Unemployment and Wages in the Labor Market - Economics

Running head: ECONOMICS 1
Economics
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ECONOMICS 2
Unemployment and wages in the labor market
Macroeconomic is a branch of economics that deals with macro issues in the economy. It
provides explanation to aggregate phenomena that affect a country’s economy and the economy
of the whole world (Agénor & Montiel, 2015).It is different from microeconomics that deals with
allocation issues within the household. This essay discusses wages, unemployment, and the
general labor market. In the current world, news about agitation by labor unions to have
minimum wages increased are common. Most governments also treat unemployment especially
among the youth with utmost priority as they seek to achieve levels of full employment.
Unemployment is a situation in which human resources are readily available and are
capable of being utilized to generate returns but are either underutilized or completely unengaged
(Keynes, 2018). Labor is an important factor of production besides capital and enterprise.
Optimum utilization of labor increases productivity while unemployment breeds lower economic
growth and a poor society. In Australia, unemployment rate as at September 2018 stood at 5.2%.
The Australian Bureau of Statistics reported that, unemployment declined by 26,500 from
August. The statistic continues the continuous steady decrease in the rate of unemployment in
Australia in the recent months. Figure 1 below shows the trend of unemployment rate in the
country between September 2017 and September 2018. From the graph, it is evident that the rate
of Australians who are involuntarily unemployed has been declining steadily over the last one
year.