Labor Economics and Public Policy

This assignment delves into various facets of labor economics and its implications for public policy. It requires students to critically examine the psychological effects of unemployment, explore the relationship between trade liberalization and job markets in India, and assess Australia's economic growth trajectory amidst environmental concerns. The analysis draws upon theories of economic growth, balance-of-payments constraints, and the impact of unemployment on mental health and suicide rates.

Running head: UNEMPLOYMENT IN AUSTRALIA 2012-2017
UNEMPLOYMENT IN AUSTRALIA 2012-2017
Name of Student:
Name of University:
Author Note:

UNEMPLOYMENT IN AUSTRALIA 2012-2017
TABLE OF CONTENT
Introduction...................................................................................................................... 2
Current Economic Overview of Australia:.........................................................................3
Unemployment as Economic Issue:.................................................................................4
Unemployment in 2012-13........................................................................................... 8
Unemployment in 2013-14........................................................................................... 9
Unemployment in 2014-15......................................................................................... 10
Unemployment in 2015-16......................................................................................... 10
Unemployment in 2016-17......................................................................................... 11
Policies undertaken to combat unemployment...............................................................11
Conclusion..................................................................................................................... 13
Reference

UNEMPLOYMENT IN AUSTRALIA 2012-2017
Introduction
In the modern economy Gross Domestic product of nations are one of the important
economic indicators to get a snapshot about the economic performance and ranking of them
globally. GDP in turn reflects how much employment is contributing behind that What it fails to
capture is the how many people still remaining idle and unproductive in the participation of
national activities and such is identified as unemployment .In simple term unemployment, means
the state of being without any job and be unable to earn livelihood through working (Argy &
Nevile, 2016). The unemployment faced by a nation reflect the underemployed human resources
which if applied could bring forth more growth to the nation It is one of the macroeconomic
factor that indicates and determine as well the overall economic operation (Shimer, 2012). More
unemployment leads to less income of the nation and less consumption that influences the GDP
of the nation. Excessive and increasing unemployment has detrimental impact on the health of
economy and that is why it is considered as one of the economic issues that almost every nation
face though the rate intensity and degree differ remarkably.
Economy of Australia though small but enriched with plenty of potential to grow and
expand. The biggest mixed market, which the country is consist of at least indicates that
strongly. Even though the nation ranks 14th as per nominal GDP, Ii is diagnosed too with the
common ailment of unemployment that is recorded to be at the rate of 5.6% of total labor force
recently in recent year(2017).

UNEMPLOYMENT IN AUSTRALIA 2012-2017
The paper aims to report the unemployment issues faced by Australia over the last five
year period that is 2012-2017. It sheds light on the facts and challenges posed by unemployment
with further discussion of national policies and attempt to deal with the chronic problem.
Current Economic Overview of Australia:
Australia is 14th largest global economy as per the nominal GDP estimation and ranks
20th in terms of Purchasing Power Parity. As per the estimated data of International Monetary
Fund, the nominal GDP of the nation is recorded to be $1.258 trillion in 2016. The national GDP
grows at 1.8% annually. The country reflects pretty higher per capita income, which is recorded
to be $51,850. The nation is top in world economies as per the wealth per adult and the annual
growth rate of wealth is 4.4% due to constancy of exchange rate. The Human Development
Index of the country is second highest in world.
Looking at the sectors wise performance of GDP, the service sector seems to dominate the total
production of the country accounting for almost 61% of the GDP. The major components of
service sectors are education, tourism, consultancies and financial services They consist the
maximum of the export basket mostly forwarding the good into China, Japan, South Korea, US
and India. The country has been revolving around 5-6% recently after facing rise in post
financial crisis reaching a peak of 6.25%. Construction is the next bigger component
contributing to 8% of GDP. Mining is also crucial in the economy as it accounts for almost 7%
of GDP. 6% of the total national production comes from the manufacturing sector. Only 2% of

UNEMPLOYMENT IN AUSTRALIA 2012-2017
the total production is achieved through operations and productions in agricultural sector. .
Natural resource along with agricultural production holds 2-5% of the total GDP.
The country captures inflation rate recorded at 1.9%. Australia is one of the larger
exporting countries to the world facing higher export demands from China, Japan, South Korea,
European Union and United States of America. This makes the country produce more of
exportable good and services as compared to manufacturing production. As a result, the country
has been blessed with increasing terms of trade over time since 2000. The existing labor force of
the nation is 12.6 million, of which 79.2% is employed in service sector, 8.8% in construction
sector, 2.7% in agriculture sector, 7.4% contributing in the manufacturing sector and 1.9%
employed in mining sector. Keeping parity with the employment the wages in the country has
not raised rather has been falling over time. As per the estimation in 2017, the recent
unemployment rate is recorded at 5.6%. The general price level in the national economy is
moderate as it has been managing the inflation rate to prevail within 2-3% of the GDP.
Unemployment as Economic Issue:
Over the years there has been larger structural changes in Australia in terms of its quantum and
process of production. The changes owe its credit to the technological advancements, compact
integration with the huge world market and the competition stemming from manufacturing
production and growing services produced by low wage developing countries. Changes in the
tastes and preferences of consumers due to rise in real income is also one of the driving factor
behind Australian changes in outlook (Pissarides, 2013). The adoption of technology and

UNEMPLOYMENT IN AUSTRALIA 2012-2017
changes in way of production has come at the cost of declining job opportunities for male in the
labor force. The country provides education at much higher cost and this inflicts into lesser
number of people in the workforce with formal education. Compared to male employment, the
female employment has been rising (Keynes, 2016). It has been found that there has not be
balanced reduction in unemployment as compared to the economic growth that the nation
captures. Also the wage rates did not rise much. The unemployment of Australia has been a long
term problem for over past 30 years and following discussion shows the trends captured in past
5years
Year Unemployment (%
of total labor force)
2012 5.22
2013 5.66
2014 6.07
2015 6.06
2016 5.72

UNEMPLOYMENT IN AUSTRALIA 2012-2017
2012 2013 2014 2015 2016
4.6
4.8
5
5.2
5.4
5.6
5.8
6
6.2
Unemployment (% of total labor force)
Unemployment (% of total
labor force)
Figure 1: Unemployment Rate
The Australian economy received major shock in its economic performance in the post Great
Financial Crisis that impacted the country severely. The reason behind this has been the strong
linkage that Australia has with world countries through transaction of export and import
(McNamara 2013). To combat the recessionary pressure, the government resorts to expansionary
fiscal policies to enhance the GDP which further created employment too. In this analysis the
trend of unemployment from 2102 to 2016 has been capture. It can be seen that the rate of
unemployment tends to hover around 5.5 % in average but only in the years 2014 and 2015 the
rate has spiked a bit (Pigou, 2013). One of reason behind this can be government’s attempt to
reduce fiscal deficit through reduction in government expenditure that hurt the cause of
generating employment.

UNEMPLOYMENT IN AUSTRALIA 2012-2017
Year Unemployment
(% of male labor
force)
2011 4.55
2012 4.93
2013 5.37
2014 5.83
2015 6.09
The data reveals that the trend in male unemployment for the selected years has been following
smoothly increasing over time.
2011 2012 2013 2014 2015
0
1
2
3
4
5
6
7
Unemployment (% of male labor force)
Unemployment (% of male
labor force)
Figure 2: Male Unemployment Rate

UNEMPLOYMENT IN AUSTRALIA 2012-2017
Year Unemployment
(% of female
labor force)
2011 4.58
2012 4.79
2013 5.29
2014 5.38
2015 5.31
The trend of female unemployment also shows increasing pattern but situation started
changing from 2014 to 2015 where the rate has fallen by 0.7%.
2011 2012 2013 2014 2015
4
4.2
4.4
4.6
4.8
5
5.2
5.4
5.6
Unemployment (% of female labor force)
Unemployment (% of female
labor force)
Figure 3: Female Participation Rate

UNEMPLOYMENT IN AUSTRALIA 2012-2017
Unemployment in 2012-13
As per the report released by Australian Bureau of Statistics, the national rate of
unemployment seasonally adjusted was recorded steady at 5.2% in March of this financial year.
The report records the increase in the number of people reaching 11,491,200 from 44,000 in
March. The increase in employment captured the increase of full time employment which
increased by 15,800 people reaching a level 8,080,400. Part time employment reached
3,410,900. After recording an increase of 28,200 people being employed. Both male and female
increase in part time and full time employment has add up to the total increase in employment.
As per the report of ABS, the reduction in unemployment has been by 3200 people in March and
reached 629,100. Monthly aggregate of working hours records an increase of 9.5 million hours in
March. The estimated hours of work is now reached at 1,624.2 million hours. The labor force
participation rate has increased minimally by 0.2% and reached 65.4% in the report of 2012. The
estimates of the unemployment rate can be decomposed into two analyses. Seasonal and trend
analysis. The seasonal factors influencing unemployment are estimated on monthly basis and
reviewed on annual basis maintaining detail in order to take into account the original data of each
additional year. The conduction of review is done in February publication of each year. The
review does not always result into changes in the estimations made in published reports.
Unemployment in 2013-14
As per the report published by ABS, the rate of unemployment recorded a downfall only by
0.1% and reached 5.6% in September 2013. This estimate is the seasonally adjusted estimated
that takes into account the monthly data. The number of unemployed falls by 14,700 and reached
697,100 in seasonal term but in terms of trend, the estimation shows a rise of 300 persons

UNEMPLOYMENT IN AUSTRALIA 2012-2017
reaching 706,400 (Mavromaras, Sloane & Wei 2015). The recorded decrease in the monthly rate
is consistent with the reduction the rate of participation as well. Rate of participation decreases
by 0.1% and is attained at 64.9%. There has been an increase of 9100 persons in seasonally
adjusted number of employed person reaching 11,645,800 persons. In terms of trend estimation,
the employment fell only by 200 persons reaching a level of 11,646,800 persons in September
2013. The employment to population ratio is the number of total employed people as percentage
estimate of total civilians recorded at 61.2% as per seasonal adjustments. The trend estimate of
the same parameter shows 0.1% fall.
Unemployment in 2014-15
As per the ABS report published in September 2014, the rate of unemployment showed a
rise by 0.1% and reached a level of 6.1% after the estimation and adjustment is done seasonally.
The unemployed person adds up to the list by 11000 persons and reached a level of 746,600. In
terms of trend estimation, the rate differs a bit and records a steady rate at 6.0% in September
2014 (McCombie & Thirlwall, 2016). The increase in employed persons takes place by 5600
persons reaching a level of 11,604, 900 person. Compared to that, the hike in the number of
unemployed person has been recorded at 4,600 persons reaching 745,500 in terms of trend
estimation. As per the trend estimation, participation rate achieved 64.6% in September 2014 and
remained steady. The seasonal adjustment of the rate is 64.5% after showing a decrease of 0.2%
(Milner, Page & Lamontagne, 2014). The decrease of unemployment rate in September is due to
increase in part time employment. The seasonal estimation of employment to population ratio
recorded at 60.6% falling by 0.2% from the previous estimate (Hatfield-Dodds et al., 2015). The

UNEMPLOYMENT IN AUSTRALIA 2012-2017
trend estimation of the same recorded at 60.7%.
Unemployment in 2015-16
The seasonal estimation of the unemployment rate as published in the ABS report of 2015
recorded at 6.2% after a 0.1% decrease. The trend estimation reveals no change in the rate of
unemployment, which stays still at 6.2% as announced by ABS (Gould, 2013). The seasonally
adjusted rate of labor force participation is recorded at 65.0% showing a fall of 0.1% in August
2015. In terms o seasonal adjustment, the number of employed people increased by 17,400
reaching 11,775,800 in 2015 (Plumb, Kent & Bishop, 2013). The increase owes its importance
from both male and female full time employment as well remarkable growth in female part time
employment. The male employment in full time work increased by 10,100 almost. Seasonally
adjusted working hours decreased in August 2015 to 1,623.8 million hours falling by 0.6 million
hours. 14000person has been deducted from the number of unemployed persons reaching to
781,100 after seasonal adjustment.
Unemployment in 2016-17
As per the report released by ABS in August 2016, the monthly trend of the employment
in full time category increased by 22,000 persons. The increase in part time employment has
been by 6,000 persons leading to overall rose in employment by 27,000 persons. Since August
2015 and toward the end of 2016, the full time employment has increased by 253,000 persons.
Asper the statement of Chief Economist for ABS, employment as per trend estimation increased
by 2.6% that is way greater than the average year-on-year growth of 1.9%. The employment
growth rate overweighed the growth rate of population that has been 1.7% the trend

UNEMPLOYMENT IN AUSTRALIA 2012-2017
unemployment rate in Australia 2016 remained at 5.6% showing increase than last financial year.
The trend estimated monthly working hours has increased by 3.9 million hours showing a rise of
0.23% reaching1708.6 million hours in August 2016. The labor force participation rate reached
65.2% in the year.
Policies undertaken to combat unemployment:
Quite evidently, to lower unemployment rate the government has to boost the economic
performance of the nation. This is possible through adoption and successful execution of reform
policies. The reforms have to be designed incorporating diversification and broader outlook of
the entire economy. Regulation is in international trade, deregulated financial market, wider
ranged reforms in tax, labor polices to ensure flexible labor markets are mandatory (Hasan,
Mitra, Ranjan & Ahsan, 2012).. To combat the unemployment problem from root it is the prime
duty of the government to arrange for facilities that would be accessible to people for acquiring,
developing and enhancing the skill sets for job. Welfare arrangements should be made. Most
important policies that government takes help of is the robust fiscal and monetary policy.
Expansionary fiscal policies in terms of new projects initiated by the government creates new
source of employment. The autonomous government expenditure has to be high.
Reduction of unemployment in recent times through implementation of various policies require
addressing of the challenges faced by the national economy in medium term(Michau, 2013).
OECD conducts an extensive study based on cross-country data of factors that drives economic
growth, employment. Based on that it has designed a strategy to be followed by nations affected
with unemployment. The job strategy of OECD is responsive of the problem of growing high

UNEMPLOYMENT IN AUSTRALIA 2012-2017
rate of unemployment in almost every countries under it since 1970 (Milner, Page &
LaMontagne, 2013). The major focus of the plan has been to make working time and cost of
labor more flexible, reforming security provision in employment, deliverance of effective
program in labor market, improvisation of competencies and skills, reforming unemployment
system linking them with potential benefit systems making them interactive with tax system and
operations. This can be achieved by consolidating social and economic fundamentals, facilitation
of diffusing information , enhancing communication technology through innovation, investing in
human capital formation forming new firms.
Adoption of sustainable, non-inflationary and growth encouraging macroeconomic policies
by the Australian government has been remarkable to combat the rising unemployment in recent
times. Improving technological know-how after creating and diffusing it to broader level
(Groenewegen & McFarlane, 2014). Improving the climate of domestic economy to the foreign
investments by clearing impediments and restrictive regulations are also adopted. Labor cost and
wages are relaxed in order to let the wag reflect the conditions of local economy and skill sets.
The policies planned by OECD can be broadly categorized in three groups of policies:
Economic, Labor and welfare (Collins, 2013). The frameworks have been useful to assess the
Australian polices undertaken and detect their deviation from the core strategies as suggested by
it.
Conclusion
The report briefs up one of the important ailment of Australian economy prevailing in the
economy over the years. The report sheds light on the state of unemployment in the nation for
past five years. The Global financial Crisis in 2007 hit the Australian economy much bitterly that

UNEMPLOYMENT IN AUSTRALIA 2012-2017
compelled the national government take expansionary fiscal and monetary policies to deal with
the recessionary impact. Though the situation improved but the long run impact of the measures
was rising fiscal deficit that further pushed the government to cut back the expenditure. This
contractionary measure hugely affect the employment generation. As a result, the unemployment
in the last few years has been increasing even though very significantly. The very recent statistics
reveal improvement in the scenario where unemployment seems to decline stemming from the
operation of OECD strategies as adopted and implemented by the national government. Since the
country is dominant service provider in the national economy the majority of employment and its
scope or opportunity is lying in this sector and further employment can be boosted through
favorable fiscal policies and attractive atmosphere to the external as well as internal investors.
Moreover, the share of export of Australia to the world export is much higher hence expansion of
exportable production can create more employment both on full time and half time basis. The
labor force participation rate should be increasing over the population growth rate and the
estimation of 2016 rightly poses the success of the nation in achieving stability in the rate of
unemployment.

UNEMPLOYMENT IN AUSTRALIA 2012-2017
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