Download Labour marketswfplanning unemployment

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
Where
U=LF-J
UR=(U/LF)x100
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)/CV15+
Where
LFPR = labour force participation rate
J
= No. people in jobs (employed)
PLW = No. looking for p/t & f/t work
CV15+ = 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