Unemployment – Flashcards

Unemployment is defined as a situation where someone of working age is not able to get a job but would like to be in employment.

Frictional Unemployment Structural Unemployment Seasonal Unemployment Cyclical Unemployment

Occurs when people change jobs, get laid off (sacked) from their current job, finish school and looking for work, or any reason for time off between jobs.

Occurs when workers' skills do not match the jobs that are available. Changes in technology is a major cause. E.g. Blacksmiths, Chimney Sweeps, Typists etc...

Occurs when industries slow or shot down for a season. E.g. Fruit picking, ski instructors, lifeguards etc...

Unemployment that rises during economic downturns (right now in WA) and falls when the economy improved (booms). This is, unemployment affected by a BOOM and BUST cycle.

Exists when the unemployment rate is at the natural unemployment rate. (Under 5% in Australia)

Hard-core Unemployment Under-employment Hidden Unemployed

Persons without jobs for an extended period of time. They lack the necessary work and/or social skills for employment due to a lack of education or because of their skills have become obsolete.

Under-employment includes those workers that are highly in low paying jobs, workers that are highly skilled but work in low skill jobs and part-time workers that would prefer the be full time.

The group of unemployed individuals that are not counted in the unemployment figures compiled by the government. They are usually people who would like a job but are not ACTIVELY SEEKING work... therefore they are not defined by as being unemployed.

Unemployment falls more heavily on the teenage labour market than the adult labour market. The youth (15-19 year olds) unemployment rate is normally 3-4x higher than the 20+ age group. January 2014 youth unemployment rate was 12.4% whilst the adult rate was <6%.

Increase risks of poverty, social exclusion as well as cause loss of motivation and mental health problems Reduced levels of happiness and increase mental health problems. Increase in drug and alcohol use as well as higher levels of crime among people. Negative effect on economic growth and productivity Increases the economic costs for the state, since there is more money to be paid on social benefits and less money coming in from taxes

More careers education Encourage school to establish better ties with businesses Equip students through education system with more practical, job related skills, especially in ICT and financial (money) literacy Encourage students with financial incentives to stay in education and/or training longer Offer more apprenticeships so young people can work and train at the same time

The Natural rate of Unemployment is defined as the lowest possible rate unemployment achievable taking into account some frictional and structural unemployment. In Australia it is considered to be approx. 5% (2% frictional and 3% structural).