Economics

i) Calculate the labour force participation.

Part time employment = 20% of total population = 1,300,000 x .20= 260,000

Total population employed in labour force= full time employees + part time employees = 416,364 =260,000 = 676, 364

I) Labour force participation rate = I

I =Total employment / working age population

I = 676,364/ 850,000 x 100

I= 79.57%

II) calculate the unemployment rate.

Total number of unemployment = working age population - Total population employed in labour force = 850,000 - 676364 = 173636

II) Employment rate = number of unemployment/ total labour force

II) 173636/ 676,364 x 100

II) 25.67%

Years: 2005 2006 Population: 1,300,000 1,300,000 Working age population: 850,000 850,000 Number of people Not in the labour force: 297,500 325000 Part-time employment as a percentage of total: 20% 20% Number of full-time employees: 416,364 416,364

Rate of underemployment: 37% 22.37%

Unemployment can fall without new jobs being created if:

People stop looking for jobs and move out of the labour force because they have been discouraging by their attempts of finding working. Therefore, lowering the number of people not in the workforce, which well have a positive effect on the rate of underemployment and the level of unemployment, because if you’ve been out of the labour force for more than a month before the statistics are gathered, you’re seen as unemployed. The effects of this complication happening will create a lower unemployment rate, but this isn’t a very accurate representation of unemployment.

List two reason why people might leave the labour force:

1. People become Unmotivated because of getting rejected or not keeping jobs.

2. Forced into one of the three forms of unemployment Frictional unemployment, Structural unemployment and cyclical unemployment.

Baby bonus:

The Baby Bonus will affect wages in the long run in a negative way, because of the potential over population and under-education of workers this scheme can produce. The average wage rate in Australia will decrease, because of the oversupply of employees, the employer will be able to drop the salaries and still obtain employees.

The effect that the Baby Bonus will have on the labour productivity within Australia can be seen as a positive effect with an increase in population in the workforce. The only drawback of this scheme is that if not enough jobs are available for these new workers coming into the labour force, the labour productivity will not increase and underemployment and unemployment rates will start to rise. As long as the government can use the growing workforce, efficiently the Potential and real GDP should increase.The Potential and real GDP in the situation could either increase or decrease, it depending on how productive the Labour force is. If the Labour force is very proactive and utilised correctly, an increase in consumption, investment and government spending should follow. This is created by the growth in population and utilisation of works, increases the amount of capital in the general public’s hands, which leads to an increase in consumption of general goods and service. The Increased population will also increase the number of utilities and accommodation needed, which will increase the Government spending and investing by businesses. All three of these factors will help to drive the Potential and real GDP forward. The biggest problem for the baby bonus scheme when it comes to GDP is obtained full employment to drive the economy forward.

The Baby Bonus scheme can lead to growth in real GDP, because of the facts stated above to do with the increase in consumption, investment and government spending. The growing population is the benefit of this scheme, but it can also be its downfall, by increasing the population too quickly your GDP per capita/ standard of living is going to drop. With a lot of the labour force working part-time or earning low incomes the general public’s stand of living will be quite small whereas the big business owns will find this scheme very profitable.

Free tertiary education:

With the Free tertiary education scheme wages will increase in the long run, because of the probability that the average education of workers in the labour force will be higher. The more educated/skilled workers will be able to find or request better-paying jobs.

Labour productivity will increase, because even if no new jobs have been created over the past few years the amount of skilled employees in or willing to enter the labour force will increase.

Potential and real GDP should grow as long as the new found education of the labour force is correctly used to effectively and efficiently produce goods and services within the Australian economy. The increase in education is believed to lead to a higher paying job, if this belief holds true, then the average employed person of the Australian labour force will have more disposable income, which should lead to an increase in the consumption within Australia. The drive for business’s to properly utilise their highly skilled workers should encourage them to invest in new technologies, which will increase the investment component of GDP. The Free tertiary education scheme should increase the growth in real GDP as long as the new found income is spent, which will boost consumption and not saved or invested within the stock market. The big bonus about this scheme is its potential to substantially increase the real GDP per capita, with a similar, but higher educated population the average Australian should be better of once the effects of this scheme have taken place.

The baby bonus should increase the population of the labour force, which can increase the growth rate. That is if the increase population is correctly used within the workforce. The possibility of the growth in population to create greater unemployment is high and might increase the unemployment and underemployment rates substantially. The higher education scheme will have a slow effect at the start, but as more and more people use this scheme to obtain a higher education and in theory a better chance of getting a well-paid job. This increases the number of skilled workers within the labour force, which should increase the amount of production within the labour force. Along with the increase in productivity without any tertiary education fees to pay off the workers will have more capital to spend increasing consumption.Free tertiary education is a better off scheme in the long run compared to the baby bonus, because it has fewer risks and increases the skills of the labour force with no cost to the general public which can increase spending.

Individuals Baby bonus: The baby bonus scheme would start off by giving families a helping hand, but as less finically inclined people start to try and take advantage of this scheme. individuals There attempts to better off their lives and not their children’s and other people around them would end up reducing the stand of leaving, because of overpopulation from these unemployed people or people in financial trouble.Free tertiary education should increase the standard of living by making high education more attainable for the less finically inclined people. This scheme has great potential to improve the skills of Australians labour force, but if these people with new skills/education don’t have jobs that utilise their skills the labour force isn’t being 100% productive and therefore the potential stand of living could be higher. This being said the free tertiary education study should have a positive effect on Australians stand of living, because of the potential increase in average wage rates and increase in a higher education general public.