WEEK 8
Labour Markets
The Australian Workforce
You will learn about the:
– unemployed
You will learn to:
Examine economic issues
Apply economic skills
Traditional economics sets out some basic premises. Let's think these through and see where they are happening in our everyday lives.
You will learn about the:
- definition of the workforce
– unemployed
- general characteristics of the Australian workforce
You will learn to:
Examine economic issues
- investigate recent trends in unemployment in Australia
- compare and contrast unemployment levels in different parts of Australia
Apply economic skills
- research an outcome of the contemporary Australian labour market
Traditional economics sets out some basic premises. Let's think these through and see where they are happening in our everyday lives.
- The size of the workforce is determined by the participation rate, population size and age distribution of the population
- The ageing population in Australia is a critical issue
- Unemployment refers to when someone does not have a job but is actively looking for employment
- There are different types of unemployment, including cyclical, structural, frictional and seasonal
- People may also be underemployed or hidden or become unemployed in the long-term
- There is a natural rate of unemployment, around 4.5%, referred to as the non-accelerating inflation rate of unemployment (NAIRU)
- Part-time work and the casualisation of the workforce has had a significant impact on the Australian labour market
The Workforce
Reference: Class text, p. 194
The workforce is the total number of people who are working or have the potential to work, sometimes also referred to as the labour force. It includes people who are working and people who are willing to work but are not employed.
The ABS regularly collects information on the labour force. Click on the image to find out who IS and IS NOT COUNTED. Record this important information in your workbook.
The workforce is the total number of people who are working or have the potential to work, sometimes also referred to as the labour force. It includes people who are working and people who are willing to work but are not employed.
The ABS regularly collects information on the labour force. Click on the image to find out who IS and IS NOT COUNTED. Record this important information in your workbook.
The participation rate measures the percentage of the working age population that is involved in the workforce. It is represented in this formula:
labour force X 100%
working age population (everyone 15yo +)
labour force X 100%
working age population (everyone 15yo +)
To be included as unemployed, criteria must be met. They include all people who were waiting to start work and were available to start in the reference week for the ABS survey. From April 1986, the definition of employed people was changed to include people who worked without pay between 1 and 14 hours per week in a family business or on a farm (i.e. contributing family workers).
The ABS undertakes the Labour Force Survey which covers approximately 0.32% of the civilian population of Australia aged 15 years and over. Households selected for the Labour Force Survey are interviewed each month for eight months, with one-eighth of the sample being replaced each month.
The ABS then calculates the total figures using this sample.
The ABS undertakes the Labour Force Survey which covers approximately 0.32% of the civilian population of Australia aged 15 years and over. Households selected for the Labour Force Survey are interviewed each month for eight months, with one-eighth of the sample being replaced each month.
The ABS then calculates the total figures using this sample.
Use the link "ABS January Key Figures" and answer these questions:
(a) In the summary table under "January Key Figures", how many people were recorded looking for work in January 2021? Answer hidden here (highlight to reveal): 875, 100
(b) In the same table, what is the recorded participation rate (seasonally adjusted) in January 2021? Answer hidden here (highlight to reveal): 66.2%
(c) Did people work more in December 2020 or January 2021? Explain your answer. Answer hidden here (highlight to reveal): Yes, the monthly hours worked in Dec-20 were 1,753 m ,while the number of hours worked in Jan-21 were 1,667 m. People were shopping for Christmas in December and in January, a Covid-lockdown occurred.
Read this information, from the same site:
How can employment AND unemployment increase together? Try and talk it out with another apprentice economist.
Click on the image "Median Weekly Earnings by Sex and Full-time or Part-time".
What conclusions can you draw from this graph?
Click on the image "Median Weekly Earnings by Sex and Full-time or Part-time".
What conclusions can you draw from this graph?
Source: ABS - Employee earnings, Australia, August 2020
On the same site, scroll through the following graphs and answer the questions following.
Median Weekly Earnings for Employees by State and Territory
Median Weekly Earnings for Employees by State and Territory
Look for:
Median Hourly Earnings for Employees by Occupation
Median Weekly Earnings for Employees by Industry
Median Weekly Earnings by Highest Educational Qualification
What are the characteristics of the highest paid workers currently in Australia, e.g. gender, state or territory of residence, occupation and industry, relevant educational qualifications and current working arrangements?
For EACH graph record an important characteristic of the Australian labour market.
For e.g. The median weekly earnings for employees in the ACT has increased by $194 to $1,450 since August 2015.
You can share your factfile with others to increase your labour productivity.
Median Hourly Earnings for Employees by Occupation
Median Weekly Earnings for Employees by Industry
Median Weekly Earnings by Highest Educational Qualification
What are the characteristics of the highest paid workers currently in Australia, e.g. gender, state or territory of residence, occupation and industry, relevant educational qualifications and current working arrangements?
For EACH graph record an important characteristic of the Australian labour market.
For e.g. The median weekly earnings for employees in the ACT has increased by $194 to $1,450 since August 2015.
You can share your factfile with others to increase your labour productivity.
How does this fit in our big picture model of Australia's economy?
Read "Our economy doesn't work for the common good", by Ross Gittins
[February 19, 2020] and then:
1. Consider what effect the gig economy will have on unemployment figures and if you will ever be able to buy your own house.
2. What would Gittins say about the contribution of the highest paid workers you described in the earlier question? Are they worth it?
[February 19, 2020] and then:
1. Consider what effect the gig economy will have on unemployment figures and if you will ever be able to buy your own house.
2. What would Gittins say about the contribution of the highest paid workers you described in the earlier question? Are they worth it?
I was reading yet more about the troubles besetting the rich economies when it struck me: we’d do a lot better if our politicians and their advisers just managed the economy in ways that gave first priority to benefiting the ordinary people who constitute it.
The bleeding obvious, you say? Well, of late, not so you’d notice. Just what we’ve always been doing, the pollies and economists say? Again, not so you’d notice. Too simple? Not if you do it right.
Economics is the study of “the daily business of life” – going to work to earn money, then spending that money. If so, the economy is nothing more than all those who work (paid or unpaid) and consume, which is all of us.
The fact that we are the economy means it’s actually our economy. So all the other players – politicians, economists, even business people – are there to serve our interests. Rather than becoming alienated from the process, we should be holding them to account.
During the past 30 or 40 years of what it’s now fashionable to call neo-liberalism, we were acting on the theory that the best way to benefit all Australians was to reduce the role of government in the daily business of life and give freer rein to businesses.
This indirect approach didn’t work well. We gave our bankers and business people greater freedom from government regulation, but they abused our trust. The lenience of regulators has seen business become remarkably lawless. Too much of the extra income the economy has generated has gone to the very highest income-earners, leaving too little going to middle and lower income-earners.
This era of “economic rationalism” and “microeconomic reform” has ended, leaving Scott Morrison with much damage to clean up. Meanwhile, many voters are disillusioned and distrustful of both main parties, and are turning elsewhere to populists such as Pauline Hanson, who not only have no answers to the problems that bother us, but also seek our support by blaming our troubles on unpopular scapegoats – Muslims, city-slickers etc.
The economic rationalists’ solution to misbehaving businesses, caveat emptor – let the buyer beware – is good advice but, in the modern complex world, it’s impractical. There aren’t enough leisure hours in the day for us to spend most of them checking that all the businesses we deal with aren’t overcharging us or taking advantage of us in some way, and our employer isn’t underpaying us.
So why don’t governments cut to the chase and simply make treating us in such ways illegal? And when doing so is already illegal – as it usually is – why don’t they resume adequately policing those laws?
Something almost everyone craves in their lives, but politicians and economists long ago lost sight of, is a high degree of security. We want the security of owning our own homes and we want security in our employment.
And yet we’ve allowed home ownership to become unaffordable to an increasing proportion of young people. Why? Because we’ve put the interests of existing home owners ahead of would-be home owners. We could fix the unaffordability problem if we were prepared to put the interests of the young ahead of the old.
The bleeding obvious, you say? Well, of late, not so you’d notice. Just what we’ve always been doing, the pollies and economists say? Again, not so you’d notice. Too simple? Not if you do it right.
Economics is the study of “the daily business of life” – going to work to earn money, then spending that money. If so, the economy is nothing more than all those who work (paid or unpaid) and consume, which is all of us.
The fact that we are the economy means it’s actually our economy. So all the other players – politicians, economists, even business people – are there to serve our interests. Rather than becoming alienated from the process, we should be holding them to account.
During the past 30 or 40 years of what it’s now fashionable to call neo-liberalism, we were acting on the theory that the best way to benefit all Australians was to reduce the role of government in the daily business of life and give freer rein to businesses.
This indirect approach didn’t work well. We gave our bankers and business people greater freedom from government regulation, but they abused our trust. The lenience of regulators has seen business become remarkably lawless. Too much of the extra income the economy has generated has gone to the very highest income-earners, leaving too little going to middle and lower income-earners.
This era of “economic rationalism” and “microeconomic reform” has ended, leaving Scott Morrison with much damage to clean up. Meanwhile, many voters are disillusioned and distrustful of both main parties, and are turning elsewhere to populists such as Pauline Hanson, who not only have no answers to the problems that bother us, but also seek our support by blaming our troubles on unpopular scapegoats – Muslims, city-slickers etc.
The economic rationalists’ solution to misbehaving businesses, caveat emptor – let the buyer beware – is good advice but, in the modern complex world, it’s impractical. There aren’t enough leisure hours in the day for us to spend most of them checking that all the businesses we deal with aren’t overcharging us or taking advantage of us in some way, and our employer isn’t underpaying us.
So why don’t governments cut to the chase and simply make treating us in such ways illegal? And when doing so is already illegal – as it usually is – why don’t they resume adequately policing those laws?
Something almost everyone craves in their lives, but politicians and economists long ago lost sight of, is a high degree of security. We want the security of owning our own homes and we want security in our employment.
And yet we’ve allowed home ownership to become unaffordable to an increasing proportion of young people. Why? Because we’ve put the interests of existing home owners ahead of would-be home owners. We could fix the unaffordability problem if we were prepared to put the interests of the young ahead of the old.
Some degree of flexibility in the job market is a good thing provided it works both ways. Under economic rationalism, the goal was more flexibility for employers without any concern about what this did to the lives of casual workers mucked about by selfish and capricious employers.
It’s good that part-time jobs are now available for those who want one – students, parents of young children, the semi-retired – but we could do more to make part-time jobs permanent rather than casual.
Many young people worry that we’re moving to a “gig economy” in which most jobs are non-jobs: short-lived, for only a few hours a week and badly paid, with few if any benefits.
I don’t believe we are moving to such a dystopia, mainly because I doubt it would suit most employers’ interests to treat most of their employees so shabbily. But, in any case, the way to avoid such a world is obvious: governments should make it illegal to employ people on such an unacceptable basis.
And governments will do that as soon as it’s the case that not to do so would cost them too many votes. That is, we have to make democracy work for the masses, not just the rich and powerful.
Of course, the security many of us would like is to live in a world where nothing changes. Sorry, not possible.
Economies, and the mix of industries within them, have always changed and always will – often for reasons that, though they disrupt the lives of some people, end up making most of us better off.
New technologies are a major source of disruptive, but usually beneficial, change. Another source of disruptive change is the realisation that certain activities are bad for our health (smoking, for instance) or for the natural environment (excessive irrigation and land clearing, burning fossil fuels) and must be curtailed.
Adversely affected interest groups will always tempt governments to try to resist such change – at the ultimate expense of the rest of us. The right answer usually is for change to go ahead, but for governments to help the adversely affected adjust. Just what we haven’t been doing.
Ross Gittins is the Herald’s economics editor.
It’s good that part-time jobs are now available for those who want one – students, parents of young children, the semi-retired – but we could do more to make part-time jobs permanent rather than casual.
Many young people worry that we’re moving to a “gig economy” in which most jobs are non-jobs: short-lived, for only a few hours a week and badly paid, with few if any benefits.
I don’t believe we are moving to such a dystopia, mainly because I doubt it would suit most employers’ interests to treat most of their employees so shabbily. But, in any case, the way to avoid such a world is obvious: governments should make it illegal to employ people on such an unacceptable basis.
And governments will do that as soon as it’s the case that not to do so would cost them too many votes. That is, we have to make democracy work for the masses, not just the rich and powerful.
Of course, the security many of us would like is to live in a world where nothing changes. Sorry, not possible.
Economies, and the mix of industries within them, have always changed and always will – often for reasons that, though they disrupt the lives of some people, end up making most of us better off.
New technologies are a major source of disruptive, but usually beneficial, change. Another source of disruptive change is the realisation that certain activities are bad for our health (smoking, for instance) or for the natural environment (excessive irrigation and land clearing, burning fossil fuels) and must be curtailed.
Adversely affected interest groups will always tempt governments to try to resist such change – at the ultimate expense of the rest of us. The right answer usually is for change to go ahead, but for governments to help the adversely affected adjust. Just what we haven’t been doing.
Ross Gittins is the Herald’s economics editor.