Population and Employment

As the population ages, we will see changes to the way in which our society is structured. We can examine these changes by looking at our community from a number of different perspectives.

Individual: The impact of unemployment on the individual is dramatic. Without a job, a person will be reliant on transfer payments (unemployment benefits) from the government. In addition, being unemployed can make people feel depressed. People suffering from unemployment are more likely to turn to drug use, more likely to commit other types of crime (such as vandalism) and far more likely to commit suicide. These dramatic consequences must be avoided, and that is why the government will act to minimise the unemployment rate when possible.

It is worth noting that these problems are multiplied when a person is suffering from long term unemployment. This is a situation in which a person has been unemployed continuously for at least twelve months. Once a person has been out of the workforce for an extended period they will generally find it more difficult to re-enter the market.

Society: When people are unemployed, society suffers. We can look at this in either a theoretical or a practical way. You have already seen that people who are unemployed are more likely to be involved in certain types of crime. Often small acts of theft are committed as acts of desperation; a final attempt to meet the needs of an unemployed person. In the same way, graffiti is a form of expression for those who have no other avenue. (The picture that you see here is a famous example of stencil art - “Keep your coins – I want change”.)

From a theoretical perspective, unemployment suggests that our labour resource is not being fully utilised. There are people who are willing and able to work, but they are not able to find employment. As a result, an economy which suffers from high unemployment will always be operating well inside the production possibility frontier. Finding a way to allocate this productive resource ensures that total output will increase, and therefore living standards will improve.

Government: Both sides of politics in Australia have policies that allow for some form of financial assistance for those who are actively seeking employment. When the number of people who are unemployed increases, the cost of these programs will also increase. This may mean that the government needs to raise additional funds in taxation revenue. As a result there will be an impact on income tax rates.

The governing party will also seek to ensure that they are re-elected into office each time the Australian people are given a choice. History has shown us that if the unemployment rate increases between elections then the government is more likely to change. As such, avoiding high unemployment is also a priority for those who are hoping to maintain their political positions!

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