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HSC Economics > Yr 11: Inequality & Unemployment > Flashcards

Yr 11: Inequality & Unemployment Flashcards

1
Q

The biggest 2 sources of income in Australia are…

A

1) Wages
2) Welfare

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2
Q

The biggest 3 types of welfare in Australia (in order) are…

A

1) Aged pension
2) Disability assistance
3) Family payments

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3
Q

How do you calculate the unemployment rate?

A

(Unemployed / Labour force) x 100

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4
Q

How do you calculate the labour force?

A

Unemployed + Employed

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5
Q

How do you calculate the labour force participation rate?

A

(Labour force / Working age population) x 100

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6
Q

A country of 600 people has 500 people aged 15 years and over, 300 people employed and 50 people unemployed. What is the labour force participation rate?

A

70%

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7
Q

A country of 600 people has 500 people aged 15 years and over, 300 people employed and 50 people unemployed. What is the unemployment rate?

A

14%

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8
Q

A country of 600 people has 450 people aged 15 years and over, 300 people employed and 30 people unemployed. What is the labour force participation rate?

A

73%

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9
Q

A country of 600 people has 450 people aged 15 years and over, 300 people employed and 30 people unemployed. What is the unemployment rate?

A

9%

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10
Q

Why is unemployment low in a boom?

A

The demand for labour is derived from the demand for goods and services, so if aggregate demand increases, the demand for labour will increase too

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11
Q

What is cyclical unemployment?

A

Unemployment due to low demand for labour in a downturn in the business cycle

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12
Q

What is structural unemployment?

A

Unemployment due to a mismatch between the skills people have and the jobs available

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13
Q

What is frictional unemployment?

A

Unemployment as people move between jobs

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14
Q

What is underemployment?

A

Someone who is employed but would like to work more hours

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15
Q

What is hidden unemployment?

A

Someone who is not looking for work (so not counted in the labour force or unemployment rate), but would take work if it was available to them

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16
Q

The 11 National Employment Standards are set by…

A

The Fair Work Commission

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17
Q

Which of these ARE National Employment Standards: The minimum wage, minimum weekly hours, maximum weekly hours, the ability to request flexible working hours, the award conditions

A
  • Maximum weekly hours

- The ability to request flexible working hours

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18
Q

Which of these ARE National Employment Standards: paid parental leave, notice of termination, paid annual leave, the right to non-discrimination, casual to permanent conversion after 12 months, provision of a uniform, redundancy pay

A
  • Notice of termination
  • Paid annual leave
  • Casual to permanent conversion after 12 months
  • Redundancy pay
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19
Q

What is an award?

A

The minimum working conditions for all workers in an industry

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20
Q

What is an enterprise agreement?

A

An employment contract negotiated between a firm and a GROUP of employees

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21
Q

How is an award created?

A

The Fair Work Commission creates it, and ensure it is at least as good as the 11 NES and the minimum wage

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22
Q

How is an enterprise agreement created?

A

It is negotiated between a firm and a group of employees, and must be sent to the FWC to check that it is better overall compared to the award (pass the BOOT)

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23
Q

In what circumstances can you negotiate an individual contract?

A
  • A high-income earner ($162,000); OR
  • There is no relevant award; OR
  • You are receiving all award conditions and then extra benefits
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24
Q

What is labour market decentralisation?

A

Reducing the government’s influence on employment contracts and allowing them to be negotiated between firms and employees

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25
What are 2 advantages of labour market decentralisation?
- Incentivises labour productivity | - Provides flexibility for firms to be more efficient
26
What is the main disadvantage of labour market decentralisation?
It increases inequality as low-skilled workers have very little bargaining power
27
What is a disadvantage of a minimum wage?
It makes firms less willing to hire people
28
What was the unemployment rate in 2019 prior to the pandemic?
5%
29
What was the unemployment rate in 2020 during the pandemic, and how did that compare to what economists expected?
7.4%, which was less than the 10% estimated by the RBA
30
What is the unemployment rate in 2023?
3.5% - the lowest it has been in 50 years
31
Why did unemployment rise in the pandemic?
1) Lockdowns caused consumption to fall by 20% 2) Exports of education and tourism collapsed
32
Why didn’t unemployment increase as much as expected in the pandemic?
1) Expansionary macroeconomic policy 2) JobKeeper – people who received it were counted as ‘employed’ 3) Hidden unemployment increased
33
Why has unemployment fallen so much recently?
1) High consumption following the end of lockdowns 2) Continued macroeconomic stimulus 3) Border closures causing a skills shortage in some industries
34
Inequality is measured using the…
Gini coefficient
35
A Gini coefficient of 1 means…
1 person earns all income in the economy
36
A Gini coefficient of 0 means…
All people in the economy earn the same income
37
What has been the trend in Australia’s Gini coefficient over the past 20 years?
It has remained steady around 0.31
38
The richest __% of Australians earn __ times as much as the poorest __%
The richest 20% of Australians earn 6 times as much as the poorest 20%
39
The richest __% of Australians own __ times as much as the poorest __%
The richest 20% of Australians own 64 times as much as the poorest 20%
40
What are 5 benefits of inequality?
1) Encourages education / skills 2) Encourages labour productivity and mobility 3) Encourages entrepreneurship 4) Creates savings for investment 5) A sense of fairness - people who are talented and work hard will be rewarded
41
What are 5 costs of inequality?
1) Reduces overall utility 2) Reduces growth 3) Increases welfare costs 4) Creates a poverty trap 5) Increases crime
42
What are 3 ways the government reduces income inequality?
1) Progressive income tax 2) Welfare payments 3) The industrial framework, such as the minimum wage, NES and awards
43
What is a progressive tax system?
As income rises, the PROPORTION of your income you pay as tax rises
44
What is a proportional tax system?
Everyone pays the same PROPORTION of their income as tax
45
What is a regressive tax system?
As income rises, the PROPORTION of your income you pay as tax falls
46
Is income tax progressive, proportional or regressive?
Progressive
47
Is GST progressive, proportional or regressive?
Regressive
48
Why is GST regressive?
As income rises, the proportion of income that is consumed falls. Therefore, the proportion of income that incurs the GST (a tax on consumption) also falls
49
Person A earns $50,000 and is taxed $5,000. Person B earns $100,000 and is taxed $10,000. Is this a progressive, proportional or regressive?
Proportional
50
Person A earns $50,000 and is taxed $5,000. Person B earns $100,000 and is taxed $8,000. Is this a progressive, proportional or regressive?
Regressive
51
Person A earns $50,000 and is taxed $5,000. Person B earns $100,000 and is taxed $12,000. Is this a progressive, proportional or regressive?
Progressive
52
Person A earns $50,000 and is taxed $5,000. Person B earns $70,000 and is taxed $8,000. Is this a progressive, proportional or regressive?
Progressive
53
Person A earns $50,000 and is taxed $5,000. Person B earns $70,000 and is taxed $6,000. Is this a progressive, proportional or regressive?
Regressive
54
The government raises the top marginal tax rate. The Gini coefficient would…
Fall
55
The government lowers the top marginal tax rate. The Gini coefficient would…
Rise
56
The government raises the tax-free threshold. The Gini coefficient would…
Fall
57
The government lower the tax-free threshold. The Gini coefficient would…
Rise
58
How is the Australian Government planning to change the tax system?
In 2024, the Government will abolish the 2nd highest tax bracket - reducing the tax rate charged for anyone who earns above $120,000 per year
59
How big is the gender pay gap in Australia?
According to the Workplace Gender Equality Agency, women earn around 23% less than men per hour on average.
60
In Australia, why do women earn less on average than men?
1) Unconscious bias 2) Choice of industries 3) Opportunity cost of experience when taking parental leave
61
What is unconscious bias and how does it cause the gender pay gap?
When hiring and promoting employees, managers often unconsciously compare candidates to those who have done the role in the past. As most senior positions used to be done exclusively by men, women are now less likely to be hired or promoted to these senior positions because they do not fit these expectations.
62
On average, people under 20 earn $_____ per week, whereas people aged 45-54 earn $_____ per week
On average, people under 20 earn $390 per week, whereas people aged 45-54 earn $1,550 per week
63
___% of non-English speaking migrants are in the poorest 20% in Australia, and ___% are in the richest 20% in Australia
24% of non-English speaking migrants are in the poorest 20% in Australia, and 14% are in the richest 20% in Australia
64
___% of English speaking migrants are in the poorest 20% in Australia, and ___% are in the richest 20% in Australia
17% of English speaking migrants are in the poorest 20% in Australia, and 24% are in the richest 20% in Australia
65
On average, medical professionals earn ____% of the full-time Australian median wage
On average, medical professionals earn 400% of the full-time Australian median wage

HSC Economics (39 decks)

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