Answer

Unemployment in Australia in the Last Five Years

Unemployment is a world-wide problem that many governments continue to grapple with.  Even though, some countries such as U.S. have managed to reduce the number of unemployed people, it is still a challenge. Australia is not left out in this unemployment quagmire.  This paper focuses on unemployment in Australia focusing on the last five years addressing different aspects including, causes, the trend and patterns, long term unemployment, and measures to manage.

Unemployment

Different bodies and institutions define unemployment differently.  However the widely agreed upon definition of unemployment by the Bureau of Labour Statistics is the number of people that have no job, having in the past four weeks searched a job to no avail (Australian Bureau of Statistics, 2017). Such individual must be currently available or free to take up a job if an opportunity crops up. Hence, unemployment is a macroeconomic challenge that requires the government to address. If the number of people in a given country lacks jobs, it affects the economy at a macro level.

Unemployment in Australia

Every year, Australian markets release millions of job seekers in the job market. Most of the job seekers or the unemployed youth have hopes, but these hopes are thatched once they are released in the job market. They realise that the situation is not the same or as they thought.  In Australia, youth unemployment has continuously taken a hit on latest Global Financial Crisis reports. According to Carvalho (2015), in Australia an estimate of 300000 youths have no jobs which accounts to more than a third of the total population that is unemployed.

In Australia more youths are unemployed compared to adults (Carvalho, 2015).  Most of these youths who form larger jobseekers have low skills level, are inexperienced and this makes it difficult for them to get employed. Furthermore, these young people usually get access to less secured forms of employment contracts (Carvalho, 2015). It is estimated that two thirds of working young people are casual labourers compared to less than one fifth of workers in other age brackets.

In the past five years, unemployment rates in Australia have not receded but rather are on an upward trend. This scenario has been so since 2008 and is likely to persist if economic situation will not improve for the better (Carvalho, 2015). 

On global scene, around 75 million young people are currently unemployed and seek for an employment opportunity. This number averages or constitutes 40 percent of the total number of unemployed in the world (Carvalho, 2015). . In a classification of the 34 most wealth nations, of which Australia is among them OECD notes that unemployed youths reduced by more than 7.5 million implying that unemployment is a global issue (Carvalho, 2015). 

According to TradingEconomics (2017), the adjusted unemployment rate of Australia appears to be on a constant spree standing at 5.6 per cent in August this year. This was similar in the previous months and it matches the market estimates. The report states that around 54,200 jobs were added with the number of those without jobs reducing by an average of 1,100 (Carvalho, 2015).  According to Focus Economics (2017), in 2017, unemployment rate has been at 5.6 percent and it is forecast that in 2018, this rate is expected to be at 5.5 percent.

From the chart below, it is   clear that unemployment rates have remained stagnant oscillating between 5.2 and 6.1 percent between 2012 to 2016.  Variations in the unemployment rates have small margins.  This demonstrates that, quite a number of youths are still lacking jobs.

Organization for Economic Co-operation and Development (OECD) (2017) reports that the unemployment rates in Australia, which currently stands at 5.8 per cent, is slightly below its average estimates of 6.1 percent.  The employment rate in Australia stabilised in 2016 after a slight decline for a number of years. OECD forecasts a drop in unemployment rate in 2018 to 5.3 per cent (OECD, 2017).

The unemployment rates in Australia were limited and highly hit by the global financial crises, but commencing 2011, to 2015 it began to decline slowly and is expected to remain at or above 4 per cent in 2018 (OECD, 2017). Furthermore, the resilient in the growth rate of employment and unemployment is a clear indication that the labour market is still resilient.

In 2015, around 9 per cent of people employed worked under involuntarily part time terms. Their working hours were reduced while other failed to secure fulltime employment (OECD, 2017). This, therefore, compared to other nations such as Spain and Italy was the highest share, raising concerns in that particular area.

Unemployment Trends and Pattern in States

Some states recorded increase while others recorded a decrease. For instance, Tasmania recorded a decrease with 0.2 percent points, while Northern Territory and Western Australia recorded a decrease with 0.1 percentage points (Australian Bureau of Statistics, 2017).  Queensland and New South Wales recorded an increase of 0.1 percentage points while the rest of the states including Australian Capital Territory experienced movement of less than 0.1. by February 2017 (Australian Bureau of Statistics, 2017). This is based on seasonally adjusted estimates on the trends in the level of unemployment. The statistics indicates that indeed, these states faces or have people eligible to work but without work.

According to the figure above, the trend as of February 2017 to January 2017 shows some level of stability in terms of unemployment rates. The number unemployed people has tended toincrease progressively over the months even though with less percentage points. The aspects on population  increase over the months can explain this persistent growth (Australian Bureau of Statistics, 2017). For instance, in January 2017 unemployed persons were 733 comapared to February 2017 which was at 738 both representing 5.8 percent (Australian Bureau of Statistics, 2017). Similarly, the seasonally adjusted statistics exemplify similar characteristics concerning the  unemployment  levels in Australia. This information provides some insights to the level of unemploymet ,which may not be dire compared to other countries across the world.

According to Janda (2017), in July 2016, an estimate of 28000 new jobs was created. This means that the unemployment rate came down.  The trend has remained stable at 5.6 percent in the month of August.  Full time and part time job equations in Australia are also marred with controversies. In certain seasons or periods, unemployment may decrease or decrease in part time as well as full time positions. In the month of July for instance, most jobs created was in the category of part time. The same month experienced full time positions averagely 20300 get lost (Janda, 2017).

The economic environment in Australia affects the trends and pattern even though with limited differences. The market is stable and that is the reason the trends and patterns from the past months has remained stable.  The level of inflation, economic growth, productivity seems to be at a certain point. The trend as well can be explained by the continued effort by the Federal government to develop laws and regulations that are attractive to the investors. This has contributed significantly to the stability in the labour sector.

Long Term Unemployment

The concept of long-term unemployment in the Australian context refers to unemployment situation where an individual stays out of employment for 12 or more months. This kind of unemployment is troubling and worrying to many as it affects people psychologically, especially due to financial deprivation. Stress and anxiety may creep in the live of individuals because of lack of gainful employment triggering other antisocial behaviours such as anger and violent (Mitchell, Muysken & Welters, 2013). This situation may also trigger other people to begin engaging in criminal acts to fend for themselves and their families, increasing insecurity.  In other circumstance, long-term unemployment is likely to propel individuals to take job offers that they could not have wished to take. This affects their morale, motivation and the level of productivity. Low productivity at an industry sector may translate into economic failures affecting the general society living standards.

Causes of Unemployment in Australia

It is worth noting that causes of unemployment across countries even though may vary to some extent they are usually similar. In Australia, these causes may have some variations from one state to another but the common causes are herein discussed (Sebastian, 2015). One of the causes is industry shut down that renders thousand of the workers and the potential employees jobless. For instance, in States such as South Australia, industry diversity is not sufficient to absorb thousands of new job seekers. Examples of these industries include textile, agriculture and automobile manufacturing.

Federal and State government, to some level have failed to plan so that the workforce is aware of such eventualities to be always prepared for an alternative (Sebastian, 2015). Planning here will entail forecasting what the future looks like and allowing people to acquire relevant skills and trainings. The education that is provided should be relevant and appropriate to add value to the knowledge base of the workers.  Furthermore, young people and those ready to work should also consider starting other ventures for their own upkeep. This therefore, entails people being creative and innovative.

Off shoring has also contributed to unemployment in Australia (Sebastian, 2015). This has been brought by countries offering tax incentives to employees orchestrating the movement of workers. This has also seen some of the factories relocated to other countries that appear to be providing friendly environment for business. This therefore leaves a gap that contributes to unemployment rates.

Recessions have had negative impacts in the Australia unemployment challenges in the previous years (Sebastian, 2015). However, in the last five years, the country unemployment rate has continued to decrease an indication of a better future. Recession normally stalls economic growth of a country forcing industries to lay off some employees to stay afloat. This therefore, causes increased level of unemployment. Immigration is also putting pressure on the available jobs opportunities for the locals. This is more witnessed in the mining sector as foreigners take some of the jobs that could be taken by the Australians (Sebastian, 2015). 

Advancing technological and automation can in equal measures create jobs and lead to job loss. In these modern days, the world has become tech savvy and it has become important for people to remain abreast with these changes (Sebastian, 2015). Job loss comes in when the technology in place requires people with skills to operate them, and unfortunately the people lack such skills. On the other hand, technology can create more job opportunities to individuals if they appreciate and have skills to operate them. In Australia, most school leavers lack these technological skills hence they are rendered unemployable.

Managing unemployment

According to Caddy &Mortimer (2012), the problem of unemployment in Australia can be addressed through initiating major policy initiatives. One of the initiatives is that which assumes that unemployment is predominantly economic challenge. It means that lack or poor economic management is the precursor to increased or high number of individuals without gainful employment. This therefore, goes back to the government which seems to have failed in its management of economy initiatives. The government can through its fiscal policy through adjusting expenditure spending and regulating taxes bolster economic growth.  Youth people will be in a position to secure employment if the economy is vibrant and provides and opportunities to invest.

Similarly, Okun’s law posits that when there are positive changes in output growth tends to reduce levels of unemployment (Sebastian, 2015). OECD established that even with 1 percent changes in the GDP growth has the potential of causing changes of 1.4 percentages points when it comes to unemployment among youths. Second policy proposed to mitigate unemployment is Australia is that which treats unemployment as a frictional but not as a structural problem. This argues that there is a tendency for people to lack jobs or become jobless during periods when entities undergo a structural adjustments or downsizing.  This theory therefore, proposes that during such instances people should take time and invest in training to equip them so that when the opportunity arises they can have a chance to secure a job. This initiative however, may not be viable and practical because, people may have training, skills, and required knowledge but they may lack somewhere to work. The absence of an opportunity to work does not mean that people lack the capabilities and expected skills and knowledge to take on certain jobs. Therefore, this policy initiative may not be appropriate in most of the situations in Australia.

Furthermore, OECD in its 2015 outlook report proposed the need to vary minimal wages for different regions to reflect the various different economic conditions.  This has been an on-going debate in Australia and in the 2014 report; there were recommendations from the national commission of audit NCA that the states set a minimum wage to reflect the labour market situations and the cost of living of the people. Adopting regional minimal wages across these different states will help or give job seekers a higher chance of securing a fair chance to get unemployment opportunity.

In Australia, there is need to come up with more innovative ways that will ensure that tertiary institutions are accountable and are able to churn out graduates that hold requisite skills and knowledge that matches the job market (Sebastian, 2015). The mismatch of the skills and the market requirements, has contributed to the high levels of unemployment. Therefore, by coming up with appropriate ways to ensure that students are given quality-training will on great magnitude impact on the employment rates. Providing loans and any kind of financial support to students but failing to impart in them relevant skills is a waste and not a priority.

There is need to improve the literacy and numeracy skills of those that leave school to increase their employability. According to National Assessment Program – Literacy and Numeracy (NAPLAN), most of the school leavers in Australia lack sufficient literacy and numerical skills that does them a disservice when they are looking for jobs. This has contributed to increased number of unemployed youth in Australia. Therefore, ensuring that such measures are adopted will increase their employability and in the long run reduce the problem of unemployment.

Further Recommendation

The Federal government should consider passing laws that would allow workers to have lifelong learning investment accounts. Such accounts would be managed by workers to enable them endeavour to acquire more vocational training as they pursue their careers. The money that they save should be utilised in meeting their training needs. In such arrangement, employers should make the payment through deductions. This will allow low-income earners to get an opportunity to further their studies regardless of the low incomes they get.

Implementation of need based vocational education/training reforms for those that have completed their school will as well go miles away in improving their employability (Dixon & Lim, 2012).  Those that have completed their school and have no interest of pursuing their college or university education can be allowed to join vocational institutions on needs based to help address areas of their weaknesses. Achieving this can be through offering them certificate level training, supporting them with government funding to help address specific areas of challenge. The courses have to be designed putting in mind the industry to align skills and labour requirements of the Australian economy. There is also need for the policy makers to shift from focusing majorly on the university education to instilling critical thinking, versatility and problem solving skills in their students.

This is very important and was even pointed and recommended by the Wold Economic forum in its January 2016 report. The report predicted that in future as early as 2020, one third of the skills considered important currently by the workforce will have changed (Leopold et al 2016).  The society or the education institutions need to place more emphasis on creativity, critical thinking and problem solving to enable learner become marketable in future.

It is therefore prudent that the government provides enough support to the universities so that they can build platforms and structures that will enable them focus on these three major issues of skills.  Furthermore, training in a specific career path will also every important in Australia as it will make them specialists in a narrow area equipping them with appropriate skills and knowledge to execute their mandates or tasks better.  These changes will positively impact on the economy and more youths will be able to get jobs easily ad they will be viewed as experts and assets to their organizations.

Conclusion

Unemployment in Australia is real with the existence of substantial number of youths ready to work but who cannot find job.  Australia has gone through various business cycle and recessions in the past years that has had negative implication to its people. However, with all these pitfalls and challenges such as recession and inflation, the country has managed to retract back to the trucks. The economy of Australia has been stable in the last five years, evidenced by the decreasing unemployment rate.  The countries have through multiple approaches and strategies including fiscal policy planning managed to create a conducive environment for the people. Therefore, there is no doubt that indeed, as the economic situation continues to stabilize, the level of unemployment rate will definitely decrease. This will impact on the people live in the long run because of the impacts this will have on the economy.

Australia being one of the richest countries explains the low unemployment rates compared to other countries across the world. The economy is stable and has various areas of opportunities that people that posses special skills can be employed. Despite this, the challenges of unemployment cannot be overlooked as quite a number of youths and other members of the community especially school leavers find challenges with securing jobs.

It therefore, remains appropriate and in order for the Federal government to work towards eradicating any incidences of unemployment to ensure that the economy thrives and that the living standards of the individuals improves.