Unemployment in Australia: Reasons, Measurement, Causes, and Solutions

This article discusses the reasons, measurement, causes, and solutions to unemployment in Australia. It covers changing patterns of production, cyclical business cycles, lack of required skillset, and underemployment. It also suggests policies such as vocational education programs, job placement agencies, and flexible labour market regulation to decrease unemployment.

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Foundation of Economics
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Reasons for Unemployment in Australia
Noteworthy, the Australian economy is struggling with high levels of unemployment. There are various reasons for
rising unemployment rates in the country such as changing patterns of production (Economy watch 2010).The change in
patterns of production led to massive loss of employment opportunities. The change in production techniques might be
due to technological advancements thus causing structural forms of unemployment. With the modern ways of doing
things, there are changes taking place at the workplace which might displace employees who are not adequately skilled
or equipped to deal with the changing patterns of production. In addition, the decline in the demand for labour due to
cyclical business cycles has also contributed the growing unemployment index for the Australian population (Reserve
bank of Australia 2013).Despite the growth in employment opportunities in the Australian economy, there is a lowly
cyclical labour demand thus employment grows slower than the supply of labour .This cyclical low demand is
responsible for the high unemployment rate in the Australian economy. Also, lack or required skillset for the available
employment opportunities has contributed to the unemployment figures .Moreover, the low wage growth bracket is one
of the reasons why most Australian’s are not seeking employment opportunities (Sloan 2018).Partly, underemployment
is responsible for the low wage growth levels in the Australian economy.
Measurement of unemployment in Australia
Noteworthy, the Australian economy measurement of unemployment is based on the global accepted view of
uunemployment.For a person to be considered unemployed in the Australian context, the person is has not taken part in
paid work for an hour in the preceding week despite being actively looking for work and would have been willing to
accept the work in the event that it were possible (Economy watch 2010).For persons to be considered unemployed,
they must fulfil the three conditions stipulated above .Predominantly, for most economies, unemployment implies the
state of willingness and ability to find paid employment opportunities but none is forthcoming. Through the measure of
unemployment, governments are able to assess labour force participation thus the importance of measuring
unemployment .According to the Australian context, calculation of unemployment includes the assessment of how
many hours a person’s needs to take part in employment for them to be considered employed and counting the number
of people who are either employed or unemployed (Reserve bank of Australia 2013).It is the mandate of the Australian
bureau of statistics to measure the labour force participation. Predominantly, the Bureau considers persons over the age
of fifteen years to be eligible for employment and unemployment. The measure of unemployment is important because
it enables governments to be able to plan for welfare and unemployment benefits and also to calculate its labour
participation rates. Overall, the measure of unemployment is key for economic development planning.
Causes of unemployment
Notably, there are various s underlying reasons for the current unemployment rates in the Australian
economy such as lack of the required skills for the current job market (Burgess 2017).Particularly, there is a high figure

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for youth unemployment in Australia. Specifically, 12.5 % of youth are unemployed despite their willingness and
availability to work for youths under the age of 10 years. For youths aged 15-24 years of age, there is a 5.6% of
unemployed youth according to the Australian Bureau statistics(Burgess 2018).Majorly, Australian youths are
unemployed due to the fact that they lack the skillset requires for the current Australian job markets thus rendering them
unemployed for longer periods of time. It is vital that the Australian educational curriculum be in sync with the current
labour market requirements so as to prepare the youthful population while in school for the labour market .In addition,
the preference for migrant labour over native labour forces has created the high unemployment rates (Koukoulas,
2017).The preference for migrant labour might be due to the cheaper wages to the migrant labourers from exploitative
employers. The fact that more migrant labour is incorporated into the production sector makes qualified Australian to be
unemployed thus the high unemployment rates. It is important that there be a balanced employment between Australian
natives and migrants when it comes to employment opportunities.
Classify underemployment accompanied by practical examples reflecting on the Australian labour market.
Basically, underemployment implies the underutilization of a workers skillset, education of presence at work
through lesser working hours than the norm (Amadeo 2018).Predominantly, there are two forms of
underemployment, visible underemployment and invisible underemployment (Amadeo 2018).Essentially, under
visible forms of underemployment, workers work part-time. Recently, the Australian male labour participation rate
has been marred with visible underemployment. Particularly, the average monthly working hours for the male
Australian workforce has been reduced to 155 monthly averagely as illustrated in the graph below (Murphy
2018).Weekly, men work an average of thirty-six hours only which is considered the lowest in the forty years of
Australian workforce history. Regarding invisible underemployment in Australia

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
Determine why unemployment varies from region to region in Australia example Western Australia’s.
Northern territories?
Undoubtedly, there is an unemployment variance between the different Australian states. According
to the March Australian Bureau of Statistics, the unemployment rates in Western Australia were the highest
among the other states (Cassells & Coelli 2017).Particularly, the unemployment levels in Western Australia
stood at 6.5 percent whereas the figures for South Australia stood at 6.4 percent according to seasonal
adjusted statistics as shown in the graph below. There are various reasons for the disparities in the
unemployment gaps among the Australian states. During the mining boom, the rate of unemployment in
Western Australia fell by 2.7 percent which goes to show that the mining boom created more employment
opportunities for the Western Australian economy as compared to other Australian states (Cassels & Coelli
2017).Specifically, the higher unemployment rates in Western Australia has been due to the effects of the
global economic crisis. Its effect of the state was more severe than the other states.

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
(cassells & Coelli 2017)

What policies the Australian government can implement to decrease unemployment
Typically, effectively implemented policies have the potential to reduce the high unemployment rates
in Australia and elsewhere in the world. For the Australian context, as a means of eradicating youth
unemployment and underemployment, there should be vocational education programs during school sessions
and outside school vocational programs for school leavers to boost their skill and experience in readiness for
the labor market(Smith 2017).In addition, there should be job placement agencies across the Australian states
to help skilled and unskilled workers get employment opportunities faster so as to reduce frictional forms of
unemployment. The practicality of this placement jobs will save time for workers to get jobs as compared to
the non-existence of job placement centres .In addition, there should be mandatory vocational training for
employed workers to sharpen their working skills over time .This will help avoid structural forms of
unemployment on their part hence reducing the overall unemployment gap in Australia .In the United
Kingdom, the implementation of a work program which led to vocation training of youths and early retirement
due to the establishment of the pensioners funding has contributed to the low unemployment rates in the
country(Dolado 2015).
It is imperative that the Australian government introduces early pension and vocation training for its
youthful population. In addition, flexible labour market regulation and improved bureaucracy effectiveness
have been responsible for the reduced unemployment levels in most OECD nations. If the same were applied
in Australia, the unemployment rates will definitely
Conclusion: How can the government decrease unemployment in your country of birth
Majorly, economic growth rate is likely to effectively reduce massive unemployment rates (Borland 2017).In
addition there should be target programs for the unemployed to make them employment ready. Such programs should

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be targeted towards the young population so as to prepare them for the job market at a very young age. The programs
are aimed at boosting the employment opportunities for the unemployed youth. Also, through job placements the
chances of employment opportunities will increase. The constant growth of economic activity in Australia can create
more employment opportunities due to increased private and public expenditure and increased level of investment both
foreign and domestic which is possible in a growing economy. It is imperative that the Australian government
implement investment friendly policies, better infrastructure, and favourable macroeconomic environment for growth
for the economy. Notably, part of the indigenous Australian population are highly unemployed thus constituting a huge
part of the unemployment levels. There is need to address the indigenous population high unemployment rate. This can
be done through equal educational opportunities for the indigenous Australian population as as they can qualify for jobs
alongside other Australians on an equal footing (Biddle et.al 2016).
Also, various instances of discrimination has been meted against the indigenous Australians politically,
socially and economy thus making them less competitive in all economic, political and social matters thereby
contributing to low economic growth rate of the Australian economy. It is vital that the indigenous population be given
training, education and favourable workplace policies to boost the low employment rates for the indigenous Australian
population.
References

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Biddle, N.,Hunter,B. ,Yap, M & Gray, M.(2016).”Eight ways we can improve indigenous employment”. The
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Cassells, R & Coelli, M. (2017).”Fact check: Does Western Australia have the highest unemployment in the country?
“.The Conversation. [Online].March 9.Available at https://theconversation.com/factcheck-does-western-australia-have-
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content/uploads/2017/05/Unemployment-Report_Final-1.pdf[Accessed 28 May 2018]