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Economics Year 11 > Labour Market > Flashcards

Labour Market Flashcards

1
Q

What is a labour market?

A

A place where employers and employees come together to bargain for labour in return for wages or wages in return for labour

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2
Q

Why is a healthy labour market important?

A

A healthy labour market will mean that labour provided by employees is efficient, and that workers are matched with jobs which match their skillset. Basically ensures productivity and increase GDP

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3
Q

What is derived demand?

A

Derived demand in terms of labour refers to the interaction between factor and product markets. Product markets send a message to businesses about certain final goods and services which are high in demand, and thus business requests more factors of production to keep up with demand

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4
Q

What are the three influences on the outputs of a firm

A

General economic conditions

Conditions in the firm’s industry

Demand for an individual’s firm’s products

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5
Q

What is productivity of labour?

A

Refers to the output per unit of labour per unit of time

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6
Q

What are the factors of productivity of labour? (5)

A 
Education
Skill
Health
Level of motivation
Technology
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7
Q

What are the five factors affecting supply of labour?

A

Pay/Remuneration

Working conditions

Human capital, skills, enterprise, education/training levels

Mobility of labour

Participation rate

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8
Q

What is the labour force?

A

A concept which refers to a pool of humans who are in employment

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9
Q

What is working age population?

A

Refers to the amount of the population who are of working age

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10
Q

What are the short term factors affecting participation rate?

A

Amount of pay, poor work planning

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11
Q

What are the long term factors that influence the participation rate

A

Gender, education, martial status, young children at home

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12
Q

How does government policy influence the supply of labour

A

It may provide certain incentives for people to either start working or for businesses to hire more people

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13
Q

What are 3 examples of government policy influencing the supply of labour?

A

Seen through the JobKeeper payments. The JobKeeper Payment is designed to help businesses affected by the Coronavirus to cover the costs of their employees’ wages, so that more employees can retain their job and continue to earn an income.

JobMaker Policy - incentive for businesses to employ young, by paying them up to $200 per week for hiring young people (16-35%)

Lower income taxes will motivate more people to start working

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14
Q

What is unemployment?

A

When an individual wants to work but aren’t able to find a job, and thus, not all labour resources in an economy are utilised

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15
Q

How does population size impact the size of the workforce?

A

It sets the limit to which the workforce can grow. Larger total population = larger potential workforce

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16
Q

Migration rates in the past decades?

A

around 40% of Australia’s population growth since WW2

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17
Q

How does temporary migration affect the labour market? (2)

A

Our economy is especially reliant on migration. This is able to be seen through the reliance on backpackers and international students to fill positions of hospitality, fruit picking. This is seen through the Working Holiday Makers scheme which promotes this

Migration is also good as it allows for migrants to transfer knowledge to our workforce

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18
Q

How does permanent immigration affect the labour market?

A

Aus normally accepts highly skilled immigrants, and thus a higher skilled workforce due to this immigration

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19
Q

What is the age distribution of the Australian workforce?

A

15-65 years old typically. People under 15 are in school, people over 65 are retired

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20
Q

What is a trend in the age distribution of the Aus workforce?

A

Increased ageing of population and less people under 15 working, means that the median age has risen from 31.1 to 36.8

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21
Q

How does education impact the workforce?

A

Improves quality of the workforce, with individuals that have higher levels of education earning much more income on average.

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22
Q

Has there been a change in demand for education from businesses?

A

Yes

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23
Q

What is the change in demand for education in businesses? (Statistics) (2000-2020) (Bachelor degree)

A

25.6% - 32.4%

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24
Q

What are the 4 main sources of income? with percentages

A

Wages and salaries (55%)

Business profits and capital investment (18%)

Property income (12%)

Government benefits (10%)

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25
What is the difference betwen nominal/money wags and real wages?
Nominal wages refer to pay received by employees in dollar terms and is not adjusted for inflation Real wages are the same as nominal wages but account for inflation
26
What is the relationship between productivity growth and real wage growth?
Stronger increases in productivity will lead to higher real wages, as employers can afford it and it will also be worth it for employers (because more productivity)
27
Give 4 reasons as to why wage differentials occur between occupations.
Different occupations require different levels of skills and education Reflect different levels of education and skills required to perform a job even if it is in the same industry Some occupations have less appealing working conditions Differences in demand for labour
28
What is occupational mobility?
Refers to the ease with which labour can move from one occupation to another
29
How does occupational mobility affect the supply of labour?
When occupational mobility is high, the supply of labour to that occupation is likely to be high, when occupational mobility is restricted, labour supply is less abundant
30
Why might there be wage differentials in the same occupation?
Productivity of labour Capcitiy of the firm to pay Age Gender Migrant backgrounds Indigenous backgrounds
31
How have wage increases changed since the 1980s?
Wages have grown to create much higher inequality and differences between wages in similar occupations due to enterprise bargaining
32
What is enterprise bargaining?
negotiations on pay and conditions conducted between the employer and employees in an individual workplace.
33
Why are there bigger gaps in income distribution within the same occupation?
Decline in union membership. With higher union memberships, wage outcomes tend to cluster for similar occupations, but the decline in union memberships have increased the enter[rise bargaining, and thus higher deviations
34
What are non wage outcomes?
Benefits that an employee receives outside of their ordinary wages, such as sick leave, superannuation or holiday leave
35
What are the economic benefits of inequality? (5)
Inequality encourages labour force to increase education and skill levels Encourages labour force to work longer and harder Makes labour force more mobile Encourages entrepreneurs to accept risks more readily Encourages potential for higher savings and capital formation
36
What are the | economic disadvantages of inequality? (5)
Reduces overall unity Inequality reduces economic growth Reduces consumption and investment Inequality creates poverty and social problems Increases cost of welfare support
37
What are the social benefits of inequality?
Might promote a desirable social structure. This would occur when productivity of individuals in a society was reflected by their financial position, so the more productive an employee, the more wealthy they would become. This would give employees incentives to work harder
38
What are the social benefits of inequality?
Might promote a desirable social structure. This would occur when productivity of individuals in a society was reflected by their financial position, so the more productive an employee, the more wealthy they would become. This would give employees incentives to work harder
39
What is structural unemployment?
Structural unemployment occurs due to a difference in the skills possessed by the unemployed and the skills needed by employers
40
What is cyclical unemployment?
Occurs when there is a downturn in the business cycle.
41
What is frictional unemployment?
Occurs when people change jobs from one to another
42
What is seasonal unemployment?
Happens due to a reliance on a specific time frame of the year for a job,
43
What is hidden unemployment?
Refers to those who have given up on employment or returned to schooling
44
What is underemployment?
Refers to those who ar employed but aren't able to work as many hours as they desire
45
What is long term unemploymeent?
Occurs when a person is unemplloyed for a period longer than 12 months
46
What is hard core unemployment
Refeers to those unable or deemed unsuitable for work due to reasons such as mental illness, drug abuse or disabilities
47
Explain the unemployment trends from 1960s to 2010
Unemployment was at a low rate in the 1960s, less than 2%, but raised much higher to almost 10% in the 1980s, due to a severe recession at the time. In the early 1990s, this problem was made worse with the structural change and microeconomic reform, with many being unable to find new jobs with skills suited for declining industries.
48
Explain unemployment trends from 2010 to now
The unemployment rates have stabilised to around 5-6%, due to the rate of economic growth allowing for enough jobs to be created at a rate to sustain this rate.
49
Why has there been a shift from full time work?
Several factors such as changes in business practices, differing economic conditions and introduction of different government policies. These different factors give businesses more flexibility in their choice of what kind of employment occurs, and largely moves from full time to casual or part time
50
What is casualisation of wwork?
Refers to growth of casual employment and this is typically followed by a decline in full time permanent jobs
51
What is outsourcing
Outsourcing also known as subcontracting occurs when an organisation hires another business to perform a function that it may not consider to be an essential part of their business.
52
Give three reasons as to why employees prefer part time work
Greater work life balance Flexibility to pursue other activities for employees Allows for employees to balance other responsibilities
53
Give three reasons as to why employers may prefer part time work
Allows employers to retain valued employees who might not want or isn't able to do full time Reduces costs for employers without reducing staff Employers attract candidates from wider employment pools
54
What are two disadvantages to moving towards part time?
Difficulty in scheduling meetings or coordinating projects Employees do not receive as many benefits as full time employees do
55
Why has contracting/ subcontracting / outsourcing increased?
It has increased as it allows for businesses to change their staffing levels more easily and more often, as business conditions change, which is beneficial as it allows for increased flexibility during 'troubling times'.
56
What are three benefits of casualisation of work?
Workers get higher flexibility Flexibility for employees with family or other commitments Flexibility for employers to increase or reduce staff as business demands change
57
What are three disadvantages of the casualisation of work?
Less job security Difficult for employees to plan for the future Less staff loyalty
58
What is a trade union?
Association of workers that aim to advance the interests of its members by improving their wages and working conditions
59
What is the role of the ACTU
Considered to be a 'national voice' of the trade union movement, and coordinates union activities across Australia and conducts campaigning and provides input to government policies
60
Why has union membership declined over time? (3)
Changes to wage determination (shift from centralised wage determination to enterprise bargaining, and thus unions have less influence on wage outcomes) Changes within industries (industries which have experienced high growth in recent years do not have a history of high levels of union membership) Changes in the nature of employment (Unions are always prevalent with full time workers, but the full time workers have decreased in the workforce
61
What is the role of a trade union?
Represent employee interest Exercise bargaining power in negotiations with employers Restricting supply of labour
62
What are employer associations?
Organisations which consist of employers whose activities include participating in the determination of employment conditions on behalf of their members (basically a trade union for employees)
63
What is centralised wage determination?
Occurs when government decides wages and conditions of workers within the economy
64
Does Australia have a centralised wage determination?
Yes we do. Since the early 20th century
65
How are wages determined in a centralised wage determination?
Determined through the influence of unions or when the economy experiences economic growth.
66
What is a decentralised system of wage determination?
Conditions and wages are being ngotiated at a workplace level through enterprise bargaining (employer and employee negotiations)
67
How are wage rises determined under the system of a decentralised wagesystem?
Wage rises occur through negotiations between individual workers and their employers
68
What is the Fair Work Act?
It governs the employee/employer relationship in Australia, and provides several 'safety nets', of minimum entitlements and prevents discrimination against employees
69
What are the maximum weekly hours?
Must not exceed 38 hours
70
What does 'flexible working arrangements' mean in the National employment standards?
Means that a worker can request for change in working arrangements
71
What does 'leave' mean in the national employment standards?
It means that employees have the right to paid annual leave, public holidays, carers and compassionate leave
72
What does notice of termination and redundancy pay mean?
Means that workers are required to give 1-4 weeks of notice for job termination, during this time they are entitled to redundancy pay
73
What are Industrial awards?
Awards are a set of pay and conditions that are specific to an employee’s work or industry sector.
74
What do industrial awards specify? (5)
``` Minimum wage Maximum hours of work Types of break/leave Superannuation Employment and termination procedures ```
75
What do flexible working arrangements include?
Different hours of work (diff start and finish hours) Different patterns of work (i.e. split shift) Different locations of work
76
What are common law contracts?
Common law contracts are contracts that are agreements between an employee and an employer, which allows for a different pay rate to the minimum award. However, it must be above the minimum wage at any time, the only exception being when pay rates are higher than $138,900, in which case the award is effectively replaced.
77
What is the disadvantage of the common law contract?
Does not ensure that employees are protected by government acts as it is not part of the formal industrial relations system but is confidential between employee and employer. Typically allows for the exploitation of workers through underpayment or poor working conditions

Economics Year 11 (9 decks)

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