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ECONOMICS > topic 4- labour markets > Flashcards

topic 4- labour markets Flashcards

1
Q

what is derived demand

A

where the more consumers demand, the more businesses must supply and need more workers to increase supply

labour is derived demand(only want them to work because consumers want goods)

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2
Q

what is the productivity of labour

A

how much total output can be produced using a given amount of labour inputs and a given unit of time

labour productivity = total output/ total input

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3
Q

how does the productivity of labour affect in the short term and long term

A

short term- impact depends on the level of demand for goods and services
-if overall demand is rising at a faster level than the increase in labour productivity then businesses will increase the demand for labour to level the demand in the market

-if the overall demand is slowly increasing but increase in labour productivity, this will mean producers produce more goods and services than demanded causing to laying off, of workers

long term-

-if labour is slower than the other resources than the demand for labour will decrease and vise versa

i.e technological advancements

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4
Q

what is the firms output

A

the amount of product it sells

high out put = increase in sales, increase in production, and increase demand for labour

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5
Q

what affects the labour demand

A
  1. general economic conditions
  2. demand for a firm’s individual products
  3. conditions in the industry
    -industry conditions are bad= less sales =reduced demand for labour
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6
Q

what is aggregate demand

A

the total demand for goods and services within the economy

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7
Q

input factors affecting labour demand

A
  1. productivity vs other inputs

2.costs of labour vs other inputs

3.cost of labour vs cost of foreign labour

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8
Q

what are the factors affecting the supply of labour

A
  1. pay
  2. working conditions
    i.e holiday leave, flexible working hours
  3. educations, skills and experience requirements
    -certain jobs require a certain set of skills
  4. the mobility of labour
    -occupational mobility
    i.e skills required from an engineering moving to become a surgeon

-geographic mobility
includes travel, real estate, transport, social costs
i.e mining industry(remote areas far from airports, schools)(offer higher wages)

  1. the labour participation rate
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9
Q

what is the supply of labour?

A

the number of people who are willing to work right now

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10
Q

factors affecting the participation rate

A

state of the economy
-strong economy = better jobs = more people seek work = labour force increasing
ageing population
-retirement
social attitudes
-society has become more tolerant of women working

school retention
-how long people stay in education

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11
Q

who is counted as the labour force

A

people actively seeking work or are employed

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12
Q

how is the size and quality of the workforce affected (3 things)

A
  1. size of population(quantity)
    -larger population = larger workforce
    due to natural increase and net migration

-natural increase
more babies being born than death
a slow and steady increase

is considered declining whereby it’s growing a slower rate because families are having fewer children

-net migration
more migrations and Australians leaving

-fluctuates on economic growth and decline

2.age distribution(quantity)
15-65
baby boom –> the babies born after the way are now reaching 65

ageing population –> because decline in
birth rate and increasing life expectancy this has caused rise in population in those 65 and over outside the working population which is bad because there are less working age people to support the growing population of retired people

  1. education patterns(quality)
    -higher levels of education =contribute more to the economy
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13
Q

what does the supply curve show

A

it represents the amount that labourers work for wages

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14
Q

what is the leisure labour trade off

A

higher wages make people inclined to work until wages become so high they don’t need the extra money

the supply curve starts to curve backwards

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15
Q

what does the demand curve represent

A

represents the amount of labour, firms use

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16
Q

the law of diminishing marginal returns

A

each extra worker hired contributes less than the worker hired before them

employees should be hired if they generate more revenue than their wage

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17
Q

what is equilibrium

A

where the quantity of labour supplied equals the quantity of labour demanded by businesses

18
Q

how to calculate average weekly earnings

A

annual earnins /52 weeks

19
Q

what is nomial wages

A

the pay recieved by employees in dollars (raw numbers)

19
Q

what is real wages

A

nomial wages adjusted for inflation

20
Q

what factors affect wage out come

A

skill level

working conditions
occupational mobility
bargining power

21
Q

what influences wage differentials in the same occupation

A
  1. experience
  2. geographical location
  3. gender(gender pay gap)
    glass ceiling
  4. ethnic and cultural background
22
Q

what are the non wage outcomes that employees receive

A

all the benefits aside from income
called fringe benefits

  1. leave and superannuation

2.salary packaging
bonus extras -laptop, car for a reduced working salary

3.cash bonuses
extra money

4.flexibility arrangements
-study leave, parental leave

23
Q

what is distribution of income

A

the way in which income is spread among members of different social or economic groups in the economy

answer questions like

are the right getting richer
are the poor getting poorer

24
Q

what are the 5 different types of economic cost in income inequality

A
  1. reduces overall utility
  2. reduced economic growth
    -spend majority of their income(poor)

3.creates conspicuous consumption

4.creates poverty and social problems
-reduced labour force participation
-lower self esteem

5.increases cost of welfare support

25
Q

what are the 5 different types of economic benifits of inqueality

A
  1. encourages labour force to increase education and skills
  2. encourages labour force to work longer and hard

3.makes labour force more mobile

  1. encourages entrepreneurs to accept risks more readily

5.creates potential for higher savings and capital formation

26
Q

what are the social benifits inequality

A
  1. provides an incentive for individuals to work harder and acquire new skills
  2. those with higher incomes are most likely to donate to charity
27
Q

what are the social costs of inequality

A
  1. lower levels of wellbeing
  2. poverty cycle
  3. social class divisions
28
Q

what is inequality of opportunity

A

the reason that income doesn’t exactly match productivity or effort

  1. access to education
  2. personal attributes
  3. investments
    -family funds
    4.access to networks
    -less privileged people lack these networks
28
Q

what is the unemployment rate

A

number of unemployed people/total labour force x 100%

28
Q

what is unemployed

A

to be classified as unemployed you must be over 15, actively seeking work

29
Q

what are the 7 types of unemployment

A
  1. cyclical unemployment
    unemployment caused by a downturn in the business cycle
  2. structural
    caused by a mismatch between the skills demanded and the skills supplied by unemployment can be caused by new technology
  3. long term
    someone unemployed for 12 months or more
  4. seasonal
    unemployment due to a job not being available in certain season
  5. frictional
    the period after you leave your job but before you get a new one
  6. hardcore
    people considered unemployable by businesses
    i.e those severly disabled, criminals
  7. hidden
    where an individual is no longer seeking work(discouraged or disinterest) caused by prolonged economic downturns

8.underemployment
individuals who work part time or casually but would like to work full time(under utilised)

individuals who are over qualified for their jobs(barristers, yet have a degree in law)

29
Q

what is part time work

A

employees who work less than 20 hours per week

30
Q

what is casualisation of work

A

Australians are increasingly choosing casual work over full time work

31
Q

what is outsourccing

A

one business pays another business to perform a non-critical function

i.e. manufacturing in China

because cheaper labour

32
Q

what is contractors

A

independent contractors
-employed individuals who operate their own business and are contracted to perform work for others
-work when they are required
i.e gardener(once a week)

33
Q

what is subcontracting

A

primary contractor hires extra individuals(subcontractors) to help complete their contracted work

i.e business hires contractors to do one-off task

34
Q

unions

A

a group of workers aiming to advance the interests of its members by improving wages and working conditions

can be specific to
-occupation
-industry
-or generalised

they represent general employee interests
-giving legal advice to union members

excise bargaining power in wage negotiations
-organise employees to band together to become an effective bargaining force

35
Q

employer associations

A

the opposite of trade unions

-seek to coordinate the behaviour of member companies
-quasi-lobby groups that represent business on economic policy issues
provide advice, training and assistance to employers

36
Q
A
37
Q

what is industrial relations

A

sets the rules of how the labour market operates, including the process of wage determination and conflict resolution such as minimum wage to prevent abuse of power

ECONOMICS (5 decks)

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