The statistics presented in the article present the real situation in the Australian employment industry. Several issues in the economy of the country have seen a sharp rise in the rate of unemployment from 4.2% to 5.8%, and the rate is even expected to be higher (6%)by the time this quarter ends, as per the expectations of the analysts of Trading Economics. The unemployment rates in Australia are measured and projected with the use of ARIMA model that uses the calibrations expectations of analysts. However, that does not give a real representation of the situation of unemployment in Australia.
In order to have stability in the rate of unemployment, Australia has to create a total of about 20,000 jobs in every month. Nevertheless, the decline in the growth of the population and also the reduction in the participation in the labor force means that just a total of 10,800 was enough to cater for all the unemployment per month.
The Performance of Australia’s economy and unemployment past GFC
Since the happenings of the GFC in the year 2008, the economy of Australia has seen itself undergo a time of more uncertain, slower growth than was the case in the past years before the crisis happened. In overall, the largest unemployment rates were experienced in the manufacturing industry. The employment rates in the sectors of forestry, fishing and agriculture, dropped by a total of 28,000 jobs. The construction sector dropped by a total number of 32,000 jobs, retail dropped by 19,200, a drop in automotive repair services by a total of 27,000.
How the Australian government is dealing with unemployment.
The government of Australia is working hard to reduce the rates of unemployment and in that effect, it has employed some policies:
The first policy is the fiscal policy whereby it helps in increasing the aggregate demand as well as the economic growth rate. The government, in this case, needs to pursue a fiscal policy that is expansionary which entails the cutting of taxes as well as reducing spending by the government.
The second policy is the monetary policy that entails cutting down of the rates of interest. The lower rates of interest help in reducing the borrowing cost and at the same time encourage people to start spending and also make investment. That will to a great extent help increase the AD and also the GDP and reduce the diffident of demand, reducing unemployment rates.