Unemployment In Australia For Government Policies

Unemployment Trend in Australia

Discuss about the Unemployment In Australia for Government Policies.

The paper aims to explain clearly unemployment condition in Australia. It dwells on the unemployment trend among different category of citizens. It looks at various types of unemployment; issues related to unemployment, Government policies concerning unemployment and unemployment status in various states (Virtue 2014). The paper aims to show the causes and analyze the existing trend in Australian labor market. Australia has been experiencing unemployment growth for a quite extended period. It has been a menace in Australian economic status that hinders the need to enhance the growth of sectors that can sustain the continuous population increase with the higher number of youths targeting employment opportunities. Since the beginning of 21st century, the country has encountered difficult situations on how to curtail unemployment. An increasing number of individual in the country without job opportunities has been felt. Among the unemployed are youths who represent a larger percentage of the category of unemployed. Since, 2008 after a Global Financial Crisis, the country experiences an estimated 12% of youths unemployed with a composition of age bracket of 15 to 24 years.

In comparison to adult unemployment, two-third of unemployed represent youths while adults are only represented by one-third of the unemployed population. Children are more exposed to this risk due to structural and seasonal factors dictated by labor market conditions in the country. Economic status of the country is still unstable since the happening of GFC, a factor which relates positively to unemployment. Youths suffer most due to lack of skills and experiences required by companies in the market. Therefore, their employability is negatively derailed. The majority of children are forced to look for either part-time or casual jobs because a bracket of teenagers is still in learning institutions, a fact that restrict their flexibility toward work hours.

Australia being part of global economy, it is not eliminated from the circle of countries that suffer from unemployment crisis. GFC caused a lot of economic challenges to the socioeconomic status of the global market, a situation that boosted labor market failure among other adverse effects. Globally, more than 75 million youths are looking for jobs, though, 60% of them have a probability that they may get opportunities. However, the remaining 40% are directly unemployed. In a nutshell, the majority of the youths suffer more worldwide in the labor market compared to adults, a fact that is right with Australia. According to Australian Bureau of Statistics, the country has experienced various economic status; boom and recession that affect the financial performance of the county’s economy on a radical concept. In 2000 to 2001, the country was hit by a crisis that short-lived for two years, a crisis that left many youthful categories with no expectation of job opportunities. The recent crisis that has hit Australia is the GFC in 2008 which has interfered with monetary and fiscal measures that a country can use to achieve the stability of the economy.

Youth unemployment in the country is defined as the number of kids within the age bracket of 15-24 years who are ready and looking for a job but cannot find. According to International Labor Organization, an unemployed person is an individual who has not worked for at least an hour for the past one week and does not have a possibility of working shortly. These are people who are without work though available to work and deliberately looking for jobs. Youth unemployment in the country has increased from 13.19% to 13.24 in July this year. This is a statistics that is overpowered by only youth unemployment condition in 1978 and 1992 which were at 13.48% and 20.22 respectively. In 2008, the country experienced a low rate of unemployment among teenagers at 7.61%.  Unemployment among the youths is not equally distributed, with men affected more compared to women. There is a high possibility of a young man failing to secure a job compared to a young lady. The resulted unemployment situation in Australia among youths is a disaster that requires intervention, however, through unstable economic structures the country is not in a position to overturn the case. The trend clearly shows how the country is in a mess, and if economic fluctuations are experienced again, the country will be in a desperate moment to Carter for its youthful population.

Unemployment Among Youths in Australia

The country suffers from three main types of unemployment;

This is a kind of unemployment that happens when the level of country’s national spending and the production ability is weak. This typically happens in recessions and depressions. Such unemployment does not survive when recessions or depressions end. Usually, it ends when the boom periods starts. It is facilitated by low spending rate in the country thus lowering the sales on goods and services. Following the GFC that happened in 2008, the country suffered a recession period (Estevão, Sá and Petrongolo 2008). This interfered with the country’s spending capacity on property and services thus slowed the rate of economic growth and the GDP. Consequently, the slow economic growth has a direct relationship with the employment opportunity in the economy. A fall in the level of economic growth lowers the job opportunities hence unemployment scenario is approached. All the adverse effects are accompanied by shrinking of job vacancies, the decline in hours of work and period of unemployment increases. The global recession and recent GFC which still have an effect on Australia economy, slow down the job creation strategies. Cyclical unemployment contributes to almost 5% of unemployment in Australia. Moreover, the demand side of the market become weak due to the following conditions;

• Pessimistic nature of consumers. Consumers are attentive during recession periods about their future incomes and employment status. Therefore, they intend to save instead of spending on goods and services. Such a decision that has hindered the spending strength of the country.
• Reduced business confidence level. When companies are depressed about the sales and profit in future, they decide to stop or lower the standard of investment spending on new business entities thus weakening economic growth.
• Reduction in household income. Economic recessions reduce families’ income, a situation that lowers spending possibility. This is elaborated by a downturn in 2008 that has effect in the country to date.
• Recession experienced by principal trading partners. Major trading partners of Australia have been in slowdown and recession, a fact that affects the country’s economy negatively by reducing their level of spending on the county’s productions. This has been happening with countries like Japan, United States, and Britain.
• High rates of interest. Higher rates of interest on credit discourage borrowing that is used and consumption and investment purposes.
• Increased taxation on government spending. Practices encouraging high taxes on the government spending have been at the core center to reduce the capability of expenditure of the country. They deter the possibility of the state to spend regarding the costs involved. Failure by the government to pay slows the economic growth.

This is a type of unemployment that exists even in healthy economic conditions. In the country, before 2008, there was a disappearance of cyclical unemployment though the economy still has undergone unemployment rate of 5%. From the name, it typically exists in economy regardless of the challenges created by recessions or depressions in either country of the global market. Natural type unemployment happens due to changes in supply-side of the market. Reduction in supply affects firms and organizations’ organization, production, the level of profit and ability to survive in the market. Also, it hinders company’s willingness to employ more labor force. Australia level of unemployment is at the highest compared to recent years, with 13.24% youths unemployed. This is a worse rate considering the degree of birth rate in the country that makes it a youthful population. Failure to employ labor force as demonstrated by natural unemployment will only worsen the situation.

It happens due to changes in the production of goods and services. It contributes primarily to the rate of unemployment in Australia. A substantial structural change in the production sector has been taking the course. This is due to technological and high competition level in the global market from economic powers who produces manufactured goods and services. Furthermore, the changes create alteration on the consumption patterns due to the effect on the real level of income. The following are the changes that cause structural unemployment;

• Lack of profits and business closure. Economic challenges may subject a company to reduced profitability. This may be necessitated by high costs of production, high taxation rate and high-interest rates by financial institutions. Thereby doing the business to be bankrupt hence closure. This happened in 2014 when companies like Shell Refinery, Alcoa, and other businesses announced about future openings due to closure.
• Technological change and mismatch of skills. Restructuring of technology to adapt to new technology embraced by the global market has created unemployment level to rise. Use of computers, online shopping, and online marketing are some of the new changes that make labor force less necessary. Computers are operated with people with skills; however, they take responsibilities that would have performed by many people. Mismatch of competencies among youths and another category of people in the labor market is too contributing negatively.
• The majority of job seekers lack skills required in positions advertised, and firms are not ready to get them trained. This behavior hinders the possibility of landing a job thus forcing unemployed to remain for a long-term period without jobs.
• Globalization effect. The spread of multinational trade in the countries has enhanced the high rate of competition in the market. Companies that are suffering from the recession are therefore not destined to compete in such competitive-harsh market.
• Relocation of industries. Some industries have relocated from Australian to countries with real economic power. The employed category remains unemployed, and those expected to acquire job by such company remains jobless with no known period of getting the opportunity.

Australia is a country with different environmental conditions; thus the rate of unemployment in different states differs. The prices in states such as North South Wales, Western Australia, Tasmania, Queensland, South Australia, Tasmania, and Victoria varies. Tasmania leads with the high unemployment rate at 22.2%, with youth unemployment of 10.1% (de Vries 2014). It suffers most from the GFC and other activities that affect the economic growth of Australia. Youth unemployment is too elaborate compared to other states in the country. South Australia follows with a general of 21.8% unemployment rate. However, it has 15.4% youth unemployment rate. It was the highest jobless youth rate in 2008, currently second after Tasmania. The state of Tasmania suffers from a high incidence of heterogeneity which runs from 12.6% to 19.1% in Barossa region (Carvalho  2015). Western Australia comes third with 21.3% unemployment rate.  It has a youth jobless capacity of 10%. The State is performing on youthful category even though; it was at 5.6 % of unemployed young men. Through the past periods, it has experienced a fading in the mining boom which has contributed to its rating.

Types of Unemployment in Australia

Queensland comes fourth after Western Australia with 21.2% of the unemployed population. Regarding youths, it had 13. 95 of unemployed young people. Though reduced, it still above the natural level of unemployment. In 2008, the State had 7.0% of unemployed youths, however; currently, it has 12.5%. Victoria follows Queensland with 20.5%. It had 14.9% of jobless youths compared to 2008 statistics of 9.45 (O’Callaghan 2015). The major areas in Victoria affected by unemployment are Melbourne, Geelong, and Hume. New South Wales’ rate of unemployment is 20.0%. In 2008, it had a youth jobless rate of 10.0% and 12.8% in 2015. The remaining states such as Northern Territory, and Australia Capital Territory have an unemployment rate of 18.5%, and 18.6% respectively. This is as per August 2016. These are the states that have a low level of unemployment opportunities in Australia.

Australia as a country that suffers from unemployment has various matters related to its problems. These problems contribute positively and negatively towards its strategic plans aimed at reducing poverty to a natural level.

These are long term adverse effects contributed by lack of employment in the country. The majority of unemployed people suffer from various problems initiated by jobless status. Apart from short-term challenges, there are long-term problems. Unreliable income is a constituent of scarring effect among youths (Ghayad and Dickens 2012).  Lack of employment creates uncertainty on when to get income. It promotes frustrates among the jobless category to the extent of not knowing what relevant to participate in for the source of revenue. The effects are long lived in individuals even to their adulthood; it creates a static state dependence.

Lack of job today among the youths in Australia increases the possibility of being jobless in the future. This is illustrated by scholars that early unemployment at a young age affects even future job opportunity as well as earnings to a period of 10 years (Bell and Blanchflower 2015). The probability of being jobless in future if one is currently unemployed is three times the chance of not getting a job today. Such ideologies create mayhem among the youth who are willing and able yet they can’t secure opportunities. If whatever the scholar’s posit is correct, then the majority of Australian children will have difficulty getting a job in future. A possibility that will make many dependent on their undefined means of income (Morsy 2012).

Unemployment effect poses with it a signal of poverty. If a young population sense a signal of poverty, there exist social exclusion which is detrimental to the growth and integration of economy. They feel alienated and lack health securities. Financial handicap causes poor demographic composition in the society. Therefore, if unemployment effects are not tackled, there is a higher chanc4s of Australia being an underdeveloped country. Studies illustrate the large effect of killing a dream of youths by denying those jobs (Henkel 2015). The mindset knows very well the capability of this group of people, through employment, every citizen is assured of life satisfaction. Failure to offer jobs will lead to mental health problems. More often, after failing to attain a job, many involves in drug abuse among other terrible and dangerous practices with adverse effects on health. Another side effect of unemployment contributing to mental deterioration is a lack of work experience and skills (Cockx and Picchio 2013). Lack of work experiences hinders chances of getting jobs thus increases long-term unemployment period accompanied with a hangover for jobs.

Unemployment in Various States in Australia

The Australian government has been trying various strategies to improve unemployment conditions in the country. In 1994, the state came up with policies that change the provision of income in passive form to active form. The active form assures for re-employment among employees. It incorporated training of employees, making receipts of unemployment benefits and job creation. This policy aimed to streamline the labor sector to make employees well equipped with both skills and experience (Carvalho 2015). The program too activated for active market programs to help to solve term unemployment issues. By 1997 after the implementation of labor marketing programs, the country decided to privatize its public employment sector entirely. This program helps in solving job matching challenges, talent search through and training on managerial roles. The new programs then helped the government to reduce spending on the labor market. The programs for both employer and employee required unemployed to work for six months part-time with no payments. Providing experiences to the unemployed group were mean. Through free part-time commitments, employees were trained on how they can help the community in community servicing without expecting payee.

The labor department decided to change the above-discussed policies in 2009, where a new unit known as Job Service Australia was formed. Job Service Australia aimed at providing incentives to jobs of vocational category and involves training for longer periods. Through, the program much jobless have been enticed by the incentives to join the vocational training whereby in process unemployment can gain experiences and skills. The Australian government has been using the program though not much efficient, the costs of controlling unemployment opportunities are reduced (Knotek II and Terry 2009). In collaboration with Common Wealth, the country has appointed relevant employment coordinators as an initiative to deal with unemployment in prioritized locations of the country.

Conclusion

The study has confirmed levels of unemployment in Australia with possible causes. The significant contribution is unstable economic conditions not able to support financial requirements by both youthful and adult population who lacks skills and knowledge due to prolonged unemployment menace (Number 2013). The level of jobless among youths is in a sad state with the majority falling within 20-24 years of age. To curb the problem the country should work towards restructuring economic that can accommodate both skilled and unskilled job seekers. Policy recommendations should be looked at to identify the loopholes and mechanisms to curb unemployment. Among the concern to prolonged unemployment situations, is to have a small payment basis as an entry to the job market after which the acquired experiences and skills can elevate one to the dream salary.  Primary entry can help prevent social challenges due to psychological torture injected on those unemployed citizens (Carcillo and Königs 2015). The research has shown that mismatch of skills does contribute to the unemployment in the country. The county should come up with clear guidelines on the building of connections young population to adequately adjust to the requirement through learning and vocational programs.  Numerical and literacy test are the ingredients of improving their labor demand; therefore, the government ought to contribute to investment in such programs.

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