Year 11 Economics: Labour Markets Overview

Labour as a derived demand

When consumers demand higher levels of G & S, firms increase their level of output to meet the higher demand.

Labour Demand Curve

A graphical representation showing the relationship between the quantity of labour demanded and the wage rate.

Movements along the curve

Caused by changes in the wage rate.

Shifts in the curve

Caused by changes in factors other than the wage rate.

Buyer of labour

The firm that hires workers.

Seller of labour

The individual or worker providing labour.

Output of the firm

The total quantity of goods and services produced by a firm.

Factors affecting the demand for labour

Elements that influence how much labour a firm needs, including output, productivity, and costs of inputs.

Productivity of labour

The efficiency of labour in producing goods and services.

Cost of other inputs

The expenses associated with resources other than labour that are used in production.

Elasticity of labour demand

The responsiveness of the quantity of labour demanded to a change in wage rates.

Substitute for labour

An alternative input that can replace labour in the production process.

Impact on labour demand

The effect that changes in economic conditions or regulations have on the number of workers a firm needs.

Australia's economic growth rate doubles

Expected to increase the demand for labour due to higher production needs.

Compulsory Year 12 completion

May increase the skill level of the workforce, potentially affecting labour demand.

New building regulations

Could decrease the demand for labour in construction due to reduced project sizes.

Rental costs rise by 20%

Increased costs may lead to reduced demand for labour as firms cut back on expenses.

Purchase of new machines

Increases productivity, potentially reducing the demand for labour if machines replace workers.

Rising cost of capital

May lead firms to substitute labour with capital, affecting labour demand.

Rising labour productivity

Can lead to increased output, potentially increasing demand for labour unless offset by economic downturns.

Impact of offshoring

Shutting down local production can lead to decreased demand for labour in the domestic economy.

Labour Supply Curve

A graphical representation showing the relationship between the wage rate and the quantity of labour supplied.

Increase in Supply

A rightward shift in the labour supply curve indicating that more labour is available at each wage level.

Decrease in Supply

A leftward shift in the labour supply curve indicating that less labour is available at each wage level.

Factors Affecting the Supply of Labour

Various elements that influence the willingness of individuals to supply labour, including pay, working conditions, education, and mobility.

Pay and Remuneration

The compensation received by workers, which serves as a key determinant of labour supply.

Wages

The price paid for labour, influencing the incentive to work.

Non-Monetary Incentives

Factors other than salary that can influence a person's willingness to supply labour, such as working conditions and benefits.

Working Conditions

The environment and terms under which work is performed, which can affect labour supply.

Flexible Working Hours

A working arrangement that allows employees to choose their working hours, potentially increasing labour supply.

Holiday Leave Entitlements

Benefits that allow employees to take paid time off, which can enhance the attractiveness of a job.

Job Sharing

An arrangement where two or more employees share the responsibilities of a single job, which can increase labour supply.

Family-Friendly Policies

Workplace policies that support employees with family responsibilities, such as maternity and paternity leave.

Training Opportunities

Programs that enhance employees' skills and knowledge, potentially increasing the supply of skilled labour.

Mobility of Labour

The ability of workers to move between jobs or locations, which can affect the supply of labour in different industries.

Human Capital

The skills, knowledge, and experience possessed by an individual, which can limit or increase the supply of labour.

Skill and Expertise Requirements

The level of qualifications needed for a job, which can restrict the supply of labour in certain industries.

Availability of Education and Training

The accessibility of programs that provide necessary skills and knowledge, influencing labour supply.

Occupational mobility

The ability of workers to move between different jobs or occupations.

Geographical mobility

The ability of workers to move to different locations for work.

Participation rate

The percentage of the working age population that is part of the labour force.

Labour Force Participation Rate

A measure of the active portion of an economy's labour force.

Current rate

The present value of a specific economic indicator, such as unemployment or participation rate.

Unemployment Rate

The percentage of the labour force that is jobless and actively seeking employment.

Factors influencing participation rate

Economic conditions, aging population trends, retirement age, social attitudes towards women, and school retention rates.

Short term influence on participation rate

The state of the economy, with participation rising during economic growth and falling during recessions.

Long term influence on participation rate

Trends in the aging population and the age of retirement.

Changing social attitudes towards women

Shifts in societal views that impact women's participation in the workforce, including support for maternity and declining birth rates.

School retention rates

The tendency for students to remain in school longer and pursue full-time tertiary education.

Increase in Supply for Labour

Factors or conditions that lead to a higher availability of workers in the labour market.

Decrease in Supply for Labour

Factors or conditions that lead to a lower availability of workers in the labour market.

Occupational and geographic mobility of labour

The ability of workers to move across different jobs and locations.

Effect on equilibrium: Price

The impact of changes in supply and demand on the price level in the labour market.

Effect on equilibrium: Quantity

The impact of changes in supply and demand on the quantity of labour employed.

Government subsidy plan

A proposal by the government to provide financial support to businesses for hiring unemployed individuals aged 16-25.

Population size

The total number of individuals living in Australia, influenced by natural increase and net migration.

Natural increase

The growth of population resulting from the excess of births over deaths.

Net migration

The difference between the number of immigrants and the number of emigrants, impacting the overall population size.

Age distribution

The proportion of different age groups within the population, indicating trends such as an ageing population.

Ageing population

A demographic trend where the proportion of individuals aged 65 and over increases relative to younger age groups.

Education patterns

Trends in educational attainment that influence the quality of the workforce.

Workforce quality

The skill level and educational attainment of individuals within the labor force.

Economic recession

A significant decline in economic activity across the economy lasting longer than a few months.

Joblessness

The state of being without a job, often highlighted during economic downturns.

Industrial relations

The relationship between employers and employees, often involving negotiations over wages and working conditions.

Labor strongpoints

Areas or issues where a political party is perceived to have an advantage or expertise.

Political stereotypes

Commonly held beliefs about the capabilities of political parties regarding various issues.

Centrelink

An Australian government agency that delivers social security payments and services.

Great Depression

A severe worldwide economic depression that took place during the 1930s.

Economic management

The process of overseeing and directing economic policies and practices.

Voter perception

The beliefs and opinions held by voters regarding political parties and their effectiveness.

Queue outside Centrelink

A visual representation of increased unemployment, where many individuals line up for government assistance.

Spending commitments

Financial obligations taken on by the government, such as the $200 billion mentioned in the context of economic support.

Pressing problems

Current issues that are of significant concern to voters and influence political focus.

Job market statistics

Data that reflects employment trends and conditions within the labor market.

Economic indicators

Statistics that provide information about the economic performance and health of a country.

Labor party

A political party that traditionally represents the interests of workers and advocates for labor rights.

Liberal party

A political party that is often associated with free-market policies and economic management.

coronacession

A unique economic downturn caused by the COVID-19 pandemic, where non-essential businesses were ordered to close.

labour force

The total number of people who are employed or actively seeking employment.

narrow definition of unemployment

The criteria set by the Australian Bureau of Statistics, requiring individuals to be actively looking for work and ready to accept any job offer to be classified as unemployed.

JobKeeper wage subsidy scheme

A government initiative designed to maintain the employment relationship between employers and employees during the COVID-19 lockdown.

underemployment rate

The percentage of employed individuals who are working fewer hours than they desire, which rose from 8.8% to 13.7% during the observed period.

net job loss

The total number of jobs lost after accounting for jobs gained, which was almost 600,000 in the context of the pandemic.

total hours worked

The cumulative number of hours worked by all employees, which fell by an unprecedented 9.2% during the month.

nominal wage

The pay received by employees that is not adjusted for inflation.

real wage

A measure of the purchasing power of wages, adjusted for inflation.

inflation

The sustained increase in the general level of prices over a period of time, typically measured by the Consumer Price Index (CPI).

Consumer Price Index (CPI)

An index that measures the average change over time in the prices paid by consumers for a basket of goods and services.

job loss in April

In April, 900,000 Australians lost their jobs, while 300,000 gained employment, resulting in a net loss of almost 600,000 jobs.

hidden joblessness

The phenomenon where job loss is not fully captured in unemployment statistics due to individuals not actively seeking work.

lockdown impact

The effect of government-imposed restrictions during the COVID-19 pandemic, leading to many employers having reduced work available.

employment classification

The categorization of individuals as employed or unemployed based on specific criteria, affecting the reported unemployment rate.

job market

The arena in which employers seek to hire workers and workers seek employment.

April unemployment increase

The unemployment rate rose from 5.2% to 6.2% in April, despite a net job loss of 600,000.

workforce

The total number of individuals engaged in or available for work, which includes those on the JobKeeper allowance.

job search behavior

The actions taken by individuals to find employment, which can affect unemployment statistics.

attachment preservation

The goal of the JobKeeper scheme to maintain the connection between employers and employees during periods of reduced work.

job market analysis

The examination of employment trends, job loss, and wage outcomes to understand the state of the job market.

Non-wage outcomes

Non-wage outcomes refer to additional benefits such as significant value to employees but represent a cost to the employer. This does not appear in the average weekly earnings statistic and is difficult to quantify in monetary terms.