Employment and Unemployment

Question 1

What does employment enable us?

Answer 1

• to earn an income so we can purchase the goods and services we need and want
• form relationships, and find friends
• feel good about ourselves as we are contributing to society

Question 2

What is meant by the term ‘Unemployment’

Answer 2

a situation where people who are willing and able to work are unable to find employment. They are actively looking for a job by completing job applications and/or registering with Centrelink.

Question 3

Who measures the unemployment? When? What is it?

Answer 3

• The Australian Bureau of Statistics using Labour Force Surveys.
• It is conducted monthly
• involves about 0.5% of population.

Question 4

How does the Australian Bureau of Statistics define the labour force?

Answer 4

• people who are older than 15 years years and are willing to work.
• The labour force includes people who are employed.

Question 5

What is meant by the term ‘Employed’

Answer 5

• a person who works more than one hour per week and receives an income/profit.
• this includes people who work in a family business, or if they have a job buy cannot work due to an illness, strike, or on holiday during the survey week.

Question 6

Who makes up the non-labour force?

Answer 6

made up of all those who are over the age of 15, but are not either working or seeking work.
Examples: students, retired people, some disabled, volunteers, and those who choose not to work such as parents who stay at home to raise children.

Question 7

How is the unemployment rate calculated?

Answer 7

(No. of people employed / No. of people in labour force) X 100 = Unemployment rate

Question 8

What are the limitations of the unemployment rate?

Answer 8

1. It ignores hidden unemployment
2. It ignores underemployment
3. Misleading survey answers
4. Statistical Problems

Question 9

What is meant by the unemployment rate ignoring hidden unemployment?

Answer 9

Discouraged job-seekers who have been discouraged from being denied a job multiple times and give up, making them not classified as the labour force.
- The unemployment rate is too low

Question 10

What is meant by the unemployment rate ignoring underemployment?

Answer 10

Those who work below their capacity such as working for just 1 hour per week, but want full-time work.
- statistics undermine the extent of unemployment.
- The rate is too low

Question 11

What is meant by misleading survey answers?

Answer 11

people who provide misleading responses in the Labour Force Survey, as they are in fear of losing benefits if they respond by saying they have completed some work during the period or if they were not looking for a job.
- Lies so the government can keep paying them
- Exaggerates the unemployment figures

Question 12

What is meant by Statistical Problems

Answer 12

The sample size is too small and isn’t a good and correct representation of the unemployment rates.

Question 13

What is the current unemployment rate?

Answer 13

4.1% - as of February 2024.

Question 14

What are the main causes of unemployment?

Answer 14

1. Cyclical Unemployment
2. Structural Unemployment
3. Seasonal Unemployment
4. Frictional Unemployment

Question 15

What is meant by the term Cyclical Unemployment?

Answer 15

• occurs when the spending in the economy falls.
• when people feel pessimistic about the economy so they save rather than spend, leading to a reduced production of goods, and then a reduced need for labour.
• can also occur due to a reduction in consumer incomes, and higher interest rates leading to less money available to spend.

Question 16

What is meant by the term Structural Unemployment?

Answer 16

• occurs as a result of the changes in how goods and services are being produced to increase productivity; e.g. robots taking over jobs are more productive and employers don’t need to pay them wages.
• another structural unemployment is when work is closed and sent overseas, due to a cheaper production overseas than it is current

Question 17

What is meant by the term Seasonal Unemployment

Answer 17

• as a result of the termination of jobs at the same time each year due to changes in seasons. e.g. skiing is for winter, lifeguards, sheep shearing.

Question 18

What is meant by the term Frictional Unemployment?

Answer 18

• occurs when people are unemployed between finishing a job and starting another. common in building trades and actors.
  Simple terms: You had a job, and are waiting for a new job to come. Actors waiting periods in between movies, tradies finishing a house and waiting for a new project.

Question 19

Define recession

Answer 19

Two consecutive quarters of negative economic growth, caused further negativity about the state of the economy.

Question 20

What is meant by Long-term unemployment?

Answer 20

people who have been unemployed for 52 consecutive weeks are longer.

Question 21

What is the youth unemployment rate?

Answer 21

9.4% - January 2024. More than double the national unemployment rate for all persons.

Question 22

What is meant by the term Youth Unemployment?

Answer 22

Individuals aged 15-24 years olds who are actively looking for a job but cannot find a job.

Question 23

Define Living Standards

Answer 23

Refers to how well-off individuals and the nation are overall.
- includes both material and non-material wellbeing

Question 24

What is material well-being?

Answer 24

it is the enjoyment received from having access to goods and services such as clothes and nail salons that increase individuals living standards.

Question 25

What is non-material wellbeing?

Answer 25

refers to the quality of life factors that is not related to the size of income or the quantity of goods and services consumed. It is the quality of human relationships, the state of the natural environment and the amount of leisure time

Question 26

Effects of Unemployment on: Individuals (and families)

Answer 26

• Reduced Incomes: welfare assistance is lower than the income resulting in a change of lifestyle having to cut back on expenditure of goods and services (which improve living standards). If individuals are long-term unemployed, will make them less employable, and losing skills and work ethic if unemployed for too long. Material living standards fall
• Family Unhappiness: more tension, stress, violence and in some cases crime and vandalism. Non-material living standards fall.
• Lower Self image, less healthy (no money to spend on healthy food), and less superannuation

Question 27

Effects of Unemployment on: Businesses/Society

Answer 27

There is a ripple effect on businesses. eg; if consumers can’t afford their morning coffee, the cafe lays staff off. They also don’t order as many coffee beans from suppliers, then the supplier starts to lay staff off.
- factors of production such as labour, capital, and land are not being fully utilised in the production process. As a result, fewer goods and services are being produced than the economy is capable of producing.

Question 28

Effects of Unemployment on: The Government

Answer 28

• Increased unemployment lowers the number of income earners, leading to less government revenue collected from income tax
• increased unemployment means the government has to spend more to pay individuals unemployment benefits, provision of health, and job creation schemes.
• Reduced revenue from taxes, but increased outlays associated with unemployment, may lead to the government increasing tax or reducing outlays in other areas (eg. education).
• Government to borrow money, adding to national debt.