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What are the causes of unemployment
Effect of economic growth
What are the causes of unemployment
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In accordance with ‘Australia in the Global Economy’, economic growth is defined as a sustained increase in a country’s productive capacity over time. This is commonly measured by the percentage increase in real Gross Domestic Product (GDP). Economic growth is measured using one particular equation:
Real GDP (current year) - real GDP (previous year) x 100
Real GDP (previous year) 1
Economic Growth =
Up until the GFC, Australia had held a relatively stable level of economic growth hovering around 3.5%. Although not large growth, Australia was one of the rare economies (besides China) who had been through a period of consistent growth, with between 2%-5% growth between 1994-2007. This large level of consistent growth was largely afflicted to the increasing commodities prices, which had a huge impact on Australia’s exports as Australia is predominantly a exporter of mining materials particularly coal, iron ore and gold.
The Global Financial Crisis hit the Australian economy at a lesser intensity as to the rest of the world, largely due to government policy used to reduce the impact. Economic growth during the GFC slumped, with GDP growth falling from 3.7% in 2007/8 to 1% in 2008/2009. This slump in economic growth was linked to increasing unemployment rates, which will be spoken about further into the report.
The Global Financial Crisis forced the government to use the entire surplus and more that had been accrued during the Howard years, (which was recorded at $21 billion at the end of the 2007/8 financial year, and -$30 billion by the end of the 2008/9 financial year); however this use of funds was to great effect. Although many have been sceptical of how the government spent its stimulus package, (first injection ...
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...at which point Australia had an unemployment rate of 4.3%. Australia’s rate of unemployment has risen to 5.6% in late 2009, with prospects of higher rates of unemployment. This has required expansionary economic policies to raise aggregate demand levels and increase GDP growth.
There are a number of causes of unemployment in the economy. Some of these causes are:
• Level of economic growth
• Stance of macroeconomic policies
• Constraints on economic growth
• Rising participation rates
• Structural change
• Technological change
• Productivity
• Inadequate levels of training and investment
• Rapid increase in labour costs, and
• Inflexibility in the labour market
Works Cited
Australian Bureau of Statistics
http://www.abs.gov.au/ausstats/abs@.nsf/mf/6202.0
http://www.smh.com.au/opinion/politics/rudd-should-cash-in-on-the-economy-20100327-r3yr.html
There are three major types of unemployment which are structural, frictional, and cyclical. All three categories explain the many reasons why a person might be out of work in an economic system.
GMFC is hoping to open a new plant within the United States that would specialize in recreation vehicles. Management would like to open the factory of 500 employees as a nonunion plant but they are worried that the United Automobile Workers (UAW) and other unions will attempt to unionize. There are many benefits to keeping the plant union-free such as, higher profits, flexible policies to better serve employees, and higher productivity. This paper will look at specific recommendations GMFC can do to prevent unionization at the new plant and still be competitive in the industry.
The measure of growth is flawed, how countries see their growth is based on the consumption of their people. Many countries use the GDP (Gross Domestic Product) as an indicator for growth, as defined in It’s All Connected, “(GDP) is a calculation of the total monetary value of goods and services produced annually in a country” (Wheeler 11). The...
Changes in unemployment in Australia is a key issue in this news article. In the last twelve months, unemployment in Australia has dropped from 5.6 per cent to 5.1 per cent which is described as ‘a puzzle’ in the news article. Looking closer, there are some possible explanations for this change in statistics. Previously, unemployment in Australia increased in the time of the recent global economic downturn, although didn’t suffer as poorly as other countries according to data from the Organisation for Economic Co-Operation and Development. However, while unemployment rose, so too did the number of people in other forms of underemployment such as part-time and casual work (OECD, 2010). According to Sappey et. al., the status of employment requires workers to only work one hour per week and so therefore many underemployed workers receive the same employed status in this data as full-time workers (Sappey et. al., 2010, p. 111). According to the OECD, under-employment increased significantly during the downturn, rather than unemployment. Unemployment has dropped in the last twelve months but that does not mean that those who have obtained work have gained full-time employment. In fact, according to the Australia labour market trends of the last twelve months, it is more than likely that those who have become an ‘employed’ statistic rather than ‘unemployed’ have not gained full-time work. This news article quotes figures fro...
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Over the last 20 years, the Australian economy has picked up as a result of imported skill labour. Australia offers a wide range of safe and relatively fair job opportunities. Lastly, basic education in Australia is free and universities offer a wide range of courses to accustom for the student’s abilities and desires.
Throughout the years the U.S has had more budget deficits than it has had surpluses. This is due to the excess in spending and not enough revenues to pay for it. Many have debated over the U.S budget deficit problem. However to fix the problem one has to research the past to figure out how the U.S budget deficit got to where it is now. Hopefully by figuring out this, one could project what the U.S budget deficit will look like in years to come.
Australia has had one of the most outstanding economies of the world in recent years - competitive, open and vibrant. The nation’s high economic performance stems from effective economic management and ongoing structural reform. Australia has a competitive and dynamic private sector and a skilled, flexible workforce. It also has a comprehensive economic policy framework in place. The economy is globally competitive and remains an attractive destination for investment. Australia has a sound, stable and modern institutional structure that provides certainty to businesses. For long time, Australia is a stable democratic country with strong growth, low inflation and low interest rate.(Ning)
In time of economic crisis the government has a choice to cut spending or increase spending for public goods and services. “In 2009, Congress passed the American Recovery and Rein- vestment Act, which authorized $787 billion in spending to promote job growth and bolster economic activity”(Stratmann/Okolski 3). John Maynard Keynes, an economist of 20th century, suggest that the government should run a deficit if it will create jobs and increase capital gain. This theory support the current stimulus package that has been introduce during President Obama’s term. Although the flaw with this concept is that it makes the assumption the government has done studies and understands which areas needs the funding the most and knows where it will be beneficial, realistically that is not true. “Federal spending is less likely to stimulate growth when it cannot accurately target the projects where it will be most productive” (Stratmann/Okolski 2). This can be seen because political figures will spend money where it directly supports their needs as well. For instance, the political figure would rather spend money to things that will yield a p...
Unemployment is a macroeconomic factor that is pertinent to an extensive economy at a regional level. Therefore it affects a large population rather than a few select individuals. Unemployment does not only have social costs, but economic costs too. The ILO, International Labour organization, defines unemployment as, ''People of working age, who are without work, but available for work and actively seeking employment.'' Therefore implying that it is a state of an individual looking for a job but not having one. Unemployment is one of the key indicators in determining the economic stability of a country; hence governments, businesses and consumers closely monitor it. There are numerous aspects that might lead to unemployment such as labour market conflicts and recessions in the economy. There are two main types of unemployment, which can be focused on, seasonal and cyclical unemployment. Seasonal unemployment occurs when a person is unemployed or their profession is not in demand during a particular season. On the contrary, cyclical unemployment occurs when there is less demand for goods and services in the market so consequently supply needs to be decreased.
The effects of prolonged unemployment went from lowered health and living standards, to protests, and general anger at the current state of affairs. This high unemployment rate was brought on by the economic backwash caused by the Great Depression. The depression took the wind out of the sails of British commerce. It lowered the expectations of common people and made them question the system under which they lived.
People need money to purchase all kinds of goods and services they needed every day and sometimes, for goods or services they desire to own. To fulfill that, they have the essential need to earn money. In order to earn money, they must work in either in fields related to their interests or to their qualifications. However, people will meet different challenges during their jobs-hunting sessions, such as many candidates competing for a job vacancy; salaries offered are lower than expected salaries and economic crisis or down which causes unemployment. Unemployment is what we will be looking into in this report. Dwidedi (2010) stated that unemployment is defined as not much job vacancies are available to fulfill the amount of people who want to work and can work according to the current pay they can get for a job they chose to work as. There are four major types of unemployment: frictional, structural, cyclical and seasonal unemployment.
Economic growth is one of the most important fields in economics. In current generation economic is developing well. Economic growth is really important to country and for the world as well. Economic are one of the identity for country because it shows a country development and attraction for other countries (F, Peter. 2014). For example well economic develop such as Singapore, Dubai, New York, and Japan. These countries are well develop and maintaining their economic growths. Economic growths are really important because higher average incomes enables consumers to enjoy more goods and services. Then, lower unemployment with higher output and positive economic growth firms tend to utilize more workers creating more employment. Enhanced public
The most common causes of unemployment are getting fired and layed off for specific reasons. People might get layed off if a company is going out of business or maybe if there are positions in the company that are no longer needed. It’s difficult to find a job right away after being fired. Companies don’t want to hire someone who has just been fired for reasons such as failure to do a sufficient job, not showing up to work, stealing, etc. It’s also hard to find a job instantly after being layed off. In some cases the economy is down and it is hard to find any work in general.
Unemployment rates is the number of unemployed people divided by the number of people in the labor force. According to IndexMundi (2018), the unemployment rate of whole world in year 2017 is 7.9%, which was increased 0.6% compare with year 2016.