1. Unemployment Definition – someone over 15 years of age not working but actively seeking work. One hour of paid work per week is considered as employment.

2. Labour force = employed + unemployed Participation rate = % of working age pop employed + unemployed (15 years +) Unemployment rate = % of labour force unemployed…around 5.5%recently

3. Causes / Types Cyclical factors- recession (derived demand for labour) Structural change – tariff cuts and globalisation/ technology Frictional – changing jobs Seasonal

4. Other issues Hidden U – is it really unemployment? Long term U = U for over 12 months Underemployment – what is it and is it a problem? Technological change/ productivity Wages growth Labour market inflexibility Rising participation

5. Natural U Natural U = Full employment ???? Cyclical U is zero due to economic growth. The remaining unemployment is structural. To reduce the natural rate of U workers need to be retrained. NAIRU = Non- Accelerating Inflation Rate of Unemployment Phillips Curve is vertical at NAIRU

6. Impact Economic costs -Economy operating below full capacity -Lower living standards -Loss of skills and long term unemployment -Govt expenditure increases

7. Social Costs -Increased income inequality -Family breakdown -Crime -Homelessness -Debt levels increase

8. Unemployment of Groups Youth Unemployment (15-19 years) is 3 times the national average Indigenous Unemployment rate is 16% Older workers tend to be the long term unemployed Rural areas have a higher unemployment rate – usually about 1% higher than urban areas

9. Policies Page 197- 199 How can macroeconomic policies reduce unemployment? ( explain the role of Monetary and Fiscal Policy) Have macroeconomic policies been successful in Australia? Why are microeconomic policies important for reducing the natural rate of unemployment further? What is meant by a ‘more flexible labour market’? What is meant by ‘labour market policies’? Why are labour market policies considered microeconomic policies?

10. Page 343-347 Why is education & training necessary to decrease unemployment? List examples of recent policies to increase productivity. What is the role of Centrelink? Explain the role of ‘Job Services Australia’? Why is ‘work for the dole’ an example of mutual obligation? Why is improving the skills of the workforce a priority for the government?