INTRODUCTION

This paper focuses on 3 current trends occurring in the Australian labour market, analysing their causes and effects. The chosen trends are structural unemployment, gender pay gap and skill shortage. The main causes of the first trend are increase demand for services and technological change, which have led us into a new era where highly skilled labour force is needed to operate more complex machineries and computer systems. The rapid technological change has caused structural unemployment, with workers willing to work but cannot because of their lack of required skills. The second trend, gender pay gap, illustrates how wide the pay gap between males and females is until today. The main causes of this current direction are the persisting stereotype of the male brad-winner, the feminisation of some particular industry and more importantly non-union collective agreement. The results of this general direction limit the potentials of the Australian national income and create a culture of discrimination. The third and last trend, skill shortage, is generated by cut in investment in skill development, difficulties in retaining the employees and variation of demand for labour. These phenomenons foster inefficiency and impossibility to produce at full employment of resources.

TREND 1: STRUCTURAL UNEMPLOYMENT

One of the major trends that can be noticed in the Australian labour market is the steady presence of structural unemployment. Most of the definitions found in the literature describes this phenomenon as strictly linked to technological change. The Essential Economics Encyclopedia (2004) defines structural unemployment as the hardest type of unemployment because it is caused by the structure changes in the economy rather than by changes in the business cycle (cyclical unemployment). The Australian economy has undergone an evolutionary process that brought significant changes to the core of its structure. In the 19th century, the Australian economy was mainly oriented towards primary production, with most of the labour force employed in agriculture and mining. The 20th century saw the progress of manufacturing but since the 1960’s the share of manufacturing industry in the economy has fallen. Service industry have grown strongly over the past 50 years, rising from around 60% of the total output in 1960 to around 80% recently. In affirming that service industries are generally more labour intense than manufacturing, mining and agriculture, the Australian labour market has significantly changed over the centuries (ABS, 2012). The main drivers of this evolutionary process have been technological changes. The development and application of new technologies, especially over the last 3 decades, have completely changed the skills required from the labour force. As described by Lewis et al. (2006), we have entered in the “New Knowledge” economy, in which progress in technology and the following knowledge intensity of economic actions, including information intense goods and services, need for highly qualified workers. An important evolution in the New Economy is the strengthening in the knowledge intensity of capital, labour, products and services, especially information-based tertiary sector. The prosper incorporation of new facts, information, and skills into the production procedures involve considerable alteration in the skill combination of employees. New scientific knowledge is inclined also to be interdependent to highly skilled workforce and a replacement for inferior skilled labour. Unfortunately, the Australian labour market does not respond quick enough to the new job’s prerequisites, creating a mis-match between the jobs available and the skill levels of the unemployed. Currently, structural unemployment continues to exists, despite strong employment growth. Another cause of this trend is the alarming increase in the period of time that unemployed remain unemployed. Although the long-term unemployment ratio decreased over the decades, those who remain unemployed do so for a significant longer period of time. Structural unemployment has been attributed to the high incidence of long-term unemployment, which leaves many lacking the skills needed to reenter the workforce. Furthermore, structural inefficiencies in the labour market originated by long-term unemployment, which weakens job capabilities, job search success and job preparedness (Lewis, 2006).

One of the effects of structural unemployment is work intensification. The few people qualified for the job are overloaded with work, being forced to work longer hours in the attempt on meeting companies’ targets. Almost 1\3 of full-time employees work routinely more than 48 hours per week, and 1\3 of these work frequently more than 60 hours per week (Peetz et al, 2003). According to the OECD report, Australia has the most substantial percentage of workers operating long hours in the OECD and it is now the 2nd longest working time nation in the advanced world (OECD report, 2012). On the other hand, 1 in 7 workers is underemployed: that means, they are employed for less hours than they want, and 1\4 of these have a part-time job because they cannot find full-time work, limited by their scarcity or mis-match of skills (Wilkins, 2007). Moreover, Australia has one of the biggest percentage of underemployment among developed countries as well as a remarkable amount of long term redundancy (OECD report, 2012).

TREND 2: GENDER PAY GAP

Although in Australia there is in place the fundamental belief in equal pay for work for identical value, the earning figures coming from the ABS shows a continuing gender pay gap (ABS 2012). One of the biggest obstacles to gender equality in Australian workplaces is the stereotype of the male brad-winner employed in a full-time job. It is an obstacle that restrains opportunities for female promotion, better pay and career maturation because it obstructs women rewarding work while disregards non-professional activities. Further, by tradition some low remunerated professions and fields like teaching, nursing and service industries such as retail and hospitality, are predominantly chosen and dominated by females, and that has meant drawing evident gender lines in the Australian labour market. These factors have encouraged unfairness in woman’s and man’s salary and working environment. Smith (2003) points out that females do have restrained bargaining power, delimited right of entry to bargaining structures and very little way in to over-award salaries because of their segregation into low paid jobs and fields. Australian tradition has seen female workers relying on minimum salaries and work settings provided by the award arrangements. Van Gellecum et al. (2008) states that more recently, however, awards have been downgraded to ‘safety net’ level, and they can no more be depending on delimiting gender wage dissimilarities. The appearance of non-union collective agreements as part of the enterprise bargaining has contributed to the broadening of gender pay gaps. These kind of protocols endangered female worker because of the lower union involvement in female- dominated fields and the necessity for union support for the assessment of women’s competences. (van Gellecum et al. 2008). Furthermore, Australia at Work (2010), after inspecting a wide group of economic and non-economic elements, become aware of a gender wage disparity of 8.2 per cent. This indicates that, all the rest staying unchanged (particularly age and schooling group) females receive 8.2% less than males when covering almost identical work positions. Less than 1\3 of the gender salary difference is justified by dissimilarity in attributes such as educational achievements, practical knowledge, geographical position, field and family structure. Of these characteristics, line of employment and statistical data (incorporating language used at home, family structure, and existence of reliant children) are the most notable characteristics in describing the gender wage gap. Even if the 2011 The Global Gender Gap Report (Hausmann & Tyson, 2011) ranked Australia 23rd out of 135 countries in its Gender Gap Index, in the last decade the increase in standard hourly ordinary-time income to each full-time employees in a non-managerial role was greater for man than women, culminating in a modest broadening of the gender wage gap.(ABS, 2005).

Cassels et al. (2009) found that the sex wage imbalance has a considerable consequence on Australia’s economic production. If wage divergences were narrowed completely, they have estimated that GDP would grow by around $93 billion per year. If they have estimated a bigger national income, other things being equal, it would create as a consequence an increased estimation of government tax revenues, more demand, more production, more employment and less money spent on welfare. Moreover the siblings of Australian female workers could benefit from the higher disposable income, having greater chances of getting a better education and healthier lifestyle.

TREND 3: SKILL SHORTAGE

A further evident trend in the Australian labour market is the skill shortage. The Department of Education, Employment and Working Relations (2006) describes skill shortages as situations where managers are incapable to substitute or have substantial complications in occupying vacant job positions, or rare specialized abilities requisites within that profession, at the present-day level of compensation and circumstances of employment, and in reasonably reachable geographical locality.
The idea of a shortage seems straightforward: the supply of labour is not adequate to meet the demand at present remuneration rates. But on closer inspection ‘shortage’ is a surprisingly slippery concept. The OECD (2003) pointed out that ‘… there are no objective measures or direct indicators of skill shortages’. Skill Shortage is a temporary circumstance, caused by the fact that markets do not calibrate instantaneously. Throughout this interval of modification there may be wage disparities, where supply and demand is not equivalent to the salary rates being offered in the economy (Trendle, 2008). The lack of competence can have numerous origins. These may include a widespread cut in investment in skill development, fast structural variation occurring with high levels of total employment, a cyclical decrease in unemployment in some parts of the economy and specific elements of weakness in the training system. Managers may also find that they are incapable of persuading the employees they need because the salary and job conditions on offer are unappealing. This will be perceived like a shortage to the managers in charge, even though the labour force as one entity has a sufficient supply of the competences at issue (Richardson, 2006). A shortage of skilled labour can be caused by an escalation in the demand for labour. The demand for work by employers can surge for many motivations. Conceivably, the most likely cause is a rise in the demand for the services or goods manufactured by the firm, considering that demand for labour is derived demanded (Wright, 2012). An additional justification for the rise in the demand for work is an increase in the prices of substitute elements of production. For instance, if the salary rate of skilled labour rises, the request for unskilled work might rise as managers are willing to replace the less skilled for the skilled workers. The demand for a given kind of work force will also augment if the price of a non-labour factor, such as equipment, rises and the workforce can be utilized as a replacement in the making procedure. A skill or workforce shortage in a certain market sector can also be created by reduced supply of labour. A possible explanation could be that the wages in different fields have increased, resulting in employees more attracted to another occupation (Trendle, 2008).

The pertinent literature shows a number of consequences of skills shortages. These effects incorporate the production of scarcer quality output (Mason, Van Ark & Wagner 1996), more moderate efficiency of employees and equipments (Haskel & Martin 1996), inflated salaries and the economy resolving into a low-skill equilibrium (Snower, 1996 and Haskel & Holt, 1999).

CONCLUSION

In conclusion, this paper has comprehensibly explained the main causes and effects of 3 particular trends occurring in the Australian labour market. It is precisely explained the impact that these trends continue to have on many aspects of the labour market and more broadly on the whole economy, giving prominence to the root of the trends.

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