Essay about A Brief Note On Unemployment And Its Effect On The Economy
Unemployment refers to the situation whereby individuals want to work however are unable to secure employment, therefore resulting in the underutilization of an economy’s labour supplies.
Unemployment is measured monthly and is calculated by:
Labour force participation rate refers to the percentage of the population aged 15 and over in the labour force that is employed or unemployed and is calculated by:
Current statistics and Trends
Australia began experiencing high rates of unemployment in the 1970’s due to stagflation, causing the rate to increase from the 2% levels in the 1960’s to over 6% by the end of the 70’s. Shortly after the recession of the early 90’s the rate reached a peak of around 11% due to falling aggregate demand that saw cutbacks in production and closure of many firms. 18 years of sustained growth meant that unemployment dropped to its lowest in 30 years by the end of 2008 – around 4%. Yet due to the global economic recession, unemployment reached a peak of 5.8%. All factors that have lead to a decline in economic growth are also responsible for the rise in unemployment. Between 2009 and 2012 the situation improved, dropping from 5.8% down to around 5% however crept back up to 5.5%, this decrease was as a result of the rising TOT due to the resources boom and growth in China. Recently, the unemployment rate has risen in Australia to 6.2% as of April of 2015, previously from 6.1% March. (REASON – slowdown in china,…