 Paid work: involves the labour market  The labour market is an institution where buyers (govt, businesses and firms) and sellers of labour (workers) negotiate wages and working conditions.  Why do some occupations receive higher wages?  Unpaid work: involves a volunteer providing help in the form of time, skills or service for no wage or renumeration

 ABS conducts a monthly labour force survey with a sample survey of less than 0.45% of the population of Australia.  Using responses from this survey the ABS classify people into various categories of the labour market.  The definitions the ABS uses to classify people in the labour market are.

 Labour force: comprises of the civilian population aged 15 years and over who are able and willing to work. It includes those who are classified as: ◦ Employed (full-time or part-time), and ◦ Unemployed

 Employed are defined as people aged 15 and over who, during the reference week: ◦ worked for one hour or more for pay, profit, commission or payment in kind, in a job or business or on a farm; or ◦ worked for one hour or more without pay in a family business or on a farm;

 Employed are defined as people aged 15 and over who, during the reference week - Continued ◦ were employees who had a job but were not at work and were:  away from work on holidays  away from work as a standard work or shift arrangement; or  on strike or locked out; or  on workers' compensation and expected to be returning to their job; or ◦ were employers who had a job, business or farm, but were not at work.

 Unemployed are defined as people aged 15 and over who were not employed during the reference week, and: ◦ had actively looked for full-time or part-time work at any time in the four weeks up to the end of the reference week and were available for work in the reference week; or ◦ were waiting to start a new job within four weeks from the end of the reference week and could have started in the reference week if the job had been available then.

 Persons not in the labour force are defined as:  people aged 15 and over who were neither employed nor unemployed. They include: ◦ people who were keeping house (unpaid); ◦ people who were retired, ◦ voluntarily inactive, ◦ permanently unable to work; ◦ people in institutions (hospitals, jails etc.);

 The unemployment rate expresses the number of unemployed people as a percentage of the labour force. Unemployment rate = (Unemployed/ Labour force) X 100

 Participation Rate: is the percentage of the population 15 years and over who are either actively employed as part of the labour force or are actively seeking employment =  Participation rate = (employed + unemployed)/ Pop 15+) x 100  The participation rate expresses the number of people in the labour force as a percentage of the population aged 15 years and over.

YearEmployedUnemployedPopulation 15+ Labour force Unemployment Rate Participation rate

 Unemployment: a situation in which some who are actively seeking work and are willing to work are unable to find gainful employment.

 There are two main categories of Unemployment  Cyclical unemployment  Natural unemployment:

 Cyclical unemployment: unemployment caused by insufficient aggregate demand in the Economy during slowdowns or recessions in the economy as shown by the business cycle. Increasing Unemployment

 Natural unemployment:At any given time there will exist a group of people who are willing to work and are actively seeking work but are unemployed.  Natural unemployment is the lowest level of unemployment that we can achieve without experiencing inflation.  Approximately 4% of unemployment is natural

 There are 4 types of Natural Unemployment  Structural Unemployment: a rise in unemployment caused by changes in the structure of production. Because different skills are required, some workers become redundant  Cause of Structural Unemployment: ◦ Business Relocation ◦ The effect of globalisation and tariff cuts ◦ Government microeconomic policies ◦ Industries requiring a low cost base to survive in a high cost country

Australian products no longer produced

 Frictional unemployment: exists when people are unemployed between finishing one job and starting another job.  Eg. An electrician has a contract to put light fittings in a new building. Once that contract is finished he is unemployed until he finds another contract with work.

 Seasonal unemployment: results form the termination of jobs at the same time each year due to the regular change in the season.  E.g. Ski teachers in winter in Thredbo, surf schools in summer at Torquay

 Hard core unemployment- is often the result of personal attitudes, limited skill level, illness or other problems that may be make it difficult for the person be employed.  Long term unemployed more than 1 year = 162,000 (20.1% of unemployed)