The demand of labour by individual firms: * LABOUR- a derived demand:
Labour is a derived demand, this means that the original demand is for the goods and services and firms either demand more or less labour in relation to their business needs. IN other words, labour is demanded only because it is needed for the firm to produce goods and services and make a profit. * Factors affecting the demand:
1. Output of the firm: if a firm or business has a high demand for its goods or services then it will have a higher demand for labour. In general, demand for labour is highest in an economic boom and lowest in a recession 2. Productivity of labour: this means how efficient is each worker, productivity can be defined as the output per worker per unit of time. The more productive a worker, the more valuable he/she is to a firm. 3. Cost of other inputs: hiring labour is one of the biggest expenses for a firm which may consider all the other costs of production as well. Hiring workers involves substantial add on costs such as superannuation, workers compensation, insurance etc. sometimes, especially in manufacturing it may be cheaper to use machines rather than labour.
The supply of labour * FACTORS affecting the supply of labour:
1. Pay/ remuneration: the amount of pay given to employees attracts them to a particular job, there a other benefits such as a car (company car) that add to the attraction. 2. Working conditions: attractive working conditions encourage a higher supply of labour to a workplace. Positive conditions could include flexible working hours, pleasant work environment, travel opportunities etc. 3. Human capital: this refers to the skills, experience, education and training levels of staff. The total stock/ sum of all this is called human capital. The higher the level the easier it is to find a job because a skilled worker is more valuable in a developed economy than an unskilled worker. 4. Mobility of labour: this refers to the movement of workers between jobs (known as occupational mobility) and the movement of workers to a different area/ country (known as geographical mobility) 5. Participation rate: anyone over 17 and working one paid hour per week is considered employed. Anyone who is unemployed but is actively seeking work is still a part of the labour force. In total, the labour force is all the employed people plus those unemployed whom are actively seeking work. The participation rate is actually total labour force divided by the working age population, this means the percentage of the working age population that is part of the labour force.
The Australian Workforce
The workforce can be defined as the section of the population 15 years of age and above who are either working or actively seeking work. The workforce can be divided into two categories, the employed and the unemployed.
Characteristics of the Australian workforce
* Population size: approx. 23 million, therefore Australia has a small workforce. * Australia though does have a highly skilled and educated workforce by comparison to other countries. Data from Nov 2011: 86% in services (wholesaling and retail 15%, healthcare 11%, construction 9%, education 8%, professions 8%, hospitality 7% etc); 9% in manufacturing; 3% in agriculture; 2% in mining. Mining accounts for 2% employment but also 10% of overall GDP. * In last 40 years, all the net increase in national employment has come from the services sector. * Approx. 1 million people change jobs every year; 300,000 new businesses open up each year (many are small businesses) and 300,000 close down every year!
Age, Gender & Ethnicity
* Ageing is a general trend of the developed world, but with Australia’s higher birth rate it will not impact on us as much as some other countries such as Italy. Most people in the Australian workforce are aged 18 to 65. However, the older