Structural Unemployment In Australia

Unemployment refers to a situation where individuals want to work but are unable to find a job, and as a result labour resources in an economy are not utilised. In 2016, the unemployment within the Australian labour force in March was 5.6%, however it has slightly increased a year later to 5.8%. There are various factors that have contributed to this decrease in the unemployment rate, including cyclically weak demand for labour resulting in employment growing more slowly compared to labour supply. As well as structural influences that affect the efficiency with which unemployed workers are matched to vacant jobs. Therefore, the unemployment trends will affect individuals, firms, government and the Australian economy.

Australia’s trend

An increase of the level of structural unemployment would occur when there is a restructuring of the economy from old industries to emerging industries. Those who have been unemployed for a long period of time or laid off in the declining old industries would find it difficult to join the workforce as their skill may not be appropriate in the modern industries, where it may be different. Structural unemployment occurs for several reasons such as: changes in technology, were workers are fired due to the lack of knowledge operating the technology or not being able to adapt and changes in tastes, if a product keep decreasing in demand, then eventually the company which produces the product will go bankrupt and workers will be unemployed. An example of a cause of structural unemployment is the technological advances in the construction industry. This is where jobs on a production line is being replaced by machineries such as motor manufacturing. Since mid 2011, people unemployed for reasons that relates to structural unemployment and those who had no work experience have made contribution to the increase in

Amongst all the state and territories of Australia, according to the ABS, South Australia has the highest unemployment level of 6.6%. South Australia past employment rate was fairly steady and had been one of the lowest unemployment levels in Australia. However, with developments overtime there has been drastic changes. This is due to the slow-down of the automotive industry, which is expected to be shut down by the end of the year. The supply chain within this industry, have seen job being reduced. Not only that the projects such as the naval defence ship building the timing of transition of these contracts are unfavourable for the employment rate and therefore experiences weaker economic growth. Queensland has a rate of 6.4% and also had the biggest loss of jobs, with more than 13,000 positions reduced. The unemployment rate is increasing due to Queenslanders giving up looking for work. Hence the unemployment rate both rose in trend and seasonally, as the slowdown in the resource sector continued reduce, along the change in season. Tasmania, however has experienced a reduction in the unemployment rate compared to the other states/territories. The ABS figures put Tasmania’s unemployment rate at 5.9% (February 2017)- the lowest since October 2011. The Northern Territory remained the best performing state, with unemployment of 3.5%, hence also having the highest employment participation rate with 11,000