Introduction:
The formal definitions of unemployment relate to its consideration as an influence on the varying dimensions of economic development of a specific country. As per Bennett, the presence of unemployment is imperative in all market economies due to the foremost influences of dynamism in the factors of birth and mortality rates as well as scenarios of economic growth or recession and the changes in employment following the influence of these factors. On the other hand, the unemployment caused due to these environment-specific factors is accountable as a mandatory inclusion (Bennett, 2015). However, the considerations for the structural changes in the Australian economy could be associated with the profound elements of the nature of the product and the process primarily due to technological changes. The impact of comprehensive integration in global markets, modifications in consumption patterns due to alterations in real income and the increasing competition from low-wage countries especially in terms of services and manufacturing industries could be assumed as profound influences on the structure of the Australian economy.
According to Brotherhood of St, the unemployment levels in Australia are further associated with the characteristic elements of sustained loss of jobs in the production sector and the level of formal education of individuals in the labour market. Therefore a comprehensive discussion on unemployment in Australia has to be realized with the utilization of information resources and research to accomplish a cognizable image of the factors leading to the prominence of unemployment (Brotherhood of St Laurence, 2016). A critical assessment of the recent trends in employment observed in Australia from credible sources is also accounted for in the report to realize a comprehensive impression of the issues of unemployment.
Furthermore, Gregory & Smith said that the discussion would be largely emphasized on the increasing rates of unemployment problem among the youth which is a detrimental implication for other social consequences (Gregory & Smith, 2016). The interdependence of social attributes such as poverty and family conflicts on the unemployment statistics is cognizably associated with the negative impacts of unemployment and has been illustrated comprehensively in the report.
Background of the problem:
The observation of statistics about employment and the Australian labour market in recent times provides reasonable implications towards the concerns of increasing unemployment. The observation of almost 19% of the workforce in October 2015 reflected on 2.454 million unemployed or under-employed individuals which has increased to 2.560 million in October 2016 (Nguyen & Nilsson, 2014). The actual estimates of unemployment rates are reflective of a potential increase to 9.2% as compared to 8.8% last year implying formidable concerns for the economic development of Australia.
The profound concern that could be drawn towards the identification of the problem for this report includes references to the contingency measures to address the spiking levels of unemployment. The observation of the increasing workforce in Australia from 188,000 in 2015 to 12,851,000 in 2016 as compared to the increase in total employment also suggests the disparities in the creation of jobs and the increasing strength of the workforce (Nguyen Van, 2016). On the contrary, part-time employment has obtained a substantial increase in recent years suggesting the subsequent indications towards the increase in under-employment levels. The underemployment rate accounts for 9.9% of the total Australian population which relates to individuals employed on a part-time basis and in search of more work.
Australia has been struggling with the menace of unemployment since World War I and II with the observation of profound efforts to tackle unemployment rates. The Australian economy faced the brunt of unemployment in the event of the global recession even though Australia was able to ward off the detrimental consequences of the recession to the highest possible extent. The utilization of public expenditures, tax rebates and stimulus packages in the Australian financial infrastructure accounted for limiting the impacts of unemployment due to the recession (O’Donnell, 2015).
Despite efforts such as management of working hours to prevent downsizing, the organizational workforce depicted formidable resentment towards the changes. Furthermore, the implications of youth unemployment are also observed as potential concerns for economics researchers and academicians. The necessary implications reserved from the statistics are indicative of the significance of other variables that define employment rates and behaviours (Plummer & Tonts, 2013).
Some employees consider the importance of a challenging and satisfying work experience for employment while other employees prefer flexible management and effective leadership. Therefore research on the impact of these elements in the context of unemployment in Australia could provide a source for critical inferences to the report (Plummer & Tonts, 2013). The significance of addressing the unemployment rates could be vested in the promising outcomes such as economic growth, increasing aggregate demand and wage growth as well as the government intervention noticed for addressing unemployment rates.
Unemployment trend among Australian youth:
Youth unemployment has been recognized as a subsection of the discussion on the unemployment statistics in Australia which has led to minimal emphasis on the issue. As per Plummer & Tonts, the formidable highlights about the problem of youth unemployment which have been noticed in the last five years in the Australian economic framework would be promising implications for recognizing the severity of the issue of youth unemployment (Plummer & Tonts, 2013). The necessity for concerns over youth unemployment could also be validated based on the drastic increase in the same and the proportion of unemployed youth in Australia to almost one-third of the total unemployment share.
Figure 1: Youth Unemployment Hotspots
Source: (Milner, Page & LaMontagne, 2013)
Furthermore, Nguyen & Nilsson said that the average youth unemployment rate of 13.5% over the last 12 months has been estimated to be twice the rate of unemployment among adults. The full-time employment positions for youth could be associated with a prominent decline and the increasing number of teenagers searching for part-time jobs could also be recognized as a noticeable cause for increasing unemployment levels (Nguyen & Nilsson, 2014).
Another noticeable factor that can be associated with the unemployment levels in Australia refers to the lack of categorization of individuals as unemployed owing to their inability to search actively for a job. The data illustrated in the context of youth unemployment levels is largely indicative of higher decline in the higher year 12 attainments within the age group of 15-19 years.
As per Milner, Page & LaMontagne, comprehensive studies about unemployment in Australia reflect on the varying causes of youth unemployment especially in the lack of comprehensive economic growth. The adverse economic conditions in the market could lead to a potential impact on the comparatively low-skilled, minimally experienced workforce in the younger age group of the labour market participants (Milner, Page & LaMontagne, 2013). Therefore the unstable nature of youth unemployment can be perceived invariably from the case of the low age and inexperience of the youth. The Australian job sector is further plagued by the requirement of counterproductive regulations for the professional environment to address the concerns of industry-specific awards and the improvement of minimum wages.
The long-term unemployment statistics have indicated a steep rise since the global financial crisis which are complemented by pitfalls such as the inability of job seekers to access the job market irrespective of the efforts for job searching or pay floor levels (Mavromaras, Sloane & Wei, 2015). The excessive dependence of unemployed individuals on welfare assistance has to be moderated through the provision of incentives for acquiring work and the establishment of activity tests that could improve the chances of an individual landing a stable job. Youth unemployment is also associated with the implications for minimal inclination among job seekers to acquire job-specific competencies alongside the formidable differences between the skills of existing job seekers and vacant job positions.
As per Gregory & Smith, the basis for workplace productivity is vested in the integrated foundation based on literacy and numeracy skills which are inclined towards the implications for young workers to acquire the basic educational competencies to improve their prospects of employment. The comprehensive illustration of the youth unemployment scenario would be accountable for describing the overall unemployment in Australia (Gregory & Smith, 2016). The implications for doubling the unemployment rates among the youth of Australia since the global financial crisis in 2008 create concerns for economic development.
The implications for the averaging unemployment rates at a rate of 13.5% could be accounted as profound indicators that the trends of youth unemployment are considerably higher than adult unemployment rates. The unemployment rates are also subject to the inexperience of young job seekers as well as their lower skill levels that lead to complex outcomes in their employability. Unemployment in the recent five years can be critically analyzed from the perspective of academic journals and articles about improvements in the trends of the global economic environment (Gregory & Smith, 2016).
One of the profound aspects that can be perceived concerning unemployment is the observed responsiveness to economic cycles implying that the depreciating youth employment could be considered as the direct result of the global financial crisis. Despite the remedial measures implemented by the Australian government to cater for the recession scenario as well as maintain the employment rates, the trends of unemployment have been aligned in an upward direction since 2008 with prominent references to the stalled improvement of economic conditions and the subsequent surges.
The socioeconomic consequences of the financial crisis have exerted the maximum impact on the youth segment of the Australian population with the observed instances of an increasing number of job seekers. Facing the challenges of youth unemployment is an imperative requirement for Australian governance to prevent detrimental consequences for economic development in the long run (Davidson, 2014, August).
Youth labour market:
The ageing of the Australian population is high and hence the ratio of the youth population has been experiencing a slight decline in the recent five years. The observation of demographic analysis is critically helpful for refuting the ambiguous claims that refer to the influence of high immigration intake on employment in Australian youth. The representation of the young people within the age group of 15-24 has been reduced substantially as compared to the 1980s albeit with the prominence of youth among the unemployed share of the population.
According to Mavromaras, Sloane & Wei, the employment of young people is estimated to be 15% of the total number of working individuals in Australia largely observed in the accommodation and food services, manufacturing, construction, retail trade, health care and social assistance sectors. The essential factor to be noted in common among the industries is the provision of efficient regulations for facilitating rewards which leads to complexities in addressing youth unemployment (Mavromaras, Sloane & Wei, 2015).
Figure 2: Australian Employment Change & Unemployment Rate
Source: (Nguyen & Nilsson, 2014)
It can be imperatively observed that the regulations would be accountable for higher entry costs and barriers that lead to implications for improvement in the utilization of youth labour. The global financial crisis impinged detrimental consequences on the participation of youth in the labour force which was estimated to fall from 71.3% to 66.2% in the initial phase of 2014.
Lower participation rates could be associated with the exclusion of individuals from the labour market since the individuals who cease to scout opportunities in the job market are not technically accounted as unemployed individuals. Youth unemployment has been increasing particularly since 2009 with the observation of two major downturns experienced since the financial crisis (Mavromaras, Sloane & Wei, 2015). The spiking increase in the unemployment rate started in August 2008 and resulted in a drastic change in the unemployment rate from 9% to 12% by the middle of 2009. Recently, the unemployment rates experienced a formidable surge towards 14% depicting an all-time high unemployment rate, especially as a response to higher labour market participation.
As per Bennett, the critical examination of dynamics in the youth labour market is further enhanced by the inclusion of categorized studies on teenagers between the ages of 15 and 19 and older youth from the ages of 20 and 24. The study is accountable for the provision of detailed insights into the differences between the segments with varying demands and expectations which provide a variable impression of the unemployment rates in the Australian labour market (Bennett, 2015).
The consideration for the educational commitment of the teenagers to school and part-time work can be estimated as a profound contrast to the older youth who are directed towards full-time careers leading to the imposition of distinct challenges as well as opportunities for each segment. The explanation for the sudden spikes in unemployment rates since the global financial crisis could be observed in the number of full-time job-seeking individuals among youth as well as teenagers searching for part-time jobs.
The onset of the financial crisis prompted the youth population to engage in the acquisition of full-time job positions which contributed to the rise in unemployment rates till mid-2009. On the other hand, the substantial increase in the number of job seekers looking for part-time jobs among teenagers was also responsible for the increasing trends of unemployment among youth. The job terminations in response to the financial crisis can also be accounted as major attributes for the decline in youth employment rates especially in the domains of retail trade, manufacturing and construction.
The inexperience of teenagers was also accountable for the majority of young individuals included in the proportion of the workforce that has been downsized. Possible underemployment could be imperatively observed in the increasing level of the youth population looking for part-time jobs thereby leading to concerns for increasing mismatches in the labour market and the unemployment trends among the youth (Milner, Page & LaMontagne, 2013).
Disparities with the labour market:
The understanding of mismatches in the labour market can be identified in the case of the gap between the supply and demand characteristics of workers. The noticeable implication that can be observed in this case is reflective of the imbalance between demand and supply of workforce competencies that lead to youth unemployment. Job positions requiring the provisions of earlier experience and the skills acquired through experiential learning are also considered major pitfalls for the young population to acquire employment opportunities.
The mismatches of competence requirement and supply could be reflective of the vacancy of a job position for a longer time. The economic perspective suggests the interpretation of the relationship between job vacancy rates and unemployment rates could be facilitated flexibly through the Beveridge Curve which illustrates the structural and cyclical components of unemployment. The downward slope in the curve is indicative of the negative cyclical correlation between unemployment and job vacancies concerning the business cycle. Furthermore, the favourable scenarios suggest the low levels of unemployment and high job offerings which are conversely applicable in negative scenarios. The structural component of unemployment can be perceived from the position of the curve involving the comprehensive representation of underlying elements in the economic infrastructure that lead to mismatches of skills (Nguyen & Nilsson, 2014). Some of the structural components of unemployment in Australia in the last five years could be apprehended in the sector-wise changes, demographic fluctuation and adverse policy implications.
The sector-wise changes could be noticed in industry transition such as in examples of change from a manufacture-based economy to a service-based economy while the demographic changes could be perceived in changes in age structure or gender distribution in the population. The adverse policy implications could be largely associated with the substantial minimum wages and red tape measures associated with counter-productivity. The shifts in the structural curve of employment are indicative of the efficiency of the job matches. Findings from the analysis of Australia’s employment trends are reflective of the consequences for Australians in the labour market. The process of shift in the unemployment trend lines should be assessed with comprehensiveness by estimating the unexpected nature of the phenomenon and its potential implications for overall employment rates.
The shift in the structural component of unemployment rates could be validated on the grounds of deterioration in the matching job searches as a response to the economic crisis and economic uncertainty about the inclusion of the workforce by organizations. The outcomes of the awards system implemented in Australia also have formidable implications towards the reduction of risks for bad hiring and imposition of counterproductive labour costs (Plummer & Tonts, 2013). These characteristics of the rewards program could lead to potential setbacks for the improvement of employment rates among youth in Australia.
The implications of skill mismatches could not be undermined in the research analysis of the unemployment scenario in Australia in the last five years. The variability of situations creates concerns for downsizing which need to be addressed by adjustments in the labour market over a substantial course of time. The changing nature of contemporary jobs is also a noticeable dimension that can be noticed profoundly in the case of unemployment. The changes in Australia’s economic structure with maximum emphasis on the realization of a highly specialized economy characterized by sophisticated automation and information systems are also indicative of the emerging trends in the employment sector. The unemployment rates are particularly supplemented by the requirement of competencies from potential job seekers to address the challenging tasks imposed for specific job descriptions (Plummer & Tonts, 2013).
The possible recommendations that could be used for addressing the observed issues about unemployment include references to reforms that could guide improvements in productivity and higher economic growth alongside sustainability. The concerns for effective schooling to minimize the instances of skill mismatches can be utilized effectively for improving the competence of labour market participants.
Conclusion:
The report presented a critical interpretation of the unemployment scenario in Australia in the last five years. The report illustrated the background of the problem of unemployment and then depicted the potential factors that are involved in the issues of unemployment. Economic concerns especially in the context of unemployment were identified in the report to obtain a generic impression of the varying trends about unemployment in Australia. The primary focus of the report was aligned with the implications of youth unemployment which is accountable for almost one-third of the total unemployment rate.
The detrimental consequences of neglecting youth unemployment which has been a profound dimension in the employment statistics of Australia in the recent five years could be observed in the future. The evidence presented in the report could be observed in the explicit illustration of the labour market in Australia comprising of youth population and the impact of the global financial crisis on the employment levels in Australia.
The report also presented conclusive interrelationships of labour market supply and demand which dictate the nature and intensity of mismatches of skills. The critical evaluation realized in the report helps obtain plausible recommendations that could improve the scenario of increasing unemployment trends in Australia over the last five years.
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