It is unambiguous that the Australian economy is in an enviable state. All the key parameters—inflation, unemployment, growth—are more or less where we want them. However, where Australia falls away from being a world leader is in the often forgotten measurement of underemployment.
The Syrian civil war officially began with demonstrations as part of the Arab Spring protest movement in March 2011. Forces opposed to the government, such as the Free Syrian Army, have been seeking to oust the Ba’ath Government and defend the violence against opposition protesters. According to the United Nations, more than 100,000 people have died in this conflict.
With the announcement for a proposed ‘boot camp’ for unemployed youth coming out of the Education and Employment Government ministries this week, youth unemployment policy looks set to be a major election issue this September.
Yet the ‘boot camp’ initiative has been overshadowed by a report published on Wednesday by Andrew Baker at the Centre of Independent Studies that accuses the Government of manipulating unemployment figures for political gain with serious macroeconomic consequences.
Hysteresis in the periphery
Recently, financial markets around the world have undergone a sharp correction in response to fears of an eventual tapering in the Federal Reserve’s Quantitative Easing program. The reaction was spurred by Ben Bernake’s, Chairman of the Federal Reserve, comments to the press that QE will be slowed if unemployment falls to 7% and inflation remains within their target. Cautiously this may be sooner than expected as the US economy is beginning to show sustained periods of healthy increases in employment growth.
However, the same cannot be said for the European Union. GDP in countries in the periphery continues to decline, with Italy suffering a 2.4% decline and Greece a 5.6% decline in the first quarter of 2013. Alarmingly it’s Italy’s worst recession in 20 years. With this persistently poor performance, comes the danger of hysteresis.
In my first article as a writer for ESSA, I wrote about how the unemployment rate was going to have a significant impact on President Obama’s re-election chances.
In the 2 months since that article was written there have been some significant developments in the US economy and in the political sphere as we approach the Presidential Election.