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economics yr 12 > topic 4 labour markets > Flashcards

topic 4 labour markets Flashcards

1
Q

why do government’s intervene in labour markets

A
  • achieve macroeconomic objectives (e.g inflation)
  • Achieve microeconomic objectives (e.g productivity growth, increased competitiveness, resolving workplace disputes)
  • Achieve objectives relating to the distribution of income and wealth (e.g ensuring fair minimum working standards)
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2
Q

prior labour market

A

regulated through a mix of federal and state laws –> inefficient

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3
Q

current labour market

A

move toward a national industrial relations system since the 2009 Fair Work Act which:
- covers 9/10 workers
- federal power over all employees of incorporated businesses and its own employees (about 85% of the workforce)
- some states have “referred” (handed over” their power to federal gov

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4
Q

the national system is overseen by

A

Fair Work Commission.

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5
Q

Australia’s national wage determination system

A

directly covers 7/10 workers (9 million people)
fair work act sets out rules for 3 main streams:
- 38% are covered by some kind of collective agreement
- 38% are covered by an individual agreement
- 21% are covered only by industrial awards

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6
Q

those outside Australia’s national wage determination system

A
  • Individuals whose conditions are unregulated (17%) –> e.g independent contractors
  • Individuals whose conditions are regulated by the state workplace relations system (12%) –> e.g state public sector employees or WA employees of small businesses
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7
Q

minimum employment standards

A

Australian employees have 10 guaranteed conditions set out in the National Employment Standards including:
- max weekly hrs at 38
- right to request flexible working hours
- leave (paid and unpaid)
- Notice of termination and redundancy policy (1- 4 weeks) (entitled to redundancy payment)

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8
Q

minimum wages

A

A national minimum wage provides a safety net for any employee not covered by an award and is determined by the Fair Work Commission’s Minimum Wage Panel.
- reviewed annually
- consider social and economic objectives
- balance incentive and income inequality

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9
Q

awards def

A

Awards are a set of pay and conditions that are specific to an employee’s work or industry sector (such as a shop assistant or a construction industry worker) → Australia has different minimum pay rates in different awards
- set minimum rates of pay and entitlements
- set by fair work commission

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10
Q

past inefficient awards

A

awards were comprehensive documents outlining in detail the wages and working conditions within certain industries and firms
- has 4300 awards
- retail sector has 41 awards at 2082 pages

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11
Q

restructures efficient awards

A
  • decreased awards to 121 (107 industry based and 14 occupation based)
  • there are 156 modern awards in operation in 2021
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12
Q

modern awards

A

modern awards extend on National Employment Standards protections and tailor provisions to the needs of the specific industry or occupation.
- must include a clause that allows for an individual flexibility agreement (IFA)
- BOOT applies
- only made after employment is commenced

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13
Q

enterprise agreements def

A

The most common method of wage determination are enterprise agreements which are negotiated collectively between an employer (or employers) and employees, usually represented by unions.

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14
Q

as a minimum, all enterprise agreement must

A
  • Comply with National Employment Standards
  • Must pass the BOOT to ensure employees are better off overall by an agreement instead of an applicable award
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15
Q

for enterprise agreements the fair work act introduced:

A

employee right to bargaining power:
- Employees can enterprise bargain if majority of employees vote in agreement = collective agreements
- collective agreements cover 38% of employees
- collective agreements cover issues such as wage increases and other changes

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16
Q

individual employment contracts

A

Fair Work Act was the abolition of individual contracts known as Australian Workplace Agreements.
- gave employers higher bargaining power than employees

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17
Q

individual employment contracts for high income earners

A

here is an exception for employment of high income earners → they do not need these protections
- modern awards don’t apply to employees earning an annual $158,500 (set in 2021-22).
- make agreement with their employer called common law contract
- still follows National Employment Standards

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18
Q

difference between common law and enterprise agreements

A

Common law is made individually and cannot remove or trade-off minimum award conditions such as penalty rates.

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19
Q

where can disputes arise from

A
  • wages
  • Work conditions
  • Businesses restructuring
  • Specific actions of employers that are considered wrong or unfair
20
Q

disputes can lead to

A
  • strikes, in which employees withdraw their labour and refuse to work
  • work bans, in which employees refuse to undertake a certain aspect of their work
  • lockouts, in which employers refuse to give employees access to their workplace
21
Q

previous process for dispute resolution

A

Since early 20th century we used a unique system of specialist industrial tribunals
- Conciliation: a process whereby an industrial tribunal tries to help the parties to a dispute reach a mutual agreement
- Arbitration: when an industrial tribunal makes a ruling that resolves a dispute and is legally binding on the parties

22
Q

current process for dispute resolution

A

shifted to a system where employers and employees take responsibility for resolving their disputes. The Fair Work Commission only intervenes when:
- Compulsory dispute settlement terms: if parties can’t solve issue, third party is welcome
- Bargaining in good faith: if party is not adhering to 6 good faith obligation (e.g participating in all meetings)
- Resolving industrial action: extended periods causing economic disruption

23
Q

effectiveness of dispute resolution

A

been effective as levels of disputes and strikes have decreased

24
Q

centralised market def

A

wages and other labour market outcomes are primarily determined by a government, or a government-appointed tribunal such as the FWA

25
Q

decentralised market def

A

determines wage outcomes at an enterprise or workplace level, with a more limited role for industrial tribunals.
- replies on supply and demand
- more flexibility

26
Q

prior wage system

A

early 20th century = centralised system (from 1904 to 1956 = Commonwealth Court of Conciliation and Arbitration)

27
Q

current wage system

A

early 1990s = decentralised system
- increased flexibility so wages in efficient sectors increase faster
- wage increases can be tied to productivity growth = incentive
- from 1991, wages mostly set by enterprise bargaining

28
Q

arguments is favour of decentralisation

A
  • leads to more efficient resource allocation and structural change = efficient firms pay more hence attract higher skilled workers = increase output
  • promotes productivity = workers will be rewarded for their productivity improvements = decrease inflation –> Annual growth at 2.1% in 1990s and 1.2% in 2000s
  • keeps U/E flexibly low during recessions –> mid-2021 AUS was U/E was 7th lowest amongst OECD
  • despite income gap widening, Aus is working to increase wages for lowest income earners –> in the last decade rose by 32%, faster than overall WPI of 29%
29
Q

arguments against decentralisation

A
  • higher inequality through increased “wage dispersion” = workers working same job may have different wages = low skilled workers get lower wages
  • reflects bargaining power imbalance between employers and employees
  • enforcement of wage entitlements is difficult if decentralised
  • Centralised wage determination provides an additional policy tool that the government can use to achieve its economic objectives (e.g inflation)
30
Q

government education, training and employment program aims

A
  • increase workforce participation
  • Improve the productivity of workforce
  • Prepare workers for future changes in the labour market
31
Q

education, training and employment program policy use

A
  • funding individual employees to obtain training
  • subsidising employers for staff training
  • wage subsidies to encourage employers to hire specific workers
  • funding for employment agencies to place U/E people into jobs
32
Q

australia education and training reforms

A
  • 2012 Gonski Review
  • deregulation of universities
  • post COVID support
  • 2019 National Skills Commission establishment
  • Easier for students to get VETs
  • Early childhood education standards have been increased
33
Q

2012 gonski review

A
  • increase in equity = higher education outcomes
  • lift funding for students in disadvantaged areas
34
Q

deregulation of universities

A
  • Priority of education is to address the mismatch in the labour market between skills by a fast-changing job market
35
Q

post covid support

A
  • 2021-22 budget contained a total investment of $6.4B in expanded skills and apprenticeship programs
  • JobTrainer (free or low-fee training in digital skills and skill shortages areas)
36
Q

National Skills Commission

A
  • Identifies future skills needed and reforms prices of VET courses
  • Building the Jobs and Education Data Infrastructure (JEDI) project –> comprehensive info so VET system is up to date
37
Q

governments provide labour market assistance programs to increase participation by

A

addressing individual factors of:
- Disability
- Mental illness
- Language barriers
- Having been out of the paid workforce for a long period of time.

38
Q

labour market programs

A
  • employment service called jobactive or New Employment Services Model from July 2022
  • in 2020, JobMaker Hiring Credit establishment
  • Boosting apprenticeship placements program in 2021
  • 2021-22 several small policies
  • increased funding to decrease opportunity gap in regional Australia
  • Increasing subsidies for businesses to engage in individuals with a greater chance at long-term U/E
  • national minimum scheme of paid parental leave, 2011
  • increased childcare subsidies
  • Reducing high “effective marginal tax rates”
39
Q

New Employment Services Model

A
  • matches people to jobs and gives them adequate training
  • focus on digital engagement –> save around $200 million per year on the annual budget of around $1.3 billion
  • Jobactive achieved 1.6 million job placements during its first five years of operation to 2020
40
Q

JobMaker Hiring Credit

A
  • allowing businesses to claim $200 per week for new employees aged 16-29 and $100 a week for those 30-35 - reduce youth U/E
41
Q

Boosting apprenticeships

A
  • 2021 program to support 170,000 new apprentices and trainees, with a 50 per cent wage subsidy, capped at an annual rate of $28,000
42
Q

2021-22 budget policies

A
  • funding for Job Fairs across Australia
  • support for jobseekers in remote areas
  • entrepreneurship training
  • youth employment services
  • reform of the employment services market.
43
Q

Increased funding to decrease opportunity gap in regional Australia

A
  • 2019-20 budget expandd the Harvest Labour Services program
  • gives horticultural businesses subsidies to hire Australian workers for seasonal jobs
44
Q

Increased childcare subsidies

A

three months during the COVID-19 lockdown in 2020, Government covered full childcare cost = prevent permanent closing

45
Q

shifting to decentralised industrial relation relations system contributes to Australia’s economic outcomes through:

A
  • wage growth and inflation
  • Work practises and productivity

economics yr 12 (12 decks)

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