What is the Labour Market?

The "labour market" refers to the system in which people who want work, find employers who want workers. This system is referred to as a market because it follows to a large extent the laws of supply and demand. When there are many people chasing few jobs, there is downward pressure on wage rates. Workers are forced to accept lower rates of pay in order to get job. But when there are many jobs available and only a few workers who want them, there is upward pressure on wage rates. Employers are forced to pay higher rates of pay to get workers.

However the labour market is not a perfect market and there are many other factors that intervene to prevent wage rates from dropping when there is an oversupply of workers for the number of jobs available.

Employment in Australia

Table 1: Total Employment
  Feb 2012 Mar 2012
Employed persons ('000) 11 459.2 11 465.7
Unemployed persons ('000) 626.6 626.8
Unemployment rate (%) 5.2 5.2
Participation rate (%) 65.3 65.3

Source: Australian Bureau of Statistics, Catalogue 6202

In March 2008, the total number of people in Australia with a job was 10,649,700. In March 2012, this total had increased to 11,465,700

In March 2008, the unemployment rate was 4.1%, and this was the lowest rate since 1978, when presents records began. The current unemployment rate is 5.2%. In the intervening years there has been an ongoing global financial crisis (GFC).

Employment by Industry

The following table provides an overview of employment by industry.

Table 2: Employment by Industry
  2008  2009  2010 
  000's % 000's % 000's %
Agriculture, forestry and fishing 364.0 3.42% 348.1 3.27% 354.0 3.32%
Mining 179.1 1.68% 168.2 1.58% 200.8 1.89%
Manufacturing 1010.3 9.49% 974.0 9.15% 983.5 9.23%
Electricity, gas and water and waste services 127.0 1.19% 121.9 1.14% 144.2 1.35%
Construction 988.7 9.28% 940.5 8.83% 1042.5 9.79%
Wholesale trade 378.8 3.56% 428.5 4.02% 409.0 3.84%
Retail trade 1186.9 11.14% 1176.1 11.04% 1242.9 11.67%
Accommodation and food services 684.3 6.42% 734.9 6.90% 752.8 7.07%
Transport, postal and warehousing 578.4 5.43% 555.4 5.21% 589.3 5.53%
Information media and telecommunications 220.8 2.07% 212.9 2.00% 210.9 1.98%
Financial and insurance services 379.1 3.56% 385.2 3.62% 386.8 3.63%
Rental, hiring and real estate services 205.0 1.92% 175.1 1.64% 208.0 1.95%
Professional, scientific and technical services 812.0 7.62% 826.5 7.76% 858.0 8.06%
Administrative and support services 340.5 3.20% 354.6 3.33% 429.8 4.03%
Public administration and safety 651.5 6.12% 657.1 6.17% 685.0 6.43%
Education and training 791.2 7.43% 821.1 7.71% 877.2 8.24%
Health care and social assistance 1106.6 10.39% 1172.2 11.01% 1286.0 12.07%
Arts and recreation services 194.1 1.82% 188.8 1.77% 195.8 1.84%
Other services 452.9 4.25% 424.0 3.98% 466.7 4.38%
Total persons 10651.1   10664.9   11323.2  

Employment Growth

Data from Table 2 has been used to provide, in Table 3 below, an indication of how industries are changing in terms of employment numbers.

Table 3: Employment Growth
Industries with increasing employment Industries with decreasing employment Industries with relatively stable employment
  • Health care and social assistance
  • Education and training
  • Administrative and support services
  • Mining
  • Accommodation and food services
  • Electricity, gas and water and waste services
  • Construction
  • Wholesale
  • Retail
  • Professional, scientific and technical services
  • Information media and telecommunications
  • Agriculture, forestry and fishing
  • Manufacturing
  • Information media and telecommunications
  • Agriculture, forestry and fishing
  • Manufacturing
  • Transport, postal and warehousing
  • Financial and insurance services
  • Rental, hiring and real estate services

 

Labour Market Trends

Downsizing

Self-Employment

Contract work

Employers are increasingly prone to hiring employees under fixed term contracts e.g. one year. This gives employers more flexibility to shape the work force when economic conditions are changing.

Training and education

A university education is more commonplace than 30 years ago. University graduates face stronger competition for jobs.

Workers need to return to training and education more frequently during their careers. As technology changes, workers have to be updated. Retraining is required when changing careers.

Working from home

Information technology has made it possible for many people to work from home and still be tied into the business computer network. Working from home has advantages for both employer and employee.

Advantages for Employee Advantages for Employer
Less expense of going to work No need to provide employee with office space and furnishings.
Time saved not traveling to work No need to provide employee with equipment

 

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