7/29/2019 Analyze the Impact of Changes in the Global Economy on the Labor Market in Australia

1/2

Analyze the impact of changes in the global economy on the labor market

in Australia?

Labor markets refer to the sum total of employment opportunities in the various sectors

of a given economy. Like any other country, Australias economy and financial markets,

have not been immune to changes in the world economy. With removal of internationaltrade barriers and increased communication between countries, international economic

integration has increased rapidly. Globalization has slowly moved towards a point

where expect sovereignty the world is interlinked. In addition with the global financial

crisis that occurred in 2008, financial markets collapsed and the global economy

suffered a significant blow. Also the setting up of industries and development of the

East Asian countries has generated wealth and created jobs in the global economy. The

Australian labor market is extremely dynamic and has significantly been affected by the

above changes in the economy.

Globalization has had an impact on the changing patterns of labor in Australias labor

market, increasing the overall welfare of the economy. It refers to the removal of

national barriers and an increase in international trade and communication betweencountries. Increasing globalisation has come about due to the easing of policy barriers to

trade and from technical change. These have lowered the costs of trade and factor flows.

In recent years global trading has escalated as globalization has made it easer to move

goods and capitals for countries. This has changed the Australian global market with the

addition of a new sector and information services and research and development

becoming more and more important. Australias tourism industry has in particular

benefited from globalization as more people are travelling around the world. This has

created more jobs and investment in service industry.

1. The substitution of labour for capital and technology in

industrialised countries (which helps skilled workers but not the

unskilled).

2. The effect of 'outsourcing' to low wage countries. Production

process require far less number of people which has caused a

decline of number of people needed to do the job in the

process.

3. Re-location of firms from high wage to low wage countries.

The Global Financial crisis caused a subsequent downturn in the Australian

economy having a negative impact on the labor force.

The development and industrialization of East Asia has triggered a demand for

industrial materials and resources and had a major impact on Australias labor market,

particularly in the mining sector. Over the years manufacturing has shifted to these

countries. General motors bring its vehicles from Korea. It has resulted in high prices for

Australias commodities and food exports as well as a high exchange rate. Australias

resources sector has had a rapid expansion. There has been an increase in Australians

propensity to buy assests especially houses. There is ongoing growth and demand for

services as incomes grow and population ages. High cost of labor in Australia. Like other

developing countires Australia has lost its manufacturing sector due to higher cost of

7/29/2019 Analyze the Impact of Changes in the Global Economy on the Labor Market in Australia

2/2

production. Very recently Ford has announced that that it will cease to produce in

Australia. They have moved their manufacturing from Australia. Even countries from

financial sector are outsourcing their work from overseas to save on their costs. It is

estimated that it is 4 times more expensive to manufacture in Australia than in Europe.

50 years ago there were economic and geographical boundaries. Gradually with passage

of time, trade barriers were eliminated and globalization took place.

Financial insitution went overboard

Impact of GFC

- financial instiuation couldnt meet their commitments and there was loss ofconfidence with people becoming conservative. No one knew what was the

stitution. The whole financial market came to a standstill.

In 2008 the government gave money to certain workers to sustain the businesses.

Government spent 2.5 million dollars on an insulation programme, giving free

insulation, to give jobs to so many people. Schools were given large sums of money.

Introduction

- Define labor markets and Australian labour market. It is important tounderstand Australias labour market. What is the break down of Australias

labour market and figures of employment in sectors. .

- World economy- Globalization. Definition. Transition in the past 50 years.- Recent changes in world economy- GFC. How it triggered? What it is?- Industrialisation of East Asia.

A classic example of changes in the world economy has occurred in the past decade.Australian labour market is the

Industrialization generates wealth and creates job opportunities

Like any other country Australias economy as well as financial markets, have not been

immune to changes in the world economy. Good management of a countries economy

can stil ensure safety.

Government became very liberal and banks went overboard since economy was doing

so well.