Causes Of Unemployment In Australia - 1149 Words

Analyse the causes of unemployment, its effects on the Australian economy and how they are addressed through use of macroeconomic policies. Unemployment refers to when an individual is actively seeking work and is aged 15 years or over, but is unable to find work (not hired). There are many causes and effects of unemployment that result in different actions being made by the Australian government through their use of both monetary policy as well as fiscal policy. The unemployment rate is calculated by measuring the number of unemployed over the total labour force (anyone 15 years or older who currently has a job or is actively seeking) [x100]. While the government does not aim for 0% unemployment as this has negative consequences, it is†¦show more content†¦E.g. Cyclone Debbie, which tore down many banana plantations in Queensland, rendering those farmers who worked there and were unable to work after the cyclone were/are seasonally unemployed as the environmental conditions do not suit their needs. An increase or decrease in the unemployment rate can have a multiple effects on the Australian economy, both beneficial as well detrimental to the economic conditions and the societal outlook. An increase in the unemployment rate means that more individuals do not have an income, thus meaning many households suffer reduced disposable funds. This causes a decrease in the level of aggregate demand within the economy and therefore reduces economic growth. This in turn causes a slower circular flow of income, meaning that households may be forced into or past poverty, as a result of the lowered income generated, reducing the living standards and quality of life. The downturn experienced by the economy can also offset many individuals seeing them not wanting to return back to the workforce due to the lack of jobs available, making them long-term unemployed rather than cyclically unemployed, or if the firm initially was promoting structural change, structurally unemployed. Combined with poverty, the aspect of unemployment can lead to other severe mental health issues and illness reaching extremes. To combat highShow MoreRelatedUnemployment Of The Australian Economy1077 Words   |  5 PagesIn the Australian economy, trending unemployment rates are a prevailing socio-economic issue. With the labour market central to unemployment and the distribution of jobs, many factors arise as the key influences on unemployment. With an incredible number of industries facing high demand by consumers, it is speculated that employment would feature an increase to compensate. 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