STIR Labour Markets (Chapter 5) Labour Market is the need for supply and demand of products and services. ***List products and services you know Labour.

STIR

Labour Markets(Chapter 5)

Labour Market is the need for supply and demand of products and services.

***List products and services you know

Labour Market refers to the interaction between supply and demand.

How much do the people want in relation to how much can we give them?

In summer the demand for ice-cream, ice, icy-poles is greater than the need in winter. Have you ever

been to the supermarket to buy something and the shelves were empty of that product.

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The labour market also determines how many jobs there will be and the pay differences between those jobs

The workers wages is a reflection of the price of labour

Wages rise when there is high demand for workers and a short supply of workers

So in order to command high wages in the Labour Market a worker needs to possess skills, qualifications, experience and competencies that are in high demand but low supply.

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My experience When I taught overseas I was on a standard foreign wage of 3500 Chinese dollars for 20 hours work. Within 3 months I was offered a promotion to head English teacher with a pay rise of 500.

My organisation, planning, knowledge of English and how to construct a simple formulaic step by step instruction guide for the students was quickly recognised and in high demand in China.

Not only high demand but a rare commodity – you could not buy what I had to sell therefore when I signed a new contract I could ask for what ever I wanted as pay and they would pay it to keep me.

I had the power and control over my situation over my employer and used that to get a fair rate of pay equivalent to my skills and time for preparation of the curriculum.

In signing a new contract I was paid 6000 for the same 20 hour a week load of teaching, and a few extra perks such as a return flight home for Cody’s birthday and no rent.

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Labour Market can fall flat

This is where the supply is greater than the demand10 years ago there was a flat market of skilled labourers

An over abundance of tradies which meant there was no work for many of them and they had to seek other employment or retrain themselves in a different field.

At present there is a shortage of skilled labourers such as tradespeople

***List the trades you know

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People stopped going into trades, schools reduced its technical high schools, and the government reduced the enter score for universities to make it easier for people to get in and become educated professionals.

***List the educated jobs you know

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Today there is a shortage of trade labour and schools are re-introducing the tech component to accommodate for this shortage

There is a shortage of teachers and nurses also and universities have reduced the enter score so that people will take up these professions

The effects of the labour market impact on the economy and its infrastructure quite significantly through

•Wages•Prices •Availability •Education

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Computer tech is a rising commodity of demand but without the supply to match it; this is one area of the labour market that will create a flat market very soon. Who can …

* Build a computer* Network systems* Provide internet* Make/sell web pages* Programme systems

Many people can do these things already in ten year or even five … with the rate of people entering this profession will cause more supply than demand

Hence, a flat market.

People who choose this field of work will have to specialise and find a niche where they are in control.

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Further, the labour market differs between geographical regions

City vs. rural

In the city areas where there are 2 million people there is higher demand and therefore supply can usually be met

In rural areas the demand is on a smaller scale and the supply can be accommodated in most areas but is limited in medicine and other specialist areas

In rural areas of 20,000 or less people you might need 3 lawyers and accountants, 30 teachers and 5 police officers maybe 20 tradies because many farmers usually know how to repair their own machines.

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Other factors and reasons for differing employment opportunities and wages in different industries, occupations and regions of the Labour Market are

On the DEMAND side

The level of productivity requiring certain types of labour

Whether technology is being used to replace labour

Whether new technology requires new forms of labour

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On the SUPPLY side

•Size of working-age of the population* Current working age is 35 and 60

•Strength of workers union bargaining power and presence of industrial action to support it

* The new IR laws will affect workers opportunities as they have reduced workers power and reduced union action. When workers lose control and power to negotiate they quit. This creates a rise in demand and a

shortage of supply.

•Competency, skill, qualification and experience needed to perform the job

•Conditions of work – risk, location, unpleasantness

•Unique talents needed – talents of rock musicians, sport athletes, artists

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Labour Trends

Changes in the last 25 years have been aimed at making producers more efficient and even more competitive. These changes have impacted on job numbers, types and availability.

Changes in the business world

Technological revolution in production methods

In 1976 the first micro chip was inventedThis began an era of rapid technological change and the beginning of the computer eraWith this change businesses needed to integrate technology successfully or go out of business

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Structural adjustmentsDuring the 50’s and 60’s Australia had a comfortable economy without supply and

demand conflictWhen the labour government took over the running of the country in the 80’s they

wanted to shake up the economy and make it more internationally competitiveThey introduced the following

1. DEREGULATION – the ability for foreign owned banks to conduct business in Australia

2. REDUCED TARRIFS – to protect the Australian manufacturing industry Raised import taxes in the hope to promote buying Australian products

3. MICRO ECONOMIC REFORM in the transport and communication industries Introduced the buying of shares to increase Australian Dollar to benefit the Australian economy *Obsolete under the Liberal government with the sale of our utilities and

transport system to foreigners

4. INDUSTRY AWARDS – the restructuring of award wages and working conditions to protect workers from unfair employer actions. *Now obsolete under the Liberal government new IR laws

(Micro economics – looking at small parts of industry, workforce, supply and demand)

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Training reformThe trade sector was overhauled and workers could now be trained to do multiple tasksRefrigerator mechanics – trained plumber and electricianMotor mechanics – mechanical and auto electricians

Became obsolete under the Liberal governments removal of tech schoolsChange in Government (Labour) is re – introducing these skills

Enterprise bargainingSince 1991 there has been a move away from centralised industrial relations to enterprise bargaining.Individual workers had the ability to negotiate rates of pay, hours they worked and working conditions Under the influence of the Liberal government this new concept was rapidly supported and began to limit the power of the industrial relations commission (union officials)

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Decline in trade union membershipTrade unions influenced the rate of pay, hours, conditions, overtime, holidays etc during the 80’s and early 90’s

With the introduction of workers negotiating pay and conditions the memberships to the unions declined

The Liberal government took advantage of this situation and released a policy (law) to make union fees a choice for workers where previously it was compulsory

Workers were excited and many people chose to keep the money rather than pay the unions and their power in the work force declined as a result

This was the beginning of change to workers rightsSee next slide

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The unions could foresee the underhanded methods the government was taking but they were limited in the action they could take to oppose the new laws

If they strike, workers would be fired

Due to the new and exciting initiative to negotiate your working conditions

•workers right were minimised •contract employment entered the system•employers began to have the power•reductions in pay, holidays, overtime, special leave and hours of work were implemented

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Globalisation

By introducing deregulation and putting the dollar on the market Australia has become part of the world economy market – this is called globalisation

30 years ago this was unimaginable

Due to globalisation there has been a huge growth in South-East and Eastern Asian regions recognising Australia as a key target for business

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Overall labour-market trends

The demand for labour is affected by a number of factors we have already touched on

•new technology

•structural adjustments

•product markets – international and domestic

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Unemployment

The demand for labour has been insufficient to employ the entire Australian workforce in total

(macro economics – looking at the entire workforce)

In the last 30 years high and persistent levels of employment have emerged

In 1991 Australia went through a recession peaking at a 12% unemployment rate which it is yet to fully recover from which defines how many people are unemployed and unable to find work

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A recession may involve simultaneous declines in overall economic activity such as employment, investment, and corporate profits. Recessions may be associated with falling prices (deflation), or, alternatively, sharply rising prices (inflation). A severe or long recession is referred to as an economic depression. A devastating breakdown of an economy is called economic collapse.

•With Australia’s water crisis prices are going up and farmers are losing their crops

•With the introduction of increased import tax to preserve our economy and the current shortage of food, prices will continue to rise as we are reliant on other countries to supply us with goods

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Married women

The greater participation of married women in the workforce has also affected the supply of labour

There was a trend for married women to enter the workforce during the 20th century

But in the last 30 years this has increased rapidly and statistics show that 55% of the work force is married women

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Young people participating in education

The increase of young people staying at school until year 12 has risen from 35% to 75% over the last 30 years and university retention has been the same

This increase in education has reduce the number of full time employment participation by young people as a result

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Part-time work

Part time and casual work has become a more important part of the labour market

Currently 1 in 4 jobs are part time compared to 1 in 10 during the 60’s

Between 1990 – 97 part time work has risen 27% and continues to grow because part time work is compatible with study

Today 65% of full time students work part time

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Educational level of the workforce

The demand for educated workers has risen from 37% to 50%

Work based training has also risen since 1980 and continues to rise

Hours of work

There has been a trend to work more hours with some parts of the work force estimating 49 hours a weekPreviously the standard working hours were 38

The working hours above 38 are usually unpaid and worked by males

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Industry and occupational trends As economic trends develop, some industries and occupations provide less employment while others grow and provide more and new industries emerge and offer different opportunities

Employment levelOver the last 30 years employment levels have fallen in the following industries

•Manufacturing – especially Victoria•The utilities (gas, electricity and water)•Construction•Agriculture•The strongest growth has been in the service sector•Community services•Finance, property, and business services•Recreational, personal and other services•Wholesale and retail

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The growth of the service sector

In 1966 the service sector provided 54% of all employmentBy the mid 90’s it provided over 70%

This trend in continuing to rise with strong predictions being

•Health care•Community services•Retail•Personal and home care•Recreation and tourism•Education (as an export)

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Assessing job prospects

The labour market is dynamic and projected trends change over time.

When you are considering a job you should take into account the current trends and future predictions so that you can make an informed choice

Consider what interests you, your skills, qualifications, experience, aptitude and the requirements of the job before selecting.

Always remember that change in leader ship can impact the change in the labour market especially for education, training and immigration.

Focus questions page 66 manual…. Pp, 9 to 22 student manual