Unemployment Policy In Australia: Causes, Types, And Solutions

Unemployment Policy In Australia Percapita

Causes of Unemployment in the Australian Economy

Discuss About The Unemployment Policy In Australia Percapita.

Undeniably, unemployment is a scourge in various economies and the Australian context is no exception. The unemployment patterns in the Australian economy are rising due to changing production patterns being experienced in the country, the unemployment levels have risen too .In addition, there is the technological adaptation in the various production sectors of the economy which has rendered some workers unemployed due to the lack of the required skill set to fit in with the technological advances (Economy Watch 2010).Alongside changing production pattern and technologies, the Australian economy unemployment rate is due to the low demand for labor following the harsh business cycles within which the Australian entrepreneurs are battling. The low demand for labor has contributed to the slow pace of hiring labor services by entrepreneurs (Reserve bank of Australia 2013).Currently, Australian business have been facing tough cyclical business cycles due to the low economic growth and investment rates. In addition, the stagnation in the wage growth level of the Australian minimum wage is not considered an incentive for the unemployed to seek employment opportunities thus the increased rate of unemployment (Sloan 2018).Typically, an increase in wage growth is likely to trigger more employment opportunities as the reverse is true.

Predominantly, there are two types of under-employment. Namely, visible and invisible underemployment (Amadeo 2018).Essentially, underemployment represents the state of working for less hours as compared to the normal working hours for that particular work. Typically, underemployment is part-time employment whereby employees are allocated a few hours to work in a particular field of work whereas full time employment is inclusive of more working hours. Basically visible under-employment entails working for fewer hours than usual whereas invisible unemployment denotes the state of inadequate income. According to recent statistics by the Australian bureau of Statistics, the male Australian population have been experiencing visible unemployment. Specifically, the Australian male population has been working for an average of one hundred and fifty-five hours weekly (Murphy 2018).This is a typical case of under-employment which requires government intervention to create more full-time employment opportunities. Primarily, invisible unemployment happens within the income of employed persons. The detection of invisible underemployment isn’t easy. Through invisible unemployment, the income of employed workers is inadequate in sustaining their basic needs. The fact there is low wage growth in the Australian economy might be indications of invisible unemployment trends in the country though not conclusive proof.

Types of Underemployment in Australia

Noteworthy, structural unemployment is among the major types of unemployment in the Australian economy. Basically, this type of unemployment is due to the lack of relevant skills for the current employment opportunities thus causing unemployment (Burgess 2017).Among the Australian population being structurally unemployed is the youthful Australian population .Due to their lack of adequate and relevant skills and expertise, most of the Australian youths are unemployed. It is imperative that the Australian government introduce training opportunities ,nationalized curriculum tuned to the current market needs so as to adequately prepare the Australian youths for the labor market after finishing schooling. Also, the preference for migrant labor patterns over indigenous labor has left most of the Australian population unemployed .The preference of migrant over indigenous labor is due to the cheaper wages for migrant based labor (Koukoulas 2017).It is imperative that the Australian government regulate the influx of management into the labor market to avoid creating pressure on existing jobs and unemployment of indigenous labor force (Rafi 2017).There ought to be a balance between migrant and indigenous labor participation in the Australian economy to reduce the overall unemployment rate and to ensure that Australian indigenous population is economically empowered through employment opportunities and friendly wages to afford basic needs for their respective households.

Notably, the Australian economy measure and definition of unemployed persons is the same as the global definition.       Basically, to be unemployed in Australia requires the fulfillment of three conditions. Essentially person is unemployed if they were actively seeking to be employed for a week with no success and would have been willing to be employed in the even that the employment opportunity had availed itself(Economy watch 2010).Predominantly, the mandate to measure unemployment trends in the Australian industry falls on the Australian bureau of Statistics. The importance of measuring unemployment lies in the fact that the Australian government requires such statistics for national planning and welfare resource allocation among other uses. Majorly, the unemployment statistic show persons who are actively looking for employment opportunities but are unable to access employment opportunities within the Australian economy. Majorly, the Australian unemployment index considers persons who are over the ages of fifteen years old and are actively looking for employment opportunities but are yet to get them as unemployed. Majorly, the Australian unemployment covers the youth, aging person’s unemployment, underemployment and overemployment among other forms of unemployment. Mainly, unemployment is calculated based on hours (Reserve bank of Australia 2013).

Structural Unemployment in Australia

Notably, there has been a variance in the unemployment levels among the Australian states. Particularly, the Australian state of Western Australia recorded the highest unemployment rate in March 2017 as illustrated in the graph below (Cassells & Coelli 2017).The high level of unemployment in Western Australia might be due to the decline in the mining industry. Following the boom in the mining industry, the level of unemployment has gone down as compared to the other states. With the mining industry facing decline in investment, the unemployment rates in the state has risen. Additionally, the overall unemployment rates in all the Australian rates were partly contributed by the global economic crisis (Financial crisis) of the year 2007-09.Additionally,the increased demand for labor in the northern Australian territories has contributed to the low unemployment rates in the states as contrasted with the Western Australian unemployment statistics for the year 2014 and 2015 .However as at January 2017,according to ABC news published on 23 January, the Northern territory unemployment rate has increased owing to the low consumption of commodities and services in the region. Despite the fact that all the states were affected by global events such as the financial crisis, the different states handled the recovery process differently due to the implemented demand and supply side policies implemented by the respective Australian states.

Cassells & Coelli 2017

Remarkably, the Australian government has made steps towards reducing the rising unemployment trends in the country. However, much needs to be done. Particularly, to reduce the alarming rate of youth unemployment, the Australian government can implement a national curriculum which is labor market oriented at the schooling level. Also, there should be creation of more fulltime jobs in the country so as to reduce underemployment among the youth and the male Australian population who are currently facing the challenge of unemployment (Smith 2017).Additionally, there should be implementation of mandatory vocational training for the currently employed persons so that they can be able to maintain their employment due to the relevancy of their skills. Remarkably, Britain has been able to effectively reduce its unemployment rate through the implementation of the work program which entails an early retirement package for the elderly working population and regular vocational training for the youthful population (Dolado 2015).This policy has been able to drastically reduce the British unemployment scourge. In addressing long –term unemployment in the Australian context, the government could implement proper working policies such as safe working conditions and anti-discriminatory workplace laws for the maturing and youthful population so as to reduce the respective unemployment rates. Usually, the aging population are discriminated against by virtue of age related complications such as speed.

Australian Government’s Efforts to Reduce Unemployment

Noteworthy, the Australian economic growth rate needs to grow fast and steadily so as to create more employment opportunities and promote private and public investment into the Australian economy (Borland 2017).Usually, economic growth increases the level of economic activity such as production of commodities and services which are the avenue for employment opportunities. The current Australian recessive economy is not supporting of more employment opportunities due to the high cost of production, low commodity  prices and slow wage growth which discourage the unemployed from actively seeking employment opportunities .In addition, it is imperative that the Australian government develop and advance job placement centers to reduce frictional unemployment which is due to the time transition from  one job to the other .Moreover, the implementation of vocational training and education curriculum based on the market trends might help boost up the employment chances of the currently employed to sharpen their work skills and to prepare the young for the labor market while in schools thus reducing the number of unemployment in the country(Biddle et.al 2016).Notably, the indigenous Australian population contributes to the highest portion of the unemployed persons in the country. This trend can be attributed to limited educational knowledge and discrimination at the workplace.

It is imperative that the Australian government implement anti-discriminatory laws against the indigenous population and the aging population to reduce the rate of unemployment. 

References

Amadeo, K. (2018).Underemployment with its business, effects and rate. The balance. [Online].Available at https://www.thebalance.com/underemployment-definition-causes-effects-rate-3305519[Accessed 4 June 2018] 

Biddle, N., Hunter. ,Yap, M & Gray, M.(2016).”Eight ways we can improve indigenous employment”. The conversation. [Online].June 5.Availale at https://theconversation.com/eight-ways-we-can-improve-indigenous-employment-60377[Accessed 4 June 2018]

Borland, J. (2014).”Unemployment is hitting youth hard: this is what we should do.” The conversation. [Online].Available at https://theconversat,ion.com/unemployment-is-hitting-youth-hard-this-is-what-we-should-do-27590[Accessed 4 June 2018]

Burgess, M. (2017).”Too much education, not enough skills causes unemployment”. News .Com .Au. [Online].Available at https://www.news.com.au/finance/work/too-much-education-not-enough-skills-causing-youth-unemployment/news-story/1de627be83c2f4bb369b619f44f3d900[Accessed 4 June 2018]

Cassells, R & Coelli, M. (2017).”Fact check: Does Western Australia have the highest unemployment in the country? “.The Conversation. [Online].March 9.Available at https://theconversation.com/factcheck-does-western-australia-have-the-highest-unemployment-in-the-country-74064[Accessed 4 June 2018]

Dolado, J. (2015).How can Europe reduce youth unemployment? We forum. [Online].Available at https://www.weforum.org/agenda/2015/02/can-europe-reduce-youth-unemployment/[Accessed 4 June 2018]

Economy watch. (2010).Australia Unemployment. Economy watch. [Online].Available at https://www.economywatch.com/unemployment/countries/australia.html[Accessed 4 June 2018]

Koukoulas, S. (2017).”Australia has given up on solving unemployment”. News daily. [Online].Available at https://thenewdaily.com.au/money/finance-news/2017/08/16/stephen-koukoulas-unemployment/[Accessed 4 June 2018]

Murphy. J. (2018).”Australia’s male employment rates are falling.”News.Com. Au. [Online].April 18.Available at https://www.news.com.au/finance/work/at-work/australias-male-employment-rates-are-falling/news-story/1433d1bdccf49d1e2b13a89dd1f199c5 [Accessed 4 June 2018]  

Rafi, R. (2017).The Impact of labour market regulation on the unemployment rate: Evidence from OECD economies. Department of industry innovation and science.[Online].Available at https://industry.gov.au/Office-of-the-Chief-Economist/Research-Papers/Documents/2017-Research-paper-3-The-impact-of-labour-market-regulation-on-the-unemployment-rate-Evidence-from-OECD-economies.pdf[Accessed  4 June  2018]

Reserve Bank of Australia. (2013).The increase in unemployment rate .Reserve bank of Australia. [Online].Available at https://www.rba.gov.au/publications/smp/2013/nov/box-.html [Accessed 4 June 2018]

Sloan, J. (2018).”Low wage growth based on solid economic reasons”. The Australian. [Online].February 9.Available athttps://www.theaustralian.com.au/news/inquirer/low-wage-growth-based-on-solid-economic-reasons/news-story/93c4d6c52267af16e1386e9df4cbeed9[Accessed 4 June 2018]

Smith, W. (2017).Unemployment policy in Australia.Percapita.Org. [Online].Available at https://percapita.org.au/wp-content/uploads/2017/05/Unemployment-Report_Final-1.pdf[Accessed 4 June 2018]