Unit 3 - Unemployment and Employment Flashcards
Unemployment
Unemployment is a situation where people who are willing and able to work are unable to find employment
Measuring Unemployment
The Australian Bureau of Statistics uses Labor Force Surveys to measure the unemployment rate. The Labour Force Survey is selected from around the country.
Employed
a person is classified as employed if they work more than one hour per week; and receive an income or profit (i.e not volunteer work); if they work in a family business; or if they have a job but cannot work due to illness, strikes or holidays during the survey week
Unemployed
a person who does not have a paid job who is actively looking for work (completing job applications, registered with Centrelink) in the week prior to the survey.
Non-Labour force
The Non-Labour force is made up of all those people who are over the age of 15, who are not working or not seeking work. For example students, retired people, some disabled people, volunteer workers and those who chose not to work such as parents who stay at home to raise children.
Limitations of the unemployment rate
- Unemployment rate ignores hidden unemployment
- Unemployment rate ignores underemployment
- Misleading survey answers
Cyclical Unemployment
Cyclical unemployment occurs when economic spending falls, leading to reduced spending, production, and labor demand. Persistent pessimism can cause a recession, characterised by two consecutive negative economic growth quarters.
Structural Unemployment
Structural unemployment arises from changes in production methods, technology, outsourcing, and higher wages, leading to a mismatch of skills and jobs, job losses, and increased unemployment due to technological advancements and business closures.
Seasonal Unemployment
Seasonal unemployment results from the termination of jobs at the same time each year due to the regular change in seasons.
Common examples of these types of jobs include - fruit picking, tourism, working for holiday operators, sheep shearing and working in the ski fields.
Frictional Unemployment
Frictional unemployment occurs when people are unemployed between finishing one job and starting another. This is common in the building trades and in some areas of rural industry.
Long Term Unemployment
Long term unemployment refers to those people who have been unemployed for 52 consecutive weeks or longer - i.e 1 year or more
Youth Unemployment
Around the world, young people (between 15 and 24 years of age) are more likely to be unemployed compared to the rest of the labour force. In Australia they are 2-2.5 times more likely to be unemployed compared with adults.
Living Standards
Living standards refer to how well off or prosperous individual and the nation are overall. It includes both material well being and non material well being.
Material Well Being
Material well being refers to the enjoyment received from access to goods and services. As output is increased, there are more goods and services available and therefore material living standards increase.
Non Material Well being
Non material well being encompasses the quality of life beyond material possessions, encompassing human relationships, environmental conditions, crime rates, leisure time, education, and health.
Effects of unemployment on individuals:
-Reduced income
-Family unhappiness
-Lower self image
-Less healthy
Reduced income
unemployment benefits are generally lower than income and sometimes lifestyle changes need to occur because of this. Material living standards fall.
Family unhappiness
family tension, stress and
violence can be increased when someone in the home
is unemployed. Non-material living standards fall.
Lower self image
feelings of personal failure because
of loss of status and sometimes friends. Non-material living standards fall.
Less healthy
sometimes there can be higher incidence of health problems (nervous disorders, heart disease). Non-material living standards fall.
Effects of unemployment on society
Increased crime, vandalism, social unrest, unemployment, and family breakdown lead to lower material living standards, lower GDP, and a decrease in the production of goods and services.
Effects of unemployment on government
The government faces a deficit due to reduced income tax revenue and increased unemployment benefits, resulting in higher outlays for health, law, order, labor market training, and job creation schemes, potentially leading to increased national debt.
