Labour markets/ Workforce planning Unemployment – understanding the terms

UNEMPLOYMENT Def. Where some people are willing and able to work, but are unable to find paid employment Fraser et al p320

REPORTING UNEMPLOYMENT ABS Utilises regular household surveys Centrelink Counts those registered for unemployment benefits Fraser et al p320

CRITERIA FOR UNEMPLOYMENT Aged 15+ Not employed during survey week Actively looked for f/t or p/t work Plus must fit into one of: Available for work Waiting to start a new job within 4 weeks Waiting to be called back from stand down Fraser et al p320

TYPES OF UNEMPLOYMENT (1/5) Cyclical Unemployment (Demand-deficient unemployment) – caused by a deficiency in the level of aggregate demand Fraser et al p323-4

TYPES OF UNEMPLOYMENT (2/5) Non-cyclical Unemployment Not related to any phase in the business cycle –Frictional Unemployment Results from lags, or frictions in the price mechanism, which is a slow down adjustment in the labour market Fraser et al p323-4

TYPES OF UNEMPLOYMENT (3/5) –Structural Unemployment Caused by adjustment in the industrial structure of the economy –Seasonal Unemployment Seasonal nature of production in some commodities, particularly primary production such as sheep & fruit picking Fraser et al p323-4

TYPES OF UNEMPLOYMENT (4/5) Long-term (Hard-core) Unemployment Unemployment of 12 months or more Some members of society are essentially unemployable because of lack of education, poor physical or mental abilities, or negative attitude to work, or even age Fraser et al p323-4

TYPES OF UNEMPLOYMENT (5/5) Underemployment When people who have p/t jobs would prefer to work more hours, or full time. –Hidden Unemployment Official figures tend to exclude large numbers of people willing to work but are not actively seeking employment Fraser et al p323-4

MEASURING UNEMPLOYMENT (1/2) Direct Measure – Unemployment rate U=LF-J UR=(U/LF)x100 Where U = no. unemployed UR = unemployment rate LF = size of labour force J = no. of people in jobs (employed persons)

MEASURING UNEMPLOYMENT (2/2) Indirect Measure Labour Force Participation Rate LFPR = (J+PLW)/CV 15+ WhereLFPR = labour force participation rate J = No. people in jobs (employed) PLW = No. looking for p/t & f/t work CV 15+ = civilian pop. aged over 15

CAUSES OF UNEMPLOYMENT (1/2) Structural Unemployment Due to fundamental changes in the structure of labour demand – specifically the kind of jobs that an economy offers. Most new industries are more capital-intensive and require sophisticated technological skills. Fraser et al p329/30

Cyclical unemployment Caused by downturns in the economic activity in the economy Reduction in overseas spending Increase in interest rates Increased inflation rates Reduced government spending

CAUSES OF UNEMPLOYMENT Social Welfare Programs??!!! Erosion of incentives to find new jobs quickly – assistance with health, housing and food make the newly-unemployed less enthusiastic in looking for a job. Tax rates Fraser et al p329/30

Government schemes which support creating jobs or increasing skills · fiscal (company tax changes, investment incentives, child care, privatisation, export policies, case mgt )NB the Jobs compact was an attempt at active employment rather than passive approach to pay dole, parenting allowance to spouses who keep low paid jobs, incomes test to be modified to allow for p/t work, regional development

· monetary policy( interest rates) · incomes and restructuring ( labour market reform, enterprise bargaining, skills, promoting small business and export industries) Single parent payments · education and retraining policies ( job search, HSC changes giving more skills etc award changes-competencies, TAFE and private providers-modules, youth training etc

How do you address Cyclical unemployment?

How do you address Structural unemployment?

Unemployment in disadvantaged groups

Long term unemployed

We’ve gone from unemployment to skills shortage Why?

Unemployment in the local market is extraordinarily high for youth Why? What can be done about it?

The government is offering overseas visas for fruit pickers Comment…

Discuss the effects of the changing level and incidence of employment and unemployment.

What is the effect of… economic growth business cycle world trade and growth technology