Unemployment - Australia

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Unemployment refers to those people who are willing and able to work, actively seeking work but is unable to find suitable employment. In Australia unemployment is measured by a monthly telephone survey of the labour force conducted by the Australian Bureau of Statistics (ABS). These unemployment statistics reflect the number of people who are not working but actively seeking it. To be classified as actively seeking work the following criteria must be followed: regularly checking ads from different sources of available jobs; being willing to respond to job ads, apply for jobs with employers and attend interviews; registering with an Unemployment agency that belongs to the Job Network. The size of the labour force in 2008-09 was 11,425,300 persons, where 662,900 were classified as unemployed. The unemployment rate was therefore 5.8%.

There are seven types of unemployment. Frictional unemployment is a result from people moving between jobs or experiencing changing economic circumstances; Seasonal unemployment is categorised as specific industries or occupations that are characterised by seasonal work, possibly leading to unemployment; Structural unemployment results from a mismatch of labour skills of employees with the job vacancies; Cyclical unemployment is caused by contractions in economic activity or aggregate demand; Long-term unemployment refers to people who are unemployed for over 12months; Regional unemployment occurs when one or two major industries (e.g. TFC, PMV) in a particular geographical region reduces demand for labour, resulting in widespread unemployment; Hidden or disguised unemployment refers to those who are not included in official unemployment statistics as they have given up looking for work or are recipients of income support from a spouse.

The unemployment rate is calculated as a percentage of the labour force, which include all those persons employed (full time plus part-time), plus all unemployed persons as seen below:]

| | |Total number unemployed 100 | |Unemployment rate = Labour force (employed + unemployed) x 1 |

In recent years, Australia has traditionally experienced low unemployment averaging __________________. Unemployment levels were high in the 1970’s due to stagflation (high levels of inflation and unemployment due to low economic growth) to over 6%. By the 1980’s unemployment reached 8%, and during the 1990’s recession, it reached 11%. This rate has fallen slowly, and in 1998-9 it fell to 7.4%. From 1999-2008 unemployment averaged 3% per annum due to higher rates of sustainable economic growth and structural reforms in the labour market. An important trend in unemployment in Australia is the high incidence of long-term unemployment and the increasing duration of unemployment. In 1993-94 the level of long-term unemployment peaked at 34.6% of the total employed, with the average duration being 57.3 weeks. A major reason for this is accounted by the loss of jobs at 30% total. Unemployment data from 2000-09 further reveal that that younger people (15-19 years) experience more difficulty in securing employment due to lack of skills, training and experience. The distribution of unemployment between states has changed from 2006-08 as the labour market reached full employment. In 2008-9, the global financial crisis has led to rising levels of unemployment in all states. Within the second half of 2008, Australia experienced negative employment growth, falling by -0.4%. In July 2009 the unemployment rate increased from 4.3% in 2008 to 5.8%.

A major cause of unemployment is a deficiency in aggregate demand (AD=C+I+G+(X-M)). Cyclical changes in domestic or...
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