CHAPTER 1 – INTRODUCTION
Unemployment is the most significant and the most disturbing crisis facing the world as whole recently, it is a tragic waste of human and economic resource. Once people are unemployed, they, their families, and the entire country lose. Workers and their families lose income, and the country loses the goods or services that could have been produced, also government face popular dissatisfaction creates stimulus for antigovernment activities, as well the purchasing power of these workers is lost, it can direct to unemployment for yet other workers and significantly drop the level of economic growth and economic development. Citizen believe their government makes policies, hence, public known the government is responsible for poor policies and economic situations, which lead to unemployment, as a result, parties must consider the employment as one of major issues to face (Case, 2006; Gordon, 2004; Pritchett, 1997).
What makes recent high unemployment rate cases perplexing is; over the last decade unemployment has significantly decreased on a global scale mainly through neoliberal economic policies and Keynesianism, but appears again recently. According to CIA Fact book 2010, global unemployment rate was 30 percent in 2007 for developing country and 4% to 12% for developed country. Australia with 5.4% on 2007, 4.3% on 2008, and 5.6% on 2009 was one of the best between developed countries. The Australian economy raised by 1.5% during the first three quarters of 2009 – the top performance in the Organization for Economic Co-Operation and Development [OECD]. Unemployment, formerly estimated to reach 8-10%, peaked at 5.7% in late 2009 and fell to 5.3% by February 2010.
Judging by the results, Australia’s born-again Keynesianism has been a great success; as one of only three OECD countries to avoid recession, Australia’s performance has been outstanding. In the government’s view, this was the result of public spending, ‘contributing around 2 percentage points to annual Gross Domestic Product [GDP] growth’ (Treasury Reports, 2010).
The influence of Australian parties on the economy and employment policies has grown steadily in this century, particularly since 1940 with the general acceptance of the Keynesian thesis that positive government action is essential to ensure a high level of output and employment. On May 30, 1945, The Australian Labor Party Prime Minister John Curtin and his Employment Minister John Dedman presented a white paper in the parliament called ‘Full Employment In Australia’ , the first time any government apart from totalitarian regimes had clearly committed itself to providing work for any person who was willing and able to work. Conditions of full employment lasted in Australia from 1941 to 1975 (Australian government reports, 2010).
With the upward of neoliberal policies in the 1980s, Australian politicians have identified unemployment as one of the important economic diseases. From the late 1980s on, many developed countries started to make economic policies and increase their influence on regulating markets, some implementing the right policies and some wrong policies. A sustained expansion policy in the Australia’s economy lasting now 17 years, has reduced current unemployment to unusually low levels down and running 17 uninterrupted years of economic-
 The British White Paper, Employment Policy, of 1944; the Canadian White Paper, Employment and Income, of 1945; and the US Full Employment Act of 1946.
-Growth seeing as 1992– approximating 3.3 a year. Australia’s per-capita GDP is delicately upper than the UK, France and Germany in conditions of purchasing power parity. Australia was ranked second – in the United Nations 2010 Human Development Index and 3th in the economist global quality-of-life index 2010, The 2007 OECD economic review cited; living standards in Australia go beyond those of all group of 8 member countries (CIA Factbook, 2010; Gordon, 2004; Dollar& Kraay, 2002 ; Meadows&Randers, 1973).
The Australian economy has experienced large changes in the structure of what it produces and how, these have been caused by technological change, housing market boom, by fuller integration into world markets and growing trade with China; places Australia in the top level of developed states in conditions of persistent rates of growth. In the case of Australia, unemployment has been an irritating, and sometimes intense, problem for the past 30 years. However, over the last decade unemployment has significantly decreased to approximately 5 percent. From an overall perspective recent problems are; youth unemployment, long-term unemployment, underemployment and poor employment opportunities for older workers and shortage of labor, especially skilled labor (International Monetary Funds reports [IMF] 2010; Australian Bureau of Statistics reports [ABS], 2010).
Annually, government spend billions of dollars for adjusting macroeconomic policies to gain better employment rate, macroeconomic policy is an important activity to Australian parties, they won or lost the election as a result of economic conditions. Accordingly, politicians attempt to create the most preferable economic conditions immediately before elections, even though their policies may require costly adaptation after the election (Sharkanskhy, 2002).
According to the recent research “Policy Agendas in Australian Politics”, Dowding, Et al. (2010) Attention to macroeconomic especially labor and employment matters have rocketed on over time. In 11 speeches between 1946 and 1973 the attention to macroeconomics averaged 11%. In the 14 speeches since then attention has averaged 15%. There is, however, some evidence here that attention to macroeconomics has waned. In the 2002, 2004 and 2008 speeches attention averaged 11%. Proportionately less attention was devoted to macroeconomics in 2008 than in any speech since 1959.
Poor policies and weak economic situation have effect on election, (Olson, 1996) has indicated that in developed democracies chances of reelection pended on the growth rate and the unemployment rate immediately before the elections. However, the most important effect is on economic growth; unemployment is very strictly associated to the level of economic growth. If the economy is growing fine, then there will be jobs formed to suit this demand. However, if growth pause and company, commercial business or corporations need to decrease production, then they will set people off (IMF reports, 2010; Sharkanskhy, 2002).
The costs of unemployment are doubtful, however three are highlights more: 1- individual 2-social 3-socio-political, those include; stoppage to pay mortgage or to pay rental fee possibly will direct to homelessness through foreclosure, malnutrition, disease, mental stress, and failure of self-esteem, piloting to depression. Ashley (2007) established that for every 10percent raise for unemployed there is a raise of 1.2% in overall death, a 1.7% adds to in cardiovascular disease, 1.7% additional suicides, 4.0% further arrests. Moreover, boost in crime rate and underemployment reducing the economy’s efficiency. High unemployment can persuade xenophobia and protectionism as workers alarm that foreigners are stealing their professions. On other hand political instability and lower economic growths increases popular dissatisfaction, creates stimulus for antigovernment activities (Farmer, 2002; Gordon, 2004; Dollar& Kraay, 2002; Wickens, 2008; Knotek, 2007; Abel & Bernanke, 2005; Prachowny, 1993).
The ability of political parties to be effective in the employment policy-making and implementation processes depends on two factors. First, they must formulate their own views of what the policies of a government should be; second, they must be able to ensure that their views about desirable policy are accepted as authoritative and are later implemented. To do the latter, they must be able to win office and control the machinery of government; there is little that a party in opposition can do to influence policy through parliament. At most, it can use public opinion, if it has the capacity; it can introduce new issues or make old ones more salient. In both stages, people must gain access to the processes (Althaus, Bridgman & Davis, 2007; Hawker, Smith & Weller 1979).
1.2 Statement of Problem
Although, most scholars focused on the economic and politics sources of habitual unemployment, this research focuses on policy analysis and comparing of parties employment policies in three major parties including; Australian Labor Party, Liberal Party of Australia and National Party of Australia, in 3 stages of policy cycle (agenda setting, adoption and formulation, decision making), as the researcher think unemployment cannot be explained solely by economic or politic approaches. Unemployment persists because policymakers are not willing to introduce the employment policies on time, politically they may not be capable of bearing the possible costs of unemployment in the short-term, and so they keep delaying it. Indeed Some employment policies never work. Others work occasionally and in some places. Still others cause additional problems than they resolve. On the other hand using policy cycle, which designed to promote a systematic approach to decision making, cannot guarantee excellent policy, but it does persuade rigor and avoid basic mistakes. This paper seeks to analyze and understand why and how policymakers keep on implementing various employment policies.
Unemployment not only has been a widespread economic problem with important repercussions, but also different approaches to this problem through history reflects shifts in economic and politic ideas. The case study of the Australian parties can provide a good understanding of the bases of success in eliminating persistent unemployment. Most of the debates on employment seem to have been settled in favor of the neoliberal view that favors employment over other economic and political goals. This study makes us more aware of the process of employment policymaking. An unemployment problem is an opportunity for development and progress for countries, employment policy for some parties is slogan of election, for others vital action.
Yet, individuals in the policy process must develop ways to approach new unemployment problems and to reconsider old ones; there are problems which do not give themselves to adjusting current practice or to applying other commons resolutions. Despite the fact, perfect rationality may not be obtainable, a cyclical approach to policy analysis at least make certain definitions, formulation, objectives and possible outcomes for a policy makers more simplifies. In solving unemployment problems, politic, social and economic frameworks are important but method such as policy cycle helps.
While, some scholars have studied the effects of the political regime (Pempel, 2000; Saurabh, 2006; Cheibub, 1998), and type (Kitschelt, 1992; Simon,1986), electoral and party system (Weede, 1983; Olson, 1996), The wisdom of economical approach and liberalization has been hotly contested by researchers around the world(Fischer,1993; Banerjee & Dutta, 1990; Wickens, 2008), despite some research evidence on potential efficiency of Keynesian (Bajada, 2005; Farmer, 2002). There are also, Political scientists devoted most of their time to studying what happened within the political system and employment policies (Alesina and Perotti, 1994), this paper is one of the few studies that study the parties’ employment policies in context of policy analysis. To the researcher knowledge, this study will also be the first one for case of Australian parties.
The wisdom behind of selecting a party instead of government was: the earlier a government (party’s one-step before they settle in office) becomes aware of the changes taking place in the economy; the sooner compensation action can be taken. Further, the more can be known about the impact of various policy measures, then, parties better able to determine which instruments it should use in any given situation and how they should be used. The permanence of Australian regime controls both the perceptions and expectations of those it connects. The same is right of the way policy is shaped; policy making in Australia is typically an incremental, bit-by-bit, and realistic activity, such policy skills, are essential for high-quality government and reduce the risk of silly alternatives.
From the literature review about Australian parties’ employment policies, several points can be observed. First, no significant research on comparison of employment policies in Australian parties have been documented yet, second, there is lack of knowledge on analysis of parties’ employment policies and last problem, there are no empirical study in context of policy cycles about employment policies.
1.3 Research Questions
1- What are the employment agendas of Australian parties?
2- How have these political parties choose these agendas? What are the processes?
3- In what manner do these political parties formulate their employment policies?
4- How do these political parties make a decision on their employment policies?
5- How do these political parties insure about the implementation of selected employment policies?
1.4 Research Objectives
1- To identify the employment agendas of these parties.
2- To find out how these political parties choose their employment agendas.
3- To understand how these political parties formulating employment policies.
4- To find out how do these political parties make decision about employment policies.
5- To find out how do these political parties ensure about the implementation of their employment policies.
1.5 Significance of the study
There are three major significances at this study:
Parties: the scope of this research is parties since a great deal of political scientifics written about unemployment policies in level of government, administrative or central bank, this paper going thorough parties, as researcher believe as earlier politicians becomes aware of the changes taking place in the economy, the sooner compensation action can be taken. Further, economic situation should be important for parties; politicians win or lose the office as a result of their economic policies.
Policy analyzing: A vast empirical literature written about unemployment in context of economy or politic, this paper investigates unemployment in context of policy analyzing. The more that can be known about the likely impact of various policy measures, the governments better able to determine which instruments should be used in any given situation, and how they should be used. Definitely, even the good economic or political ideology without good structure and base will be unsuccessful to achieve the goals.
Australia: this country is among developed countries with high rate of economic growth and acceptable rate of unemployment with strong economy, the permanence of Australian regime controls both the perceptions and expectations of those it connects. Moreover, Australia is a secure society; it has recognized no revolutions and hardly any eternally discompose displeasures. Its administrative control has grown-up and firmly established figure, the main parties were shaped early and have preserved their shares of votes with grand steadiness; the machines of administration has go through merely gradual modify; and even the issues of Australian politics have a long history for such a young country.
1.6 The Scope of Study:
The scope of analysis in this dissertation is the political party. While diverse kind of institutes, organizations, advocacies, interested groups and pressure groups are interpret in employment policy making, this paper only focus on what going on in side of parties with more attention to think-tanks inside of 3 major party of Australia included: 1-australian labor party 2- liberal party 3-the nationals. The period of this research (1996-2010) included two government; Liberal, Howard government with National coalition 1996 to 2007 and, Labor; Rude and Gilard governments 2007 to 2010- current.
In addition, reflecting the increasing attention paid to collaboration in governance studies, this study focuses on relations among party and parliament as well. It presents a basic idea of the process of employment policy decision making between party and parliament.
In term of policy cycle this study analyzed several steps in 3 stage of policy cycle including 1-agenda setting 2- policy formulation 3-decision making. The units of observation are member of think-tanks in those three parties. Assuming that they are most knowledgeable in employment policymaking, we can expect that their expertise can provide the most reliable and valid information.
1.7 Organization of the Study:
This dissertation is divided into five chapters. Chapter one consist of very brief background about unemployment and different approach to it, problem statement, questions and objectives of the study, and lastly, scope and organization of study spell out. Chapter 2 gives a review of important literature on Australian government system and parties. This review not only summarizes the major issues on Australian politics also explain about public policy making in Australia and policy analyzing.
Chapter 3 presents the methodology of this research and also introduces all methods and tactics used in this study and the sources of these variables. The use of cross-case methodology and the selection of cases are explained. The parties’ employment policies process finding, presented in chapters 4, this chapter explored these three parties’ employment policies in six parts. Part one gave the short history and background of each party.
Part two went through organization of these parties. Part 3 introduced employment agendas of each party. Part four is about process of employment agenda setting. Part five expressed employment policies formulation and finally part six explained employment decision making in parties and parliament and ways of controlling mechanisms.
The final chapter will summarize analysis of findings, cross case result, after making conclusions from these findings, implications and limitations of this dissertation will discuss to guide further research in the field.
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