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The Unemployment Rate, Types, Issues, And Government Policy Of Australia Add in library

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Discuss the unemployment rate, types, issues, and government policy of Australia and comment unemployment in various states of Australia?




Unemployment Rate

Unemployment indicates the people those are without work and looking for work. Unemployment rate represents the percentage of the total labor force that is unemployed, but looking for work and actively searching employment. Moreover, the unemployment rate is calculated as a percentage through dividing the numbers of unemployed by the current total number of labor force. In recession time, a relatively high unemployment rate because of the low market demand and cost cutting strategy by the companies (Engbersen, Schuyt, Timmer & Waarden, 2006). The unemployment rate is fluctuated with the demand of the market and economy of the company.

Unemployment Types

Structural, frictional, seasonal and cyclical are the four types of unemployment these are describes in the below:

Structural unemployment: Structural unemployment is an unemployment that happens from the structural problems within an economy and absent the demand of the workers in the labor markets (Welch & Welch, 2009). Changes in the technology and changes in the taste or preferences of the customers are the main reasons behind the absence of the demand of workers in the labor markets.

Frictional unemployment: Frictional unemployment is the time period between an employee searches and transforms job to another. It comes from worker moving between carriers, locations and jobs. It happen if a worker changing carrier due to changing interest, moving to a new city, and changing the firm (Maier & Nelson, 2014).

Seasonal unemployment: Seasonal unemployment is happened due to the changes in the season such as a lack of demand for department stores in January. Seasonal unemployment is an part of structural unemployment as the economy of the country changes from each month that impact on the demand of labor markets (Welch & Welch, 2009).

Cyclical unemployment: Cyclical unemployment is happened if there is not enough aggregate demand in the country economy to provide work for everyone those able and wants to do work.  Opposite direction of the GDP growth rate or recession is the main cause of the cyclical unemployment (Engbersen, Schuyt, Timmer & Waarden, 2006). During recession or economic downturn, demand of all types of goods decline and less production is needed that declined the demand of workers in the market.



Unemployment Issue

Long-term unemployment generates social and economic problems of the country. Unemployment indicates the family income is low that means the people consumption of money is low, which impacts on the economy condition of the country. Low consumption rate of the people indicates the people low willing to purchase products and services that means demand of the goods is low (Welch & Welch, 2009). Low demand and low consumption rate impacts on the economic growth rate or economic position of the country.

Moreover, low family income and low demand of goods impacts on the government taxes collection that means government has not sufficient funds to spend on social welfare and infrastructure. This kind of the condition generates social problem of the country.  Long-term unemployment impacts on the living standard and life style of the resident that cause social and economic problem of the country (Maier & Nelson, 2014). Long-term unemployment is related to the poor physical and mental health of the people, social isolation and high poverty that indicates the weak economic and social condition of the country.

Government Policy of Australia for Unemployment

Each country is developed policy to maintain employment and reduce unemployment rate to maintain its economic and social condition. The Australia faced high unemployment during the great depression (1929–32) as its unemployment rate was 22% in mid-1930, and reached at peak of 32% in mid-1932 (Australian Government, 2015). So, the government made policy to control the unemployment rate as it created Australia's monetary policy and deflationary policy to control employment or to maintain its economic growth.

In addition, each state and territory such as ACT, NSW, WA, Tasmania, Qld or SA applied different strategies or policies related to unemployment. Some states and territories such as ACT, NSW, Western Australia and Northern Territory (around $722) used low minimum wages policy to enhance employment. These states and territories could be decided low minimum wages, so that employers able to recruit more employees that result decline in unemployment rate (Australian Government, 2015). In addition, Victoria ($681), Queensland ($702), South Australia ($637) and Tasmania ($622) states sets the minimum wages generally lower than the current minimum wage of $1,244.40 per fortnight to decline unemployment rate.

Moreover, high unemployment states and territories are providing the unemployment benefits (Newstart Allowance) of the people those are unemployed for longer than 12 months to continue and aged over 22 for encouraging them of obtaining employment (Australian Government, 2015). At the same time, Newstart Allowance was $501.00 per fortnight for single people (as at January 2014) and Youth Allowance provided by most of the states and territories such as NSW, WA, ACT and the Northern Territory, Victoria, Queensland, SA and Tasmania for encouraging unemployed of obtaining employment.




Australian Government. (2015). The Great Depression. Retrieved from:

Australian Government. (2015). Unemployment benefits and the minimum wage. Retrieved from:

Engbersen, G., Schuyt, K., Timmer, J. & Waarden, F. (2006). Cultures of Unemployment: A Comparative Look at Long-Term Unemployment and Urban Poverty. USA: Amsterdam University Press.

Maier, M.H. & Nelson, J. (2014). Introducing Economics: A Critical Guide for Teaching: A Critical Guide for Teaching. UK: Routledge.
Welch, P.J. & Welch, G.F. (2009). Economics: Theory and Practice (9th ed.). USA: John Wiley & Sons.

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