Key Highlights
- The unemployment rate in Australia has dropped. Despite the fact JobKeeper’s wage subsidy has ended, over 30,000 workers have lost their jobs.
- Unemployment reduces a family’s disposable income, erodes purchasing power, lowers employee morale, and reduces economic output.
- In February 2021, the unemployment rate in the OECD area dropped to 6.7% from 6.8% in January.
What is Unemployment Rate?
The unemployment rate is defined as the percentage of the workforce that is unemployed. It’s a lagging indicator, which means it rises or falls in response to changes in economic conditions. The unemployment rate is likely to increase when the economy is in bad shape and jobs are scarce. It is supposed to fall as the economy is expanding at a healthy pace and jobs are abundant.
The Economic Effects of Unemployment
The unemployment rate is the percentage of people who are out of work. Unemployment decreases a family’s disposable income, erodes buying power, lowers employee morale, and lowers the economy’s production. A high-unemployment economy is not effectively utilizing all of its resources, especially labour. When people embrace jobs that are below their ability level, the economy’s productivity suffers even more. Workers’ abilities deteriorate, resulting in a depletion of human resources. Unemployment rates that are too high can lead to civil unrest in a country.
Stats Improve for Australia
Over 30,000 people lost their jobs when the JobKeeper wage subsidy ended—despite that, Australia’s unemployment rate is decreasing. The official ABS jobs figures for April show a drop of 30,600 people in employment. It is the first month of data since JobKeeper ended in late March. The unemployment rate, on the other hand, continues to decline, dropping from 5.7% to 5.5%, owing to a significant drop in the number of people looking for jobs. Some of the 31,000 job losses could be attributed to the end of JobKeeper. It could also be due to normal month-to-month fluctuations in the labour market, as well as some larger-than-normal seasonal shifts. It’s down 2 percentage points from its high of 7.4% in July 2020.
World Unemployment Rate of Various Countries
The unemployment rate in the OECD region fell to 6.7% in February 2021 from 6.8% in January. It remained 1.4 percentage points higher than it was in February 2020, before the COVID-19 pandemic entered the labour market. In February 2021, the euro area’s unemployment rate remained constant at 8.3%—1.0 percentage point above its pre-pandemic level. In February 2021, the unemployment rate in the United States dropped slightly to 6.2 %, from 6.3% in January. It fell 1.2 percentage points in Canada, to 8.2%t. Israel’s unemployment rate rose by 0.5 percentage point to 5.1%. In Japan, its 2.9% and Mexico’s rates remained unchanged at 4.5%.
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