Economics - Unemployment


In Australia we have a formula for measuring unemployment. The percentage of people who are unemployed can be worked out by dividing the total number of unemployed / the entire labour force then x 100%. The labour force consists of all people over the age of 15 years who are able and willing to work. This includes employed and unemployed. Employed people are people who work full time (35h), part time (1), self employed and had a job but are on holidays or sick leave.
Unemployed people are those people that are actively looking for a job.

There are many different type of unemployment.   One type of unemployment is known as STRUCTURAL unemployment. This occurs when a producer changes the way they produce a good or service. For example a company that produces clothes decides to buy heaps of sowing machines instead of hand knitting their cloths. This causes the company to terminate employers. This is known as structural unemployment. This is one of the most common causes of unemployment. Another example of this is when companies move overseas or when new technologies occur and take peoples jobs.

Cyclical unemployment occurs due to changes in aggregate demand. This means that if there is a lot of demand for jobs because AD is demanding a lot of goods and services, cyclical unemployment will drop. If AD drops cyclical unemployment will rise.

Hidden unemployment is when people have given up trying to find a job. An example of this could be has applied for hundreds of jobs and hasn’t got any so has given up trying.

Hardcore unemployment is those people who are incapable of working for various reasons. An example of this could be a quadriplegic that cannot move his legs or arms.

Long-term unemployment refers too somebody who has been unemployed for longer than 12 months.   This could be a mum who is looking after her kids for the first few years of there life.

Frictional unemployment is when people are unemployed when finishing one job and...