Topic One- Economic Issues
Full employment has been a major goal of the Australian government. During the 92’ recession unemployment reached 11.2% and in 14 years it has fallen to 5% and in 2006 to just below 5%.
Unemployment is a cost to the community as:
* Opportunity cost of lost production.
* Social costs. E.g. family breakdowns, crime and income inequality.
* Welfare payments increase.
* Loss of taxation revenue.
Measuring the level of unemployment :
The labour force can be defined as the section of the population 15 years and above who are either working or actively seeking work.
Total Labour Force = Employed + Unemployed
Australia’s current labour force is about 10.5million, 67% full time, 27% part time and 5% unemployed. The size of the labour force is influenced by:
* Size of the population
* Age distribution of the population
* Participation rate
Labour Force Participation Rate:
The labour force participation rate can be defined as the percentage of the working age population (15 year +) who are in the labour force (employed and unemployed actively seeking work).
Labour Force Participation Rate (%) = Labour Force x 100
Working age pop. 1
This rate reflects the number of people who are out of work but are actively seeking work. Actively seeking work involves:
* Regularly checking job advertisements
* Applying for jobs and attending interviews
* Registering with an employment agency
Unemployment Rate (%) = Number of Unemployed x 100
Total labour force 1
Problems with current methods used to measure unemployment:
* Underemployed workers are seen as being fully employed
* No measurement of overwork.
* Switch from full to part time work would not alter the unemployment rate....