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To help explain the article in economic terms of the Australian economy supply and demand is one that is affected immensely and can help explain how though we have a created more jobs we still have unemployment and now even underemployment. If you think of supply as how the jobs are out there in the economy and demand as the amount of jobs needed. Though the article states that society has managed to add 53,100 full-time jobs in August alone, there is still a shortage as it can be seen in the graph below how the shortage is created by demand being more than supplied.
Though this graph does show that there is a shortage in jobs being supplied it doesn't show how there is a shortage isn't exactly due to the amount of jobs being supplied it is more focused on the skill shortage, the people wanting the jobs don't have the skills to fill the jobs being supplied. This is showed throughout the news article on the Australian economy needs to supply the ability to learn skills so our jobs can be filled rather than just supply jobs that cannot be gained.
This article is extremely relevant in looking at how the Australian economy is suffering from unemployment and underemployment equally. This does affect our society as a whole and everyone in term a part of the society can be affected making it a macro problem to the economy. As the article states inflation has been a big issue and fear since our unemployment started to sky rocket. Though the article does state there is a skill shortage throughout society this cannot be all put on the government as the article is pointing out because individuals need to be responsible for themselves and if the jobs are out there than they need to try harder to gain them. This article does have a relevant point about stating how unemployment and underemployment is affecting all of society but this cannot all be blamed on the government who has been working to supply the jobs that there are. The work the government has put forward in creating jobs should mean the shortage is less, referring back to the graph. Either way this article is very enlightening when looking at the Australian economy on unemployment and underemployment.
Australia's current economic crisis is largely due to unemployment, yet the crisis negatively affects unemployment by causing it to rise.
The article, (http://news.smh.com.au/breaking-news-business/jobless-rate-expected-to-fall-in-august-20100907-14yy9.html), comments on how bad unemployment levels are across Australia. It specifically talks about the short-term fix to unemployment levels over the August election in 2010. A spokesperson for the Australian Electoral Commission (AEC) said that the majority of those employed to minimise the unemployment rate, were only employed for Election Day.
To aid unemployment rates, there have been suggestions for another stimulus package. Although, there have been added remarks that it should not be until 2011 in order to be effective.
Another stimulus package, like the one presented by Kevin Rudd in 2009, in theory, would give consumers an incentive to spend more money, thereby investing more into the economy. This in turn would increase sales for companies, which increases the contribution to the governments through taxes.
At the moment, producers are making less sales and their producer surplus is in the negatives. As shown in the diagram below.
This diagram below shows how the consumer surplus has been affected and how governments' taxes have affected the situation.
This diagram shows that the consumer's surplus has decreased so much, that there is now a deficit. The diagram also shows where the tax margins were.
In relation to the financial stimulus package, there seems to be some argument as to its effectiveness. The government is essentially giving away free stuff. If the government gives money to people, with the incentive to buy, they will buy. Companies will gain some profit and pay a small percentage back to the government. The incentive seems like a short term fix; and procrastination to further decline. Furthermore, employing people for a very small time frame, may reduce unemployment levels slightly, but not for long. Soon those same people will be back on the unemployment scales, increasing levels even higher next year.
Although something needs to be done, giving away government funds does not seem the ideal solution. More focus should be on reducing unemployment. This would improve the effectiveness of companies, allowing them to produce more and sell at a cheaper price, it would give people an income, allowing them to purchase aforementioned goods, and reduce government taxes, allowing companies to thrive again. However, the main emphasis should be on unemployment. Solving that would, inadvertently resolve the other two dilemma's.
Since globalization started occurring, Australia has become increasingly integrated in the world economy. It is because of this that Australia was affected so significantly when the Global Financial Crisis (GFC) hit. In 2008 Australia starting hitting unemployment rates as high as 5.8% before falling to lows of 5.2% in May 2010. It's because of the GFC that Australia has incurred the need to look beyond the headline unemployment rate.
As identified in the article, "Low unemployment masks army of underemployed" by Michael Janda, underemployment is a serious issue facing the Australian economy today. Although the unemployment rate shows that unemployment may not seem as bad due to the GFC as initially thought, a further look into issues such as total hours worked, labor underutilization and underemployment reveal that Australia has much work ahead of it.
Of the 10.9 Australian in employment in September 2009, 800,000 said they would prefer more work and 5.7% were classified as unemployed. Those that were identified as wanting to work more were both full and part-time worker, with 3% increase on the previous year for people who wanted to work more.
The Australian Bureau of Statistics (ABS) estimates that the total underutilized workforce accounts for 13.5% of the Labor Force. This is a substantial rise from the 9.9 estimated underutilized workforces in February 2008. January's statistics indicate a 1% decrease in hours worked comparatively with more than half the part-time workers wanting full-time jobs. These underemployed people's are represented in Graph 1.
ABS - http://www.abs.gov.au/AUSSTATS/abs@.nsf/Latestproducts/6265.0Main%20Features2Sep%202009?opendocument&tabname=Summary&prodno=6265.0&issue=Sep%202009&num=&view=
Underemployment also affects some demographics more severely than others. Women were seen to be the most affected by underemployment compared to men with 452,100 women being identified as underemployed compared to the 283,800 men.
Although Australia is still performing better than other countries like Spain (unemployment - 20%) and the US there is still substantial room for improvement. Since the serious decline caused by the GFC more than the unemployment figures need to be looked at in order to get a true reflection of the Australian economy and the unemployment within it.
Within Australia, further emphasis needs to be put on the underemployment figures and the underutilization figures. Government needs to ensure that policies not only cover the seriousness that is unemployment but also these issues of underemployment and underutilization. If the government chooses to focus solely on unemployment then the severity of the labor market conditions will be overlooked as underemployment rises above unemployment as can be seen in Graph 1.
Overall, without further emphasis on underemployment, whilst unemployment may continue to decrease a true reflection of the economy isn't being shown and therefore key issues within the economy cant be addressed. In order to improve the Australian economy to ensure it is as prosperous as possible it is time for the Australian government to take charge and help those underemployed people through, law, regulations and policy's as Australia comes out of the GFC and into a new era of government.