Al most the developed countries have been prosecuting in economic reforms in the first two decade of 20th century. New Zealand was acclaim as an outstanding example of this trend. The results of this reforms was stated on the interest rates were relieved, the limitations of international capital had been removed, the currency was floating freely in money markets and agricultural subsidies and tax incentives had been removed. The economists in New Zealand have the optimistic about the success of these reforms (DALZIEL, 2002).
In fact, there have been improved the productivity of many sectors, especially in the government trading and in and in macroeconomic stability. The most important contributed of those reform in macroeconomic was a stability of price and fiscal balance. However, many proponents argued that at the time the government engaged in supply –side economic, they leaded to the unbalance of the society (DALZIEL, 2002).
This paper will indentify the similar and different of the unemployment rate of New Zealand which could be a result of the reforms in economic from 1986 to 1993 and 1993 to 2002.
Firstly, in both of graph, there was a dramatically change in unemployment rate of New Zealand. To make it clearer, it is can be seen in first graph the unemployment rate increased sharply, from 4% in 1986 to around 9, 8 % in 1993, particularly it spiked at 10% in 1991. Likewise, the second graph shows the enormously change in unemployment rate from 1993 to 2002 in New Zealand. There was a rise in employment level, which obviously showed in the second graph. In detail, the unemployment rate declined gradually from around 9, 8 % in 1993 to 5 % in 2001 and remained to 2002.
Unemployment means lack of jobs even for those who are able and willing to work at the prevailing wage. The unemployment may be defined as the gap between the potential "full employments" and number of employed persons. Full employment is a condition of the national economy, where all or nearly all persons willing and able to work at the prevailing wages and working conditions are able to do so. ...
This change in the first graph may reflect the fact that the productivities was increased by reduce the affect of trade unions and rise the competition for the jobs available – thereby forcing down real wages during the economic reforms (Treen ,2013).
In the next graph, these statistics seemed to indicate that the labor force adapted the open economy. They could able to accept the part time job or increase their skill and knowledge. The only noticeable difference between the two graphs was a tendency of the unemployment rate.
The first graph showed the upward trend of unemployment rate, however, the next one shown the downward trend of the unemployment rate. This is not surprising as a government and firm as well as the labors made their own changed. In my point of view, the trend of unemployment rate could be remained the same trend in second graph after 2002. In conclusion, the New Zealand capitalism competitiveness increased by reducing the costs in relation to other countries then the economy would begin to grow strongly. That could be a reason for the differences in the unemployment rate trend in two graphs.