Unemployment in Australia

Unemployment in Australia








TOC o “1-3” h z u Introduction PAGEREF _Toc409140448 h 3Rise in Technology PAGEREF _Toc409140449 h 4Foreign Workers PAGEREF _Toc409140450 h 5Level of Education PAGEREF _Toc409140451 h 7Outsourcing of Products and Services PAGEREF _Toc409140452 h 8Conclusion PAGEREF _Toc409140453 h 10Bibliography PAGEREF _Toc409140454 h 11

IntroductionUnemployment is one of the major economic challenges that many countries are facing today. People, who are considered to be unemployed, are those that have the qualification but have not yet been employed, or those that have been laid off from their work for more than a week. A country with a high rate of joblessness generally lag behind economically as this means that a great percentage of its population make up the dependency ratio, hence may not be productive, a factor that hinders development.

There are three types of joblessness that can be experienced. These are cyclical unemployment, structural and seasonal unemployment. Cyclical unemployment occurs when there is less demand in the economy, and therefore there is a need for less production of goods and services. Consequently, fewer workers will be needed hence resulting to mass unemployment. This unemployment is temporary and depends on the demand rising with the rise in demand for the products and services and falling with the fall in demand.

Structural unemployment comes into place when there is a mismatch of the skills that the unemployed people have and the requirement that is needed in the field. This means that even if there are job vacancies, these people are not fit to fill those vacancies. Seasonal unemployment is linked to certain jobs that are seasonal, such as construction work and fishing. In most cases, this type of unemployment varies with the climate and therefore regions of Australia. In times of winter, industries like fishing industry struggles. Hence, the workers in these industries have to be seasonally unemployed.

According to the Trading Economics (2014), the unemployed rate in Australia has increased to 6.3% by November, 2014, down from 4% in the year 2008. For instance, the number of female employees that were in full term employment had fallen by 21,400 in 2014. The rise in the unemployment rate in Australia can be attributed to the following factors:

Rise in TechnologyWith the birth of the 21st century, technology has developed to an extent that every sector can be easily automated. Industries and other workplaces are increasingly adopting this technology to produce high-quality products and services. This has been to the advantage of the organization in that the increased production has increased the sales, and hence leading to high profits.

On the other hand, the rise in technology has brought about displacement of people from their workplace. A single machine can perform a task that initially required an effort of many employees. This brings about a cheaper substitute and hence the organizations have resolved on adopting machines and lay down workers. Some people may be employed to operate these machines, but when the number of employees being fired and those being hired is compared, the number of employees fired much far surpasses those being employed. This has created massive unemployment in Australia.

From the graph below, the technology level has been rising since as time goes by. By the year 1984 when the level of technology was lower compared to other years, the rate of employment was high (when other factors like the level of education of the prospectus employees are held constant) and the rate of unemployment was lower compared to subsequent years. However, as the level of technology rises, machines are replacing human labor and hence the level of employment has gone down to 4.5% in the year 2000.

Figure SEQ Figure * ARABIC 1: Relationship between technology growth and employment rate. Source: Trading Economics

Foreign WorkersGlobalization and free trade have seen a large number of foreign workers reside and work in Australia. Some of these workers are temporary while others are permanent workers. A research conducted by Kauppi, Koskela and Stenbacka (2004) indicated that foreign workers demand cheaper pay as compared to Australian nationals. This has resulted in these workers taking up almost all the jobs hence rendering the Australian workers unemployed. This has been additionally backed up by the Australian government rule in 2014 that allowed easy acquisition of visas for the skilled migrants. Industries were allowed to sponsor workers from outside Australia who have the skills that the company may need. As part of the law, these workers are to be paid a salary that is 10 percent lower than the set threshold salary range. This makes the foreign workers cheaper, and hence becoming a preference for many companies as evidenced by the increasing number of foreign employees in the industries (Kauppi, Koskela and Stenbacka, 2004).

Vandenberghe (2009) has indicated that the number of the foreign worker have been rising steadily as the number of years goes by. In the year 2002, there were 100,000 foreign employees in Australia. However, the number had risen to 280,000 in the year 2009 and 2010, nearly tripling the figure recorded in the year 2002. This indicates that the Australian employees are getting a preference of the foreign workers as evidenced by their rapid increase in the labor force, rendering the Australian workers unemployed.

Figure SEQ Figure * ARABIC 2: Number of Foreign workers in Australia. Source: Organization for Economic Co-operation and Development

Level of EducationAcademic qualification is very important for one to get a job in Australia. Most of the jobs need a certain level of education before one can be considered competent to undertake the job. This means that the little education that a person has, the little chance that a person has of getting employed. It is impossible for one to be employed in the white collar jobs with little or no qualification (NCVER, 2014). Those that end up being employed settle in non-skilled and semi-skilled low paying jobs which hardly provide for their needs. However, these jobs too are temporary since one can be sacked easily to pave the way for those that are specialized in the field.

According to the research conducted by National Centre for Vocational Education Research in 2014, despite the presence of a large number of learning institutions and centers, many people are not able to undertake higher education because of the cost associated. Few people make it through to the university to attain a Bachelor’s degree and beyond. This means that a majority attains less than a Bachelor’s degree and hence, if employed, can be easily replaced by a person with a higher qualification. This has rendered many jobless, especially those that lack money to take specialization courses (NCVER, 2014).

On-job training is very important for any employee. It helps shape the experience and specialization in the line of work. In the case where these trainings are sponsored by an individual, it becomes an uphill task for some of the employees due to financial constraints, while some can effectively manage. The result is that with time, those, that did who do not take these specialization studies, fail to cope up with the current issues in the line of work and hence are either fired or denied salary increment.

The statistics are given by the National Centre for Vocational Education Research (2014) people with less than a high school qualification are likely to be unemployed, hitting a record mark of 15% in the year 2010. In the same year, persons, who were high school graduates who had not attended any college, recorded 11% unemployment. Holders of less than a Bachelor’s degree recorded 8% unemployment while those with a Bachelor’s degree and higher had 5% rate of unemployment. This clearly shows that the rate of unemployment is directly affected by the level of education people have(NCVER, 2014).

Figure SEQ Figure * ARABIC 3: Unemployment rate by education level in Australia. Source: National Centre for Vocational Education Research

Outsourcing of Products and ServicesOver the recent years, companies and other employers have developed a preference for having their jobs done outside the company as opposed to having workers do the job within the company. A company or an Individual located outside the company can be allocated to produce a certain product or service. This is because the services offered may be cheaper than setting up a group of workers to undertake the task, or sometimes setting up the whole department for such production. This renders people jobless as their jobs are taken by some external workers.

In his book, Cromie (2013) indicates that outsourcing product or a certain service may result in massive unemployment of the employees who were previously involved in the production of such goods and services. The human resource department cannot hire new staff to the departments whose services have been outsourced, hence lowering the employment vacancies. Also included are the investments that the Australian companies have invested abroad. Hence, the Australian citizens are not able to benefit directly from the employment opportunities that could have been offered by these companies. This has escalated the unemployment (Cromie, 2013).

The State Library of South Wales (2010) indicate that millions of jobs have been outsourced by the Australian employees, and the level of outsourcing has been on the rise. For instance, 0.3 million of jobs (0.6% of the total jobs in Australia) were outsourced, while 1.2 million jobs were outsourced in 2008. With the same trend, it is estimated that by the end of the year 2015, 3.5 million jobs will be outsourced, an equivalent of 6% of the total jobs in Australia. This means that some of the employees will have to be fired because of outsourcing (SLNSW, 2010).

Figure SEQ Figure * ARABIC 4: Number and percentage of Australian jobs being outsourced. Source: State Library of New South Wales

ConclusionUnemployment has remained on the rise in Australia. People are losing their jobs while fewer people are getting employed. Many reasons have been attributed to this increased rate of unemployment and among them is the adoption of modern technology. This has replaced many workers since sophisticated machines can perfom work that would have been done by many employees. Outsourcing has seen the job done outside the company, hence rendering individuals or sometimes the whole department jobless. The level of education has directly affected the employment of individuals, where some are not able to afford the cost associated hence remain unemployed, or entitled to low wages. The issue of employment needs to be addressed for a country to make any economic progress.

BibliographyAUSTRALIA, & NATIONAL CENTRE FOR VOCATIONAL EDUCATION RESEARCH (AUSTRALIA). (2014). Australian vocational education and training statistics: students and courses 2010. Adelaide, S. Aust, NCVER.

CROMIE, J., & ZOTT, L. M. (2013). Outsourcing. https://basalt.marmot.org/Record/.b37949767

STATE LIBRARY OF NEW SOUTH WALES, MACROPLAN AUSTRALIA, & LIBRARY COUNCIL OF NEW SOUTH WALES. (2010). A benefits cost analysis: outsourcing of acquisitions, cataloging, and processing in NSW public libraries. Sydney, N.S.W., State Library of New South Wales. http://catalogue.nla.gov.au/Record/4808349VANDENBERGHE, V. (2009). Australia. Paris, OECD. http://public.eblib.com/choice/publicfullrecord.aspx?p=437759.WILLIAMS, T., & TURTON, V. (2014). Trading economics: a guide to economic statistics for practitioners and students. http://download.e-bookshelf.de/download/0002/5216/12/L-G-0002521612-0003712129.pdf

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