Three Essays On Unemployment In Australia

Resource Description

Discuss the causes of unemployment in Australia and the policies that can be used to reduce the level of unemployment. 

Unemployment refers to the working-age population of an economy, generally between the ages of 15 to 64 actively seeking work, but due to certain circumstances are unable to find it. As a result, the labour resources in an economy are not utilised to their full capacity. Unemployment is a relatively stable economic issue with Australia’s unemployment rate sitting at 6.6% and participation rate hovering around 66.1% as of March 2020, compared to an unemployment rate of 10% and participation rate of 51% for most other OECD countries. The Australian Government aims to tackle unemployment in Australia by using various macroeconomic and microeconomic policies to reform the issues that it presents and ultimately minimise the long-term and short-term economic and social effects that this may have on the Australian economy.

Some of the major causes of unemployment in Australia is cyclical unemployment, which occurs due to a downturn in economic activity within a specific economy. As economic activity decreases, the level of aggregate demand decreases which has a deep effect on the level of employment required. The COVID-19 pandemic led to a steep increase in unemployment levels as the government had to impose lockdowns to reduce the spread of the virus, which led to many individuals losing their jobs as many states went into lockdown. Another cause of unemployment is structural unemployment, which occurs as skills become obsolete due to changes in the level of skills required or due to changes in technology which improves the factors of production. An example of structural unemployment was the loss of manufacturing jobs during the mid-2010s, whereby many individuals who worked in manufacturing jobs, were made redundant as their skills were obsolete.