Unemployment in Australia

area chart of Australia Unemployment Rate from February 1978 to August 2019

The picture is of Australia’s Unemployment Rate since the present series began in 1978. There are lots of ups and downs but let me point out a couple of features.

John Howard is elected in 1996 where almost immediately Peter Costello delivers his first budget surplus which he continues to do year after year until 2007.

The GFC occurs around 2007-08 at which point the unemployment rate rises sharply. The idea we have not had a recession for 25 years or whatever nonsense is the modern idiom is obviously untrue. Things start to improve, as they automatically do following a recession, except that we soon see the effects of “go early, go hard” on the labour market. A peaks is reached around 2015 and has been coming down slowly ever since.

Leaving it to the market is so out of fashion, but that is the answer, and the only answer. Public spending, which never adds to jobs, does however diminish productivity growth. That real earnings are falling is just part of the story when governments attempt to direct the economy without a positive return on investment part of the way in which the economy is being steered.

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