months, while 172,000 new jobs were created across the rest of the country, in Victoria, 73,000 jobs were lost," Senator Henderson said.
'Victoria's effective unemployment rate is 14 per cent compared with 7.7 per cent in NSW and a national average of 9.4 per cent.
Senator Henderson said Bendigo businesses rely on Melbourne's economy, which is suffering amid restrictions.
"With Victoria well below the Commonwealth threshold of 10 new cases a day, it's time the Premier gave Victorians the freedom to work and see their family," Senator Henderson said.
The response of the state government has been prudent, Ms Chesters said.
"The state is working to the health advice available to them," Ms Chesters said.
"They have offered a lot of support for businesses and filled the gaps where the federal government has not supported workers, including casuals and people on temporary visa arrangements or international students."