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Economics > Labour Market Outcomes > Flashcards

Labour Market Outcomes Flashcards

1
Q

What kept wage equality smaller in the past?

A

In the 1980’s employees generally had their wages centralized by “Fair Work Commission”

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2
Q

What has made the gap larger in income since the 1990s?

A

The shift towards enterprise bargaining

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3
Q

Enterprise bargaining

A

Refers to negotiations between employers and employees (or their representatives) about pay and work conditions at the level of the individual firm

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4
Q

Income distribution

A

Refers to the way in which an economy’s income is spread among the members of different social and socio-economic groups

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5
Q

Trends that have occurred since the 1990s in wage outcomes

A
  • Inequality distribution growing
  • Top 20% of income recipients account for 40% of total income (x5 bottom quintile)
  • Top quintile has grown taking away from middle quintiles
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6
Q

What is a cause of income distribution within occupation?

A

Decline in union membership

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7
Q

Salary packaging…

A

Additionally benefits such as a company car, laptop, child care subsidies, gym

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8
Q

Superannuation

A

Is a form of saving that individuals cannot access until they reach retirement age.

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9
Q

Non-wage outcomes

A

Are benefits that many employees receive in addition to their ordinary and overtime payments, such as sick leave, superannuation, a company car, study leave or arrangements for hybrid working

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10
Q

Bonus cash payments…

A

Are on top of the employees normal wage and are a bonus coming from company profit performance or employee’s individual work performance

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11
Q

Improving flexibility in work patterns…

A

Working from home which saw a 1/3 of global population during COVID

Study leave, parental leave

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12
Q

Nominal Wage

A

is the pay received by employees in dollar terms for their contribution to the production process, not adjusted for inflation.

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13
Q

Real wage

A

is a measure of the actual purchasing power of money wage (that is, nominal wages adjusted for the effects of inflation)

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14
Q

Labour Productivity

A

refers to the quantity of output produced in a production process per unit of labour per unit of time.

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15
Q

Who is not given leave?

A

Younger workers
Part-time employees

Those working in accomodation, food services, forestry, fishing

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16
Q

Why is inequality good for the economy?

A

Increase in productive capacity which increases real GDP per capita.

  1. Encourages increase in education / skill levels
  2. Encourages labour to work longer / harder
  3. Makes them more mobile
  4. Encourages entrepreneurs to accept risks more readily
  5. Potential for higher savings and capital formation
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17
Q

Costs of a inequality in the economy?

A
  1. Reduces overall utility
  2. Can reduce economic growth
  3. Reduces consumption + investment
  4. Creates conspicuous consumption
  5. Create poverty + social problems
  6. Increase the cost of welfare support
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17
Q

Inequality of opportunity

A
  1. Perpetuate inequality of opportunity
  2. Not everyone has the same mental and physical attributes
  3. Wealth through inheritance
  4. Networks (migrants don’t)
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18
Q

Costs of a inequality socially?

A
  1. Wellbeing (crime, health, mobility)
  2. Social Class division
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19
Q

Unemployment

A

This refers to a situation where individuals want to work but are unable to find a job, and as a result, labor resources in an economy are not utilized.

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20
Q

What do you look at to see if people are better off over time?

A

The real wages

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21
Q

What will happen when the growth in real wages is higher than productivity growth?

A

The high labor costs will go into the business profits as the employees are not producing enough money to address the growth in labor costs.

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22
Q

Why might different occupational groups get different wages?

A
  1. Education / skill
  2. Working Conditions
  3. Occupational mobility
23
Q

Why might the same occupational groups get different wages?

A
  1. Various degrees of experience
  2. Geographical mobility
  3. Productivity of labour
  4. Capacity of the firm to pay
24
Q

What are the 3 main factors contributing to unequal pay in gender?

A
  1. Discrimination (glass ceiling)
  2. Interpruations in working life
  3. Working in lower-paid ‘segregated’ industries (childcare, nursing, teaching)
25
Q

What are the factors explaining the 2022, stat that women earn 70% of men

A
  1. More women work part-time
  2. Human capital factors - past attitudes about the role of women in society, females had fewer opportunities to acquire education, skills and qualifications.
26
Q

How much more do men earn on average in the same full-time occupation?

A

14.1% in 2022 which has dropped since 2014 at 19%

27
Q

What are the types of sources of income?

A
  1. Wages/salaries
  2. Government pensions + allowances
  3. Superannuation
  4. Investments
28
Q

How does education affect wage outcomes?

A
  • Higher wage
  • Rewards
  • Long time to obtain education which is reflected in wage
29
Q

Migrants in the Australian workforce

A
  • Higher salary than the national average
  • A higher level of skill
  • Recently migrated earn lower incomes than average Australians
  • Receive lower levels of rewards
  • Migrants from English-speaking backgrounds are likely to earn 10% more than average
30
Q

Indigenous Australians in the workforce

A
  • Less than average
  • 37% of the Indigenous population in the bottom quintile
  • 9% of the Indigenous population in the top quintile
31
Q

Why are there different wage outcomes?

A
  • Changes in the structure of the economy
  • New industries requiring new skilled labour which are willing to supply more to these workers than in a decling industry
32
Q

Why is there wage inequality within the same occupation?

A
  • Declining numbers of union membership
    -Shift away from centralized pay / ‘award’ pay
33
Q

List non-wage outcomes

A
  • Sick leave
  • Holiday leave
  • Bonus cash payments
  • Superannuation
  • Salary packaging
  • Flexibility
34
Q

What is salary packaging?

A

When the business gives employees:
- Company car
- Laptop/phone
- Childcare subsidies
- Gym membership

35
Q

What may be included in improving flexible working patterns?

A
  • Allowing time for study
  • Extended leave without pay
  • Leave to look after a sick family member
  • Allowing employees to share jobs
    -Extra parental leave
36
Q

How many employees were working from home during COVID?

A

1/3 globally

37
Q

Economic benefits of inequality:

A
  • Encourages the labor force to work longer and harder
  • Encourages the labour force to increase the level of education and skill
  • Makes workforce more mobile
  • Encourages entrepreneurs to accept more risks more readily
  • Creates a higher potential for savings and capital information
38
Q

Economic costs of inequality:

A
  • Reduce economic growth
  • Creates poverty and social issues
  • Reduces overall utility
  • Reduces consumption and investment
  • Increases the cost of welfare support
  • Creates conspicuous consumption
39
Q

Social costs of inequality:

A
  • Social problems (crime, suicide, mental illness, less mobile, lower life expectancy)
  • Poverty
  • Social class division
40
Q

What is included in the inequality of opportunity?

A
  • Wealth from inheritance
  • Not everyone has the same mental/physical capabilities
  • Network
41
Q

Someone that is actively seeking work must:

A
  • Regularly check advertisements from different sources for available jobs
  • Willing to respond to job advertisements, apply and attend job interviews
  • Be registered with any employment placement provider - Workforce Australia online
42
Q

Unemployment rate

A

The number of unemployed persons expressed as a percentage of the total workforce

43
Q

What are the 8 types of unemployment?

A
  1. Cyclical
  2. Structural
  3. Seasonal
  4. Hard-core
  5. Hidden
  6. Underemployed
  7. Frictional
  8. Long-term
44
Q

What causes cyclical unemployment?

A

Decline in the business cycle and the demand for labour is derviered

45
Q

What causes structural unemployment

A

A mismatch between the skills demanded by employers and those possessed by unemployed people. (old and new industries)

46
Q

Who is classified as having long-term unemployment?

A

People unable to find work for a 12-month long period or more

47
Q

What is fricitional unemployment?

A

People moving between occupations and jobs, this takes time.

48
Q

What is hard-core unemployment?

A

People who cannot work due to illness, physical disabilities or drug addiction.

49
Q

Who is counted as hidden unemployment and what causes this?

A

People who have given up on looking for a job or have returned to school.

Represented more in a reduction in the labour force participation rate rather than an increase in unemployment

Rises during a prolonged economic downturn

50
Q

What is under-employment

A

Indiviuals who have part-time / causal jobs but would like to work more hours per week. They represent as under utilised resources.
Rising due to increasing due to sharing of jobs

51
Q

How did Covid-19 effect employment? How did the goverment help?

A
  • Lead to a shutdown of bsiness -= sudden surge of unemployment
  • Peaked at 7.5% compared to US 15%
  • Goverement provided wage subsides fro around 3.5 million workers
52
Q

Part-time and casual employment

A

Part time: Emplyess regualry working less than 35 hours per week
Causual: Emplyees have occasional working hours but no set pattern

53
Q

Casualtion of work

A

The growth of casual employment as a propation of the total workforce.

54
Q

Benefits of part-time work for emplyees

A
  • Allows felxibility to balance other repsonbilites - family commitments
55
Q

Benefits of part-time work employer

A
  • Flexibility in amging labour costs
  • During busier times they can increase hours of staff without overtime costs
  • Dont need to give holiday, long serivce and sick leave + no reduant pay
56
Q

3 other types of works?

A
  1. Contractors
  2. Outsourcing
  3. Sub-contracting

Economics (9 decks)

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