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Economics Assignment | Unemployment in Australia Assignment

   

Added on  2020-05-16

14 Pages3168 Words220 Views
Running Head:UNEMPLOYMENT IN AUSTRALIAUnemployment in AustraliaName of the StudentName of the UniversityAuthor note

UNEMPLOYMENT IN AUSTRALIA1Introduction Unemployment is a matter of concern for all countries every stages of economicdevelopment. Persistent unemployment results in poverty and misery. People who remainunemployed for a considerably long period are gradually excluded from the mainstream life.The effect of unemployment transmitted across generations. It hampers child developmentwith generating conflict in home. All types of economies experience some form ofunemployment resulted from population growth, shut down of firms and changes in theemployment structure. Unemployment causes great damage to individual and social life. The economy of Australia has undergone severe changes in its production structure.The changes have been resulted from technological change in production, integration into theglobal market, increasing competition with low wage countries in manufacturing goods andservices and changes in consumption pattern with rise in real income. There has been asustained job loss in production industries leading to decline in job opportunities for thosehaving only modest level of basic and formal education. This causes a rise in unemploymentincidence in Australia. However, some part of the economy is expanding openingopportunities especially for woman. Unemployment in Australia often becomes intenseproblem for the economy. The paper analyzes unemployment trend in Australia for the last five years. Australiahas faced different types of unemployment resulted from structural and cyclical factors.Youth unemployment and long-term unemployment are two prevalent problems in Australia.Unemployment also differs across different states of Australia. Immigrants coming inAustralia from different parts of the world aggravates the unemployment problem. Types of Unemployment in Australia

UNEMPLOYMENT IN AUSTRALIA2The three common forms of unemployment in an economy are frictional, structuraland cyclical. The first two types make natural unemployment. The third is related withbusiness cycle. In times of recession, the decline in economy’s demand causesunemployment. Every economy even those are in a healthy state has some amount ofunemployment. This is known as natural rate of unemployment. Any structural shift in theeconomy causes some people to become unemployed. This type of unemployment is calledstructural unemployment. Frictional unemployment is the unemployment in betweentransition of two jobs. An economy experiences cyclical unemployment because of businesscycle contraction (Fujita and Moscarini 2017). These forms of unemployment when causepeople to remain unemployed for a long period results long-term unemployment in theeconomy. Australia has different forms of unemployment. Since the middle of 2011,unemployment in Australia has increased by ¾ percentage to reach at 5 ¾. The factorscausing unemployment in Australia include a weak demand for cyclical contraction,structural influence and mismatch between workers’ skill and job vacancy. In the past fewyears, declining prospects several mining projects and deterioration of mining investment hasweighed out labor demand in mining and related sectors. The decline in employment duringthis phase is more concentrated among males occupying a larger employment share in miningand related cyclical industries. There are workers in Australia who are leaving their existingjobs to find new jobs and hence are unemployed for the time being. This leads to frictionalunemployment in Australia (rba.gov.au, 2013). The mismatch between ability of workers andvacant jobs causes structural unemployment. It is though difficult to capture how much thestructural factors are causing unemployment however; the long-term unemployment inAustralia has increased in recent years. Most of the people remain unemployed between 4and 52 weeks and are unemployed because of cyclical factors.

UNEMPLOYMENT IN AUSTRALIA3Unemployment trend in last 5 yearsFigure 1: Trend in Unemployment in Australia(Source: tradingeconomics.com, 2018)2013-2014 The unemployment rate in Australia during 2013 had recorded a slight decrease withunemployment decreased by only 0.1 percent and became 5.6 percent in September 2013.The number of persons remained unemployed decreased to 697,100 accounting a decrease of14, 700 from the previous level. The seasonally adjusted rate for labor force participationdecreased by 1 percentage point to become 64.9%. The number of persons employed hadaccounted an increase by 9,100. During this time there were 11,645,800 people employed(seasonally adjusted). The seasonally adjusted measures for full time employment shows anincrease in full time employment by 5,000. As against this, the part time unemployment roseby 4,100. Despite small increase in the total employment, there were a recorded decrease inaggregate working hours by 6.4 million. The performance of labor market has deteriorated in 2014 with unemployment rateaccounting an increase and reached to 6.1% in September 2014. The unemployment rate

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