The Rate of Unemployment in Australia - Assignment Example

Unemployment Date: Institution: Introduction Unemployment is the situation of an individual who is able to work, actively looking for work but is not able to get a salaried job (Healey, 1998). However, it is important to know that to be regarded as unemployed; an individual should be an energetic affiliate of the labor force and actively seeking a remunerative job. Joblessness is a plague in nations at every level of economic growth (Kriesler, 1999). Unemployment, mainly continuing unemployment, is the chief cause of poverty and bother in a society. It is the basis of massive personal and economic hardship for several people and their families. The struggle against joblessness is critically significant. However it is stated that this fight can only win by focusing on job provision and opportunities rather than slogans and punishments. This paper therefore illustrates the issue of unemployment and discusses the policy responses of Australian government to this issue. The rate of unemployment in Australia As of March 2002, the Australian Bureau of Statistics (ABS) approximated that 622,300 individuals were not employed in Australia at a pace of 6.3 per cent (McKay, 1997). While the rate of unemployment is important, it also has a number of very real constraints. It does not show what jobs are being created or disappearing, whether they are causal or long term, part-time or full time. It also does not mirror whether individuals are working for many hours or not sufficient hours, or the quantity of time they remain without task. Joblessness is not a problem exclusively for the people who are not paid; it is a crisis for everyone. If individuals who have no money to spend, domestic businesses do not sell their commodities and this increasing consequence can impact on whole economies. The rate of unemployment is a figure generated every month by the ABS. ABS defines a person who is unemployed as an individual who is not in salaried employment who is actively searching for job (Bell, 2000). A person doing salaried job in week for at least one hour is not regarded as unemployed. Several people are slightly connected to the labor force- they desire to work but are not aggressively looking for employment. Occasionally people stop searching for job due to the deceptive notion that they will not be succeed (Bell, 2000). The discouraged job seekers might think they are too young, or too old, or do not have the skills a boss would require. This is considered as hidden unemployment. The other leading category of people not mirrored in the statistics is the people working but would rather work extra hours, the underemployed. As of February 2002, more than twenty seven per cent of part-time employees desired to work extra hours (McKay, 1997). Three bases of data are applied to calculate the numbers showing the labor force in view to unemployment. These entail the monthly labor force review carried out by the ABS, data from the Job Network and Statistics from Centrelink (Healey, 1998). Furthermore, the ABS further tries to group the final data into divisions involving education, region, age, occupation, and sex. Presently, as stated previously, the ABS affirms that the rate of unemployment in Australia is roughly 6.3 per cent and yet, this number does not put in a nutshell hidden employment (McKay, 1997). Unfortunately, anybody can become jobless readily. Statistically, though, indigenous Australians, freshly arrived migrants, individuals with disabilities, youths and older employees who have been cut back are most expected to be unemployed. Individuals residing in isolated and rural societies also have greater rates of joblessness. According to Healey (1998), youth unemployment is great across Australia. There are, nevertheless, fewer youths looking for jobs than in the past, as majority take on education and training prior to entering into the job market. Reasons for unemployment in Australia Individuals experience a number of obstructions to employment. The most central barrier is that there are insufficient jobs for those who desire to start paid employment (Bell, 2000). In February 2002, for every job post, there were still seven job-seekers. There are also not sufficient supports accessible for individuals looking for paid jobs, like access to inexpensive child care and rehabilitation or mechanisms of support for individuals with disabilities. Also, ironically, potential employers frequently regard people as too young or too old, therefore age can be a hindrance to employment (Bell, 2000). Other hindrances relate to where individuals live. There are dissimilarities between rural and metropolitan levels of unemployment, and also severe differences involving suburb in every chief Australian cities. In Australia, unemployment is not even across all categories (Healey, 1998). Individuals who have greater risk of joblessness in Australia are the single people and the youth. According to 2005 estimations, joblessness among people who are married was only three per cent. Then again, the rate of unemployment in single people was nearly four times that of people who are married. This may be caused by some reasons. For instance, unemployed individuals are less expected to get married. There is less financial strains experienced by single people and thus may be highly understanding towards unemployment (Bell, 2000). The fresh entrants to the job market are the youth. As such, they take extended time to get settled in a stable job. Fresh entrants to the job market frequently experience spells of short period job loss in their endeavor to look for an appropriate job. In case of unproductive job searches, the youth might experience long-standing unemployment. Another category at high possibility of unemployment in Australia is the immigrants. In Australia, the settlers are also fresh entrants to the job market. Furthermore they are not familiarized with the job culture of Australia. Several settlers also lack necessary skills and confidence in English (Healey, 1998). Therefore it becomes harder for them to acquire jobs due to this. The effects of unemployment According to Healey (1998), the rising impact of globalization has led to various changes in the Australian society. The economy of Australia has undergone large alterations in the arrangement of what it generates and how (Kriesler, 1999). These are due to technological transformation; by fuller incorporation into global markets, along with the increase of competition from lower salary nations in the making of manufactured commodities (and progressively more, services); and by alterations in the pattern of use as actual incomes increase. The continued job loss in the goods production has resulted to a major job opportunities decline for men who have only humble levels of recognized education (Healey, 1998). In part this is seen in unemployment data. But it is as well clear in the pulling out from the labor force altogether of such men. On the contrary, the expanding regions of the economy have been principally expected to provide work for women, whose share of salaried work has been increasing progressively particularly for women who are married and women who have dependent children (Kriesler, 1999). Continued unemployment leads to significant and extensive personal, social, and economic costs (Healey, 1998). However the recent concentration on temporary economic outcomes leads to social and indirect financial costs going unnoticed and hence not influencing decision making. Efforts to approximate the complete impact of joblessness have included a number of elements. These include loss of industrious output, financial expenses to government of communal transfers to sustain people who are unemployed and their families, levy and social insurance unavoidable, personal earnings losses for individuals who are unemployed and their families, skill loss, social exclusion and freedom loss, psychological impairment, criminal behavior, ill health and decreased life expectancy, loss of inspiration, demoralizing human associations and family life, loss of social principles and responsibility, and ethnic and gender discrimination (Bell, 2000). According to McKay (1997) unemployment has as well been connected with a wide range of other undesirable social effects for people and families; causality is not constantly clear, but is frequently likely to run in mutually directions. A study indicated that unemployment is linked with suicide, human capital loss, and poverty. Another study showed that there is connection between unemployment and isolation, homelessness, corrosion of self-reliance and self esteem, and stigma. There is also considerable support of a fundamental link between joblessness and unconstructive psychological states like decreased life happiness, depression and nervousness, as well as conflicts in the family, divorce and separation (McKay, 1997). Regarding unemployment and retirement, the issues of lasting unemployment amid older individuals could result in rebirth in aged poverty in Australia in upcoming decades. Elevated levels of lasting unemployment together with minor declining degrees of labor force input of older people may avert the likelihood for significant asset buildup. Home possession has been a very significant factor in controlling aged poverty in Australia in the ancient times. Additionally income inequality amid older individuals could well rise with some, as a consequence of continuing joblessness and unemployment, going into old age with very little and others having a considerable gathering of superannuation and other possessions (Tomlinson & National Conference on Unemployment, 1997). Policy responses of government to unemployment The policies that a government uses to decrease joblessness depend upon what it perceives as the chief causes of the unemployment crisis (Bridgman & Davis, 2000). For example, the government will encourage a rate of economic development that is enough to absorb unemployment and the development in the workforce, while together holding down the inflation rate. Decreasing unemployment is amongst the major difficult task for the economy running. In 1994, the Keating government in Australia introduced a first complete set of unemployment policies in half of the century, named Working Nation Labor Market Policy. These policies entailed labor market aid, education and training schemes, and apprenticeships. Its objective was to help the lasting unemployment to attain fresh job skills and suit employment again (Tomlinson & National Conference on Unemployment, 1997). In the previous two budgets, the Howard government has tried various tactics concerning policies and the like to reduce the rate of unemployment in Australia. The focus of the 2002 budget concerned the Welfare Reform Package, which involved several fresh policies to confidently successfully decrease unemployment in Australia. This was planned to offer advanced degrees of service and support to the people having hardship getting employment. The fresh scheme policies where single parents who desire to keep benefits they receive as an unemployed resident and support a young person between twelve and fifteen years of age is obligated to attend a yearly meeting at Centrelink, or a curriculum which entails the activity of community service and / or part time job (Tomlinson & National Conference on Unemployment, 1997). People who are more than fifty years are at the moment required to claim equal benefits to those below, contrast to the previous Mature Age Allowance or Partner Allowance. Coaching credits will be provided, but on the other hand mutual commitment requirements were established. Lastly, every unemployed person face fresh conditions once they have been unemployed for more than three months, and are asked to go to interviews and job help courses to help them in their hunt. Even though Australians who are not employed get government help if they meet particular requirements, benefits of unemployment leave several to survive beneath the poverty line. Another policy used to reduce the rate of unemployment is monetary policy. This is the macroeconomic strategy which entails action by the Reserve Bank of Australia (RBA), in support of the government, to control the cost and accessibility of credit and funds in the economy (Mak, 2006). It is implemented to smooth the consequences of fluctuation in the cycle of business and control the economic activity level, employment, output, and price. The policy is used as a lasting strategy intended to keep price increases low, providing an attractive environment for employment development and investment. The moment the RBA consider there is a steady low inflation, which will have a higher variety for decreasing the rate of interest and hence to reduce the rate of unemployment. If the RBA believes that the degree of joblessness is nearing the natural rate, they will stiffen monetary policy to avoid unnecessary spending feeding into elevated prices and salaries. A pivotal role is played by the government if it invests in research and growth and shared infrastructures like education, community services and health (Halladay & University of Queensland, 1995). Creation of jobs is essential if the rate of unemployment is to be decreased. If governments make these investments, this will both maintain the fabric of community and create several employment opportunities that are meaningful. A significant matter of unemployment is the duration of time individuals are without time. Continuing unemployment is a major issue in Australia. As of March 2002, twenty four per cent of people who were unemployed had been without job for more than one year or more; of this category, fifty seven per cent had been jobless for more than two years. It is approximated that in five poor Australians, one is in salaried job although still not able to maintain himself or herself, the category is called the working poor (Bell, 2000). Several people in Australia are trapped in the phase of unsecure underpaid informal jobs, followed by times spent living on revenue support. This increasing number of individuals emphasizes the significance of forming quality jobs. Continuing unemployment is also basic to policy because of its impact on macroeconomic effectiveness (Mak, 2006). A labor supply collection with a great percentage of continuing unemployment will be described by structural inequality. Continuing unemployed individuals will be regarded as irrelevant in the hiring decisions of firms so that unemployment is greater than it may otherwise be. This has considerable implications for the financial plan. Additionally, structural inequality reduces the prospective for an economy to quickly recover from depression. As employers negotiate over a smaller pool of appropriate labor, salary inflation is more expected, even when joblessness is relatively high. Unemployment is still a major economic challenge in Australia, and long-standing unemployment mainly is a constant and costly occurrence (Bell, 2000). Several of the policy debate concentrates on the significant matter of solutions to the trouble. To further support participation and favor employment, the system of industrial relations also requires to be reformed in order to enhance the flexibility of the labor market. Opinions regarding government’s response adequacy Australian governments’ reactions to the issue of unemployment were largely adequate to some extent (Bell, 2000). Australia has tried to keep the rates of unemployment at lower rates as compared to several other countries globally. Still, joblessness in Australia has been a constant issue for the economy of Australia. However, broad attempts have been implemented in Australia so as to manage the unemployment issue and maintain the rates of unemployment at low degrees. Personally, I think that whist various effective strategies are in position to decrease unemployment in Australia, and actually the unemployment rate is lower than it has been in several years, further can be done to help the unfortunate people. It has been stated that the primary step is to recognize joblessness is a structural issue, not one of lazy people. This shows that governments have a responsibility to play in developing suitable policy: as joblessness may be worsened by government policy it can correspondingly be improved by political intervention. A strategy to decrease joblessness very significantly has a much better chance of achievement if it is grounded on improved government expenditure. A number of areas have been principally hard hit, with businesses that have formerly offered the massiveness of employment ending or moving to other places. In a number of these regions people from governments, business and the society have began working jointly to create employment and support local economies. In order to increase employment, individuals require suitable skills; therefore access to coaching is important (Bell, 2000). Programs of labor markets that provide genuine and appropriate coaching are required not systems which emerge to criticize people who are unemployed for their hardships, with slight concentration on job position and support. While various professions have placed various individuals out of work because of lack of demand, in disagreement various occupations need augmented numbers of individuals to fill the Australian demand (Bell, 2000). There should be establishment of programs for the support and coaching of the people who need work in specified fields, as it would especially hold both the nation and its citizens. The duty of further decreasing unemployment is hard, despite the present powerful labor circumstances. The occurrence of the previous decade and a half is that joblessness can be reduced but it needs continued economic development and salary boost in line with productivity development (Chapman, Kapuscinski & Australian National University, 2000). Some of the jobless people are normally lesser skilled and have lesser productivity than the current workforce. Consequently, the expansion of the opportunities for employment of the people who are unemployed can be fastened by a suitably set minimum salary. Conclusion In conclusion, the above discussion has presented various issues regarding unemployment in Australia and has tackled various features including the high rate of unemployment. The data is provided by the Australian Bureau of Statistics. The paper has discussed various factors that lead to unemployment in Australia. For instance, some employers consider unemployed people as either too old or too young. Unemployment brings about various negative outcomes like poverty and depression. Despite the fact that the rate of unemployment is high in Australia, the government has implemented various policies to reduce unemployment rate. For example, provision of benefits to the people who are unemployed. Unemployment is not equal at all levels. Joblessness is an unintentional state, which not only involve those surrounded by it, but the people who engulf such people. Australia is advantaged to be a democratic community, yet the government takes a dynamic concern in the troubles of the people and thus supports independence. The unemployment problems in Australia are immeasurable, yet they have solutions. In the coming years, it is expected that the rate of unemployment shall continue to reduce, because of the constant attempts of the government and residents. References Bell, S. (2000). The unemployment crisis in Australia: Which way out?. Cambridge, U.K: Cambridge University Press. Bridgman, P., & Davis, G. (2000). The Australian policy handbook. St Leonards, NSW, Australia: Allen & Unwin. Chapman, B. J., Kapuscinski, C. A., & Australian National University. (2000). Avoiding recessions and Australian long-term unemployment. Canberra: Centre for Economic Policy Research, Australian National University. Halladay, A., & University of Queensland. (1995). Exploring alternatives: Responses to unemployment in Australia. Brisbane: Dept. of Social Work and Social Policy, University of Queensland. Healey, K. (1998). Unemployment in Australia. Balmain, N.S.W: Spinney Press. Kriesler, P. (1999). The Australian economy. St Leonards, N.S.W: Allen & Unwin. Mak, N. (2006). The impact of macroeconomic announcements on the Australian fixed income market. McKay, D. (1997). The natural rate of unemployment in Australia. Parkville: Melbourne Institute of Applied Economic and Social Research. Tomlinson, J., & National Conference on Unemployment. (1997). Unemployment: Policy and practice. Queensland: Australian Academic Press. Read More