According to the Labor government and the mainstream media, Australia has one of the lowest unemployment rates in the world. In reality, joblessness has risen to serious levels, and is worsening, in working class suburbs across Australia. Officially, the unemployment rate in Australia increased to 5. 70 percent in October of 2013 from 5. 60 percent in September of 2013(Trading Economics, 2013). Unemployment is troubling for the unemployed people and their families because it will contribute to a variety of health and social problems.
It will also have harmful effects on the nation’s economy because of the poverty issue caused by unemployment and the growing financial burden on society due to higher taxes. Action is therefore urgently required. This report will identify the effects and implications of the unemployment problem, analyse the causes, and suggest possible solutions. Impacts Research findings indicate that unemployed people in Australia suffer increased mortality and substantially poorer mental and physical health.
Unemployment problem Essay Example
They have greater prevalence of mental disorders such as anxiety, depression and psychosomatic disturbances (Fergusson et al 2007) which are often maintained throughout the period of unemployment. Job loss is also accompanied by negative lifestyle changes such as problems associated with the use of alcohol (Catalano et al 2009) and the increase use of nicotine and other substances. People who are unemployed also have increased incidences of medical conditions, which contribute to increased mortality rates.
As well as these health effects, unemployment can lead to serious social problems for both employed and unemployed people in Australia. Homelessness and crime are serious social problems often caused by unemployment(Junankar, 2000). People who face long-term unemployment are placed under increasing financial strain over time. Often a ‘quick fix’ is found in crime(Junankar, 2000). When a family member is in long periods of unemployment, there will be great pressure on other family members to provide financially.
Also, an unemployed household may have to relocate in search of work, which adds to stress levels and disrupts children’s education. Being without a job disrupts a family’s pursuit of a decent lifestyle and a healthy future. The health and social effects of unemployment in turn have economic consequences for Australian governments. The current president of the Australian Council of Social Services (ACOSS) estimated that at the beginning of 2013 about 2 million Australians lived in poverty–the main cause being unemployment (McCallum, 2013).
When the unemployment rate grows, the more tax we pay for welfare unemployment benefits, therefore the financial burden on society grows. An unfortunate consequence of higher taxes tends to be higher levels of resentment(Junankar, 2000). Also the strain on wage earners can add to their financial security, which in turn may lead them to vote against the government of the day as ‘punishment’. Causes The causes of Australia unemployment problem are multi-faceted and inter-related but can be summed up three heading: discouraged worker, high labour costs, the effect of recession and the baby boom after world war II
The first reason is the discouraged workers who are in working age but not actively seeking a job because they believe there is none to find (Borowski, 1986). A comparison of youth unemployment in Australia and the United States discouraged worker effect is also shown by Debelle and Vickery (1998), to be the more important determinant of variations in unemployment problem. The reasons why more workers are losing faith in their work is: no job in their locality, lack of necessary training or working experiences, considered to be too young or too old to have a job and have personal or social handicaps .
The first cause is no job left in their locality. Due to the fierce competition in job market, some regions which have great population and less jobs are hard to find a job, increasing the unemployment rate. The second cause is the lack of necessary skills training or working experiences, In today’s society, the phenomenon is that there is a shortage in skillful people while the unskillful is redundant ,so having an essential skill is really important. Skillful workers always tend to avoid facing the fierce competition in the job market.
The third reason is the age problem, since the people who are too young or too old are not likely to be hired by employers, inasmuch as the youth lack working experience and the olds lack the energy to do a work well. The last reason is the personal and social handicaps, since some disabled people have trouble finding a job, and that kind of people is the majority of people who consist of the unemployment people. The second one is the high labour costs in Australia because Australia experienced tremendous upwards pressure on wages and salaries, the Australia people’s income is really high now, since the lowest income in Australia is $16/hr.
This decrease the possibility of employers to hire more people and increase the illegal employment, which give rise to the high unemployment rate. The last reason is the effect of recession. As a result of world economic crisis, the output of Australia declined (Bell, D. N. F, 2010). Recession and unemployment in OECD, especially in mining industrial which is referred to the mainstay of Australia economy is suffered from a recession. With less output, the enterprises are less likely to hire more workers and sometimes fire some workers, increasing the unemployment rate in Australia.
The last reason is the baby boom after second world war, since people born that era has reached the working age and inasmuch as they were in a poor age, they do not chances to have standard education and has become the most unskillful people in the society, leading to the unemployment problem. Possible Solutions Viable solutions to unemployment problems in Australia would depend on three basic strategies: multiskilling employees, maintaining a proper labour cost, investing in infrastructure. The first strategy of maintaining multiple skill would benefit discouraged employees greatly.
As suggested by Lewis and Seltzer(1996), multiple-skilled workers have a higher elasticity of demand than single-skilled workers. A higher demand means more opportunities for discouraged employees to choose from. Additionally, multiple-skill can contribute to building up their confidence. From the perspective of labour market, a mix-skilled worker will also gain more attention which basically means more chances. A research conducted by Card and Krueger’s (1994) revealed that the labour cost is relatively higher than the US.
High labour cost is beneficial for the employed while disastrous for the unemployed. Business owners would hire less employees if the labour cost remains high thus can be an important driver of unemployment problem. Addressing this issue requires a intensive regulation of the labour market to measure the productivity as well as real wages properly. Richard (2011) suggests that Policies can be a driver in realizing this goal. Dawkins and Freebaim (1997), also argue that lower wages are a key factor in addressing unemployment problem in Australia.
As lower labour cost is achieved, more corporations are able to hire a larger number of workers, thus more occupations are available to the whole society. However, a lower unemployment does not necessarily equals to a healthier economy . Richard (2011) indicates that it is important to achieve a balance between employment and unemployment rates in order to refect productivity properly as well as control the real wages. The unemployment cannot be regarded as a problem if the balance is achieved in terms of general economy.
The recession of mine industry has a negative impact on Australian economy, numerous workers of mine industry are unemployed. The role of government in the policy arena is of vital importance in times of recession. One of the most effective approaches in terms of governance could be constructing more public infrastructure. This approach would benefit the Australian labour market in two aspects. A research conducted by Kenyon (1997) suggests that a great number of occupations could be provided in hard times through investing in infrastructure.
Moreover, sufficient infrastructure gives more chances for Australia to develop other industries in which a large labour-demand could be created. The strategy of investing infrastructure can also well-resolve the unemployment caused be baby boom with the occupations created. Conclusion: This report is aiming at solving the Australia unemployment problem. To deal with this problem, we analyze the causes and impacts of unemployment problem in Australia and provide some effective solutions in the end, especially to the discouraged worker and the influent flowing job market.
However, the Australia unemployment problem is a complicated one and it is rooted deeply in the capital society. The causes and impacts have interrelationship with each other, which can not be solved totally in this report by the remedy we offered. However, the government bureaucracies and public agencies and workers still need joint efforts to resolve the biggest trouble we are facing in Australia now—the unemployment problem, since it could give rise to a number of other social and health problems and it is unsustainable, socially and economically (Chapman, 1997).