“Unemployment rate rose to 5.9% in February”

This article on Australia’s unemployment rate illustrates how the decline in jobs and insufficient hours given to labourers impacts our unemployment rate. Although one month’s rate reading is not generally something to be worried about, it does cause some concerns as 5.9% is the highest reading for 13 months. This is surprising even for analysts considering the rise in full time jobs.

In February, it was recorded that over 6000 jobs were lost which came as a surprise considering the 16,000 new jobs that were created. The leading causes to the job losses were because; the hours given to workers were too short, and the general shift from part time employment to full time employment. Many people are not able to take up full time work due to household commitments and the shift from part time to full time employment can be an issue for those people. Others may be causal workers that need a few more hours of work a week but cannot get them and are forced to leave their jobs to find another that accommodate them with more hours.

One month’s unemployment rate reading should not really be much of a concern but because this shows a record high in 13 months, which surpassed the analyst’s predictions of 5.7%, it does become a cause for concern. Opposition leader, Bill Shorten, demonstrated his fury on these readings by stating that it is “disturbing news… we are at 1.8 million-plus of our fellow Australians who either can find no work or insufficient work”. Prime Minister Turnbull was more optimistic about the unemployment figures by suggesting that the general trend in the Australian economy over the past few months reflects a “resilient” Australia.

Overall, I don’t think that these figures are to be worried about unless is progresses and shows a similar trend over the next few months.

How is this likely to affect households?

A rise in unemployment will generally cause a lower level of material and non-material living standards. Households that lack steady incomes will not be able to purchase goods or services that would increase their material standard of living which can create dissatisfaction with their lives and perhaps even mental health issues. Also, the stress and pressure of not having a steady income can lead to decreased non-material living standards. One of the economies main goals is to establish higher levels of living standards and with out jobs, that goal cannot be achieved.

Questions for you

How do you think Australia’s unemployment rate will hold up? What can be done to lift the employment rate?

Advertisements

23 Comments

  1. Australia can increase its employment rate by using more Australian labour resources. Australian companies outsource jobs to other countries in order to achieve productive efficiency (by minimising costs) however this leads to Australians losing their jobs.

    Liked by 1 person

    1. Businesses offshore their production because they can’t afford to hire Australian workers and still make a profit. With grumblings about wage growth, labour in Australia is likely to become even more expensive in the future. How can we create jobs that businesses can’t afford to pay wages for?

      Liked by 1 person

      1. Our high standard of living makes it virtually impossible to maintain relatively unskilled manufacturing jobs in Australia, the reason labour is outsourced to other countries is that companies do not have to pay their workers a living wage, or what we would consider a living wage. The only real solution is to put pressure on companies to employ workers at a fair wage in good working conditions, which will reduce the relative profitability of overseas manufacturing and encourage manufacturing to remain in Australia

        Liked by 1 person

      1. If Australians compromised and took a paycut, then there would be plenty of incentive to employ them as it is easier to work with people locally than outsource. Current Australian wages make it far more beneficial to send jobs overseas

        Liked by 1 person

    2. But maybe the unemployment rate will slowly decrease? The cut on penalty rates could get businesses to employ more. This is because minimum wage + penalty rates creates a price floor, so, theoretically, if the wage is higher than the equilibrium wage, there is a surplus which equals unemployment. The penalty cut would decrease the price floor and the labour demanded starts to become closer to the labour supplied. Though realistically this may not always happen 😦

      Liked by 1 person

  2. Jobs get exported overseas because there isn’t an incentive for businesses to keep them here, of course subsidies can change this, however the sheer cost of the government providing subsidies for companies to keep jobs in Australia would be detrimental to the economy and budget, and most definitely unsustainable, as long as Australia can get through this transition period between different industries that work e are in right now, we should be ok

    Liked by 1 person

    1. I completely agree with your view on subsidies as a method of resolving this unemployment rate despite its economical burden on the nation. Although, perhaps a strategic provision of subsidies to business creating organisations (entrepreneurial organisations) may give a greater impact on the unemployment rate by creating a snowball effect in aiding individuals create more jobs for Australia.

      Liked by 1 person

      1. You’re right that subsidies need to be used carefully and in areas which create ongoing jobs in the future. ‘Stimulus packages’ which are basically subsidies used to get an economy out of a recessionary period, often have only short-term effects, and once the payment has been used up, the economy slumps again. What areas should they be put towards to ensure a follow-on effect of ongoing jobs and growth rather than a temporary fix?

        Like

  3. I think one way to lower Australian unemployment levels would be to lower levels of 457 visas (visa that allows foreigners to legally work in Australia), and to have Australian jobs for Australian citizens. I think that Trump may be doing something similar in America, so we will have to wait and see how that goes.

    Liked by 1 person

    1. I think for some niche industries 457 visas are critical but choosing foreign labour over our own will definitely drive unemployment upwards, something in which australia does not want to have

      Liked by 1 person

      1. Also, if 457 Visas are awarded carefully, to skilled and motivated workers for example, the additional production and consumption they add to the economy may outweigh the negative impacts on unemployment. Often these people will perform work that many Australians do not want to do, such as fruit picking or low-paid hospitality jobs.

        Like

    2. This would likely have some negative side effects, for instance, a neurosurgeon that wanted to work in Australia might be unable to do so. It might be wiser to limit the number of visas based on the area of work, with jobs requiring a lower level of education being limited more.

      Like

  4. Subsidies for failing for failing industries are only a temporary fix and will not insure that the workers get to keep their jobs in the future, its an inefficient use of the governments resources. Instead the government should look to improves AD so that the economy as a whole grows and unemployment will then decrease. Interest rates are already at a low which helps simulate the economy but it might be necessary to do more like educate and train more workers in different industries that are succeeding and that were efficient at producing. Or cutting taxes to increase disposable income and boost AD which would lead to lower unemployment.

    Liked by 1 person

  5. Is the shift to full-time employment negatively or positively effecting the unemployment rate as it sounds like one of the key aspects of the current rate is due to people not being able to work certain hours?

    Liked by 1 person

  6. It could be suggested that cut in penalty rates could lead a increase in employment rates. However, due to the fact that the employees would receive less salaries, employees might be less willing to work on the weekends, therefore the unemployment rates declines.

    Liked by 1 person

  7. Unless the government provides jobs, I see it unlikely that unemployment would steadily decrease due companies outsourcing jobs to other countries as labour is cheaper there and Australiaian labour if considerably expensive.

    Liked by 1 person

    1. Also, changing technologies are making many jobs obsolete. Farm workers, bank tellers, accountants and data entry positions are all filled by robots and capital resources now, instead of labour. Where will new jobs come from if we are moving to a very capital-intensive economy?

      Like

  8. Can receive more migrations come to Australia. Because some migrations have ability to create the businesses in Australia which means it can create more jobs and likely decrease the unemployment rate.

    Liked by 1 person

  9. This seems to relate to the article my group looked at the other day in class on stay at home mums not working because the high cost of childcare means that it’s more cost effective for them to stay at home and look after their children themselves. This also results in a lot of them not being able to work full time hours, so with the shift of job demands from part time to full time many who can only work part time will be left unemployed.

    Liked by 1 person

    1. If those mums were able to re-enter the workforce, would that drive unemployment up? At the moment they are either not in the labour force or underemployed. Perhaps this is not a shock the economy could take?

      Liked by 1 person

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s