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Factors affecting the supply of labour

Factors affecting the supply of labour. Wage/non wage remuneration – supply of labour in different labour markets expands as benefits increase. As the labour market tightens nationally, upward pressure on wages occurs. This becomes a cause of cost-push inflation.

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Factors affecting the supply of labour

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  1. Factors affecting the supply of labour • Wage/non wage remuneration – supply of labour in different labour markets expands as benefits increase. As the labour market tightens nationally, upward pressure on wages occurs. This becomes a cause of cost-push inflation.

  2. Labour force growth –natural increase, immigration, age distribution and participation rate will all contribute to the size of the labour force.

  3. Labour force growth has been a crucial factor for the Australian labour market over the last 15 years. ie. The labour force has increased from 8.5 million to 11 million

  4. Participation rate - labour force X 100 working age pop 1 Male participation rate has decreased and female participation rate has increased. • Factors - State of the economy, social attitudes, school retention rates, retirement age

  5. Working conditions – hours, sick leave, holidays, LSL, danger, facilities ……..

  6. Human capital – Australia has an over supply of unskilled workers and a shortage of skilled, experienced workers. Skill, education and training are key supply factors in all professional labour markets

  7. Labour mobility – geographic and occupational mobility have become more important as the labour force becomes more flexible.

  8. Australian Workforce • Workforce = Labour force • All those over 15 years who are working or actively seeking work (unemployed) • Describe and account for the trends in Australia’s workforce over the last 10 years

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