• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Unemployment HSC Notes

Extracts from this document...


Labour Force: Consists of all the employed and unemployed persons in the country at any given time. Also known as the work force * Persons aged 15 +, currently employed ? at least one hour/week * Self-employed people who work for at least one hour/week in their own firm/business * Unemployed people over 15 and actively looking for work * Australia : 11.5 million Participation Rate: Percentage o working population (15+) in the labour force, that is employed or unemployed Unemployment: A situations where individuals want to work but are unable to find a job and as a result labour resources in an economy are not fully utilised. Underemployment: refers to those persons who are working less than full time but would like to work more hours Hidden U/E: refers to these people who cannot be considered unemployed but don't fit the official definition of unemployment and are not reflected in unemployment statistics ? discouraged from seeking job Underutilisation rate: N0 persons actively looking for work + people able to ? 1 week< start work <4 weeks. In 2009 = 13.4% Types of Unemployment Structural: occurs due to structural changes within the economy caused by changes in technology or the pattern of demand for goods and services Cyclical: occurs due to a down turn in the level of economic activity, and falls during times of strong economic growth. As AD ? leads to less employment opportunities. Most of Australia's long term unemployment is cyclical. Frictional: people who are temporarily unemployed as they change jobs - they finished one job and not started another. This occurs as it takes time to switch jobs. During the changeover period such individuals are regarded as being frictionally unemployed. Seasonal: Occurs at predictable and regular times throughout the year because of the seasonal nature of some kinds of work e.g. fruit picker or mall Santa Long-Term: referring to those people who have been out of work dor more than 12 months ? ...read more.


Extensive structural and microeconomic reform during this time period, also results in a worsening of the unemployment problem (increase structural unemployment). People who lost their jobs in declining industries found it difficult to obtain new jobs in the growth industries, and these job vacancies required higher or completely different skills. These structural changes were exemplified by the introduction of new technologies and production techniques. Post 1991 recession, there was a gradually decline in the unemployment rate, generating the longest continual economic growth in Australia's economic history i.e. 17 years. In 2008 unemployment dropped to 3.9% its lowest in 34 years. There was some disparity of unemployment rate between the states, with WA and QLD benefitting the greatest from the rapid growth of the mining industry, due to the high commodity prices. However, this extremely low unemployment rate was below our NAIRU and the shortages of skilled workers posed another problem. The 2008 GFC and resulting downturn in global economic activity in 2009 helped to reduce the demand for labour. It was estimated that unemployment would reach 8.5% by 2010/11 and would recover by 2011/12. Yet since Australia's labour force proved to be resilient, the Australian economic was not as affected as predicted and as a result the unemployment rate did not increase by much. Since the downturn, many firms were unwilling to let go of their workers as there was already a shortage of workers. Instead many people were switched from full-time to part time jobs, in effect increasing the underemployment. Therefore since underemployment is not counted in the unemployment figures, the unemployment rate is insufficient and masks some of the problems. To keep reducing the unemployment rate, Australia needs to achieve economic growth rates of more than 3.5%. This relationship between economic growth and the unemployment rate is explained by Okun's Law; to reduce unemployment, the annual rate of economic growth much exceed the sum of percentage growth in productivity plus the increase in the size of the labour force in any one year. ...read more.


o Deregulation of labour market ? lower minimum wages and a lower level of unemployment. Polices Reducing Unemployment * Macroeconomic policies used to sustain economic growth and avoid a recession, o Goals of sustaining GDP growth within 3-4% band and keep inflation in 2-3% band has been central to macroeconomic policy since early 1990s. o GFC caused a shift towards expansionary fiscal policy o Government directly intervened in economy? government spending stimulated aggregate demand * Microeconomic reforms aim to increase economic growth and job creation, and target structural unemployment o Main policies such as tariff reductions deregulation, national competition policy, privatisation and tax reform * Labour market polices, aim to help individuals gain employment o These polices available from government range from: * Education and training programs for people who are out of work or at risk of losing jobs * Measures to improve matching of unemployment persons to job vacancies * Policies to increase the demand for labour, by making it more attractive for employers to hire workers such as through wage subsidies. * Howard Government ? encourages greater demand for labour by reducing regulation of the labour market. 2006 government exempted businesses with less than 100 employees from unfair dismissal laws. * Howard government also aimed to improve in incentives for unemployed individuals to renter workforce such as 'welfare to work' polices. Making it more difficult to obtain income support payments if out of work. * Governments can also improve the efficient with which individuals are able to find work, ? reduce FRICTIONAL UNEMPLOYMENT. Rudd government created Job Services Australia, collection of competing employment agencies in contract with federal governments, for successfully placing unemployed into jobs. * Active labour market programs. Such as subsidies for employers to hire employees, programs to help unemployed people acquire work skills, training and apprenticeships programs and individual assistance for employees to help them locate suitable training and jobs * Global downturn ? renewed attention onto labour market polices. COAG established $1.5 billion Jobs an d Training Compact ? measures targeted at young unemployed people ?? ?? ?? ?? UNEMPLOYMENT BASIL RAZI 1 ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level UK, European & Global Economics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level UK, European & Global Economics essays

  1. Why has GDP growth been so slow in Somalia?

    Studies have shown it to contribute 15-25% of growth in GDP per capita, and up to 90% in improving the quality of the labour force. The theory of human capital considers education as an investment that makes individuals more productive and focuses on pecuniary gains.

  2. Infation HSC Notes

    Nominal Wage: is the pay received by employees in dollar terms for their contribution to the production process, not adjusted for inflation. Stagflation: occurs when the rate of inflation and the rate of unemployment rise simultaneously International competitiveness: refers to the ability of an economy's exports to compete on global markets.

  1. Are recessions inevitable?

    a number of recent fluctuations in economic activity have been caused by unexpected changes. Nowadays, globalisation has rapidly changed they way countries produce. Hence, another vital aspect is international trade. Accordingly, the UK has been affected by the global recession, especially as the EU accounts for 60% of its trade.

  2. In what ways is the government attempting to increase the willingness to wor

    Workers are willing to increase their hours worked from L1 to L2 as they gain a higher wager from W1 to W2. However, above this point even if the wage rate increased from W2 to W3, the number of hours worked would fall form L2 to L3 because the worker is substituting work time for leisure.

  1. Will trading fairly reduce world poverty?

    Raw cotton carried no import tax. This raw cotton was now used in Lancashire to mass-produce cloth at a price that was cheaper than cloth made in India. The result was that people in Lancashire had jobs, the mill owners and shippers made fortunes whilst the Indian textile workers lost their jobs and became poor.

  2. The failure to cooperate and coordinate macroeconomic policies will leave countries worse off than ...

    Note that the domestic fiscal expansion has a negative effect on the price level because the appreciation of the home currency lowers the price of foreign goods in the home market, which means on impact, and per unit of output expansion achieved, fiscal policy is less inflationary than monetary policy.

  1. Globalization is undoubtedly not a single phenomenon.

    free trade agreements such as GATT (General Agreement on Tariff's and Trade). Additionally, regional trade agreements have also been developed, which have included single markets established by the European Community and NAFTA (North American Free Trade Agreement). However, by the 1970's the effects of globalization became increasingly visible, both in terms of the benefits and the disruptive effects.

  2. Is it fair to blame investment bankers for the global downturn ?

    He has previously worked for politically independent media but his main contract of employment has been with FT since 1987. This political bias may narrow his perspective. Additionally, in 2011, he won four awards in multiple countries.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work