Generally speaking, markets are where goods and services are sold and produced. As labour is a factor of production, the labour market is therefore a factor market where labour resources are bought and sold. The Australian labour market is extremely dynamic responding to changes in economic conditions and policies. It is heavily influenced by trade unions, employer associations, federal and state governments, and state industrial tribunals. As the business cycle goes through its four phases, the labour market follows and is impacted. In Australia, the labour market is currently facing various issues, including unemployment, inflation and skills shortages. The majority of these current issues in the labour market are the reasons behind why wages are not only creeping up but essentially need to rise.
One of the distinctions of the Australian labour market is the low unemployment rate. Recently in late 2007 and early 2008, Australia hit this thirty year low unemployment rate of about four percent. For employers, the consequence of this low rate means it is more difficult to find suitable applicants for their available positions. This is because they don’t want to take a risk on hiring the unemployed as stated in the ‘Promises on Social Inclusion need policies to back them up’ article. As a result of this disregard of the unemployed, businesses and employers are offering and advertising higher wages in order to attract other workers to apply. In other words, they are “stealing workers”. Subsequently, this concept and accusation of “stealing workers” has meant the unemployed remain unemployed while the employed are benefiting from an increased opportunity to attain higher wages. Therefore the impact of this is that overall in the Australian labour market; wages are ...