Economics (Year 11) - Unemployment
What is the unemployment rate?
The labour force in Australia is made up of people who are over the age of 15 who are ready and actively seeking work. It includes people who have a job and those who are looking for a job.
The unemployment rate is found by the number of people who are in the labour force but are working less than one hour a week or do not have a job at all. It is important to remember that the unemployment rate is not just those people in Australia who do not have a job, it is those of working age who want a job, but don't have one. This means it is a figure that excludes children, retirees or people who don't want to work.
In Australia, the government set target is to have only a 4.5% unemployment rate. The reason why we do not aim for a 0% target, is to ensure that there is spare capacity in the workforce, so when new jobs arise there are people ready to work available to fill the demand for labour.
Other Measures of Employment
The unemployment rate only paints a small picture of the workforce of Australia. For that reason, other figures are used, the calculations for each of these figures is shown below.
The underemployment rate is found by people who want to work full time, however, can only find part-time work. This means they are not receiving as many hours as they would like to. This can be caused for a greater demand in the economy for part-time workers.
The participation rate is found by dividing the labour force by the number of people who are of working age in the population. This is an indicator that shows how many people are actively working seeking a job.
The underutilisation rate is a combination of those who are unemployed and underemployed.
The employment to working-age population rate is found by dividing the number of people who are employed by the number of people who are of working age in the economy.