Economics Unemployment

Explain the main causes of unemployment in Australia and discuss the use of government macroeconomic and microeconomic policies to reduce the rate of unemployment.
Unemployment refers to a situation where individuals want to work but are unable to find a job, and as a result, labour resources in an economy are not utilised. Unemployment is measured by; the number of persons unemployed divided by the total labour force, x100. The 2012 figure is currently at 5.4%. The main types of unemployment include; structural, cyclical, frictional, seasonal, hidden and long term. The official unemployment can be inaccurate as it does not take into account “underemployment” and “hidden unemployed”.   Underemployed people are people who have a job (part time/casual) and work limited hours, and they would like to work more. Hidden employed people have not been able to find work and have left the labour force. They would take up work if offered but may have barriers, whether it is looking after family or having a disability. Taking into account the combination of these two areas, we have the underutilisation rate, which as of August 2011, was 11.2%. There are many causes of unemployment.
The demand for labour is a derived demand- which means the demand for labour is directly affected by the demand for goods and services that labour produces. If there is a downturn in aggregate demand in the economy, this may be reflected in a downturn in the demand for labour and increase unemployment. A decline in aggregate demand could be due to; an economic downturn, with lower consumption and investment spending, government policies designed to lower demand, a decrease in the demand for Australia’s exports due to slower growth in our major trading partners’ economies or less competitive Australian goods and services in the world market, and the effects of a global recession, which increased unemployment around the world.
In the long term, unemployment is influenced by the level of sustained...