(PDF) Economics Solution Assignment
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Added on 2021-06-14
(PDF) Economics Solution Assignment
Added on 2021-06-14
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Running head: ECONOMICS ASSIGNMENT Economics AssignmentName of the StudentName of the UniversityAuthor Note
ECONOMICS ASSIGNMENT 1Introduction Over the years, the international economic scenario has developed considerably withthe growth and overall development of the economies of the different economies across theworld, in different pace and with diverse characteristics. The phenomena of globalsignificance like Globalization, industrial advancements, technological innovations,infrastructural developments as well as the growth of international commerce with tradeliberalizations across different countries have cumulatively led to considerable dynamics inthe global economic framework (Holland 2018). One of the predominant economies, in the international framework, has however beenthat of the Australian economy, which developed significantly over the decades andprospered immensely with due course of time, much of which can be attributed to theimmense growth of the agricultural, manufacturing and contemporary service sectors andprospering of the businesses and trades in the country consistently over the years (Dyste andMeredith 2012). The effects of such prosperity can be seen in the impressive and stablegrowth dynamics which can be seen in almost all the macroeconomic indicators of thecountry. This huge economic prosperity has made the country a centre of attraction for notonly the global investors and businesses but also for an increasing number of immigrantsfrom all parts of the world who have migrated in the country for better living and economicscopes. However, in the recent period, the country has been experiencing several issues ofutmost concern in its economic domain, the most significant one of which is the slow growthrate of the wages in the country in the contemporary period (Bishop 2016). The essay tries todiscuss this issue elaborately, thereby trying to analyse the risks which can arise out of the
ECONOMICS ASSIGNMENT 2same for the economy of the country in the coming years, in the light of the relevanteconomic theories. Wage dynamics in Australia in the contemporary periods The economy of Australia, as discussed above, has developed immensely over thedecades and shows huge economic prosperity in the aspects of GDP growth, employmentgeneration, stability in the average price levels in the economy as well as the in terms of thegrowth of the industrial and business prospects and an overall high standard of living of thepopulation of the country (Jacobs and Rush 2015). However, in the last few years, one of themost important indicator of economic well-being of the population of the country, the wagerate, is seen to be showing disappointing trends with very low and declining rates of growthin the economy. This can be seen with the help of the following figure: Figure 1: Declining growth of the wage rates in Australia
ECONOMICS ASSIGNMENT 3(Source: Scutt 2018)The above figure shows the movements in the Wage Price Index of the concernedcountry between the years of 1998-2016, which in turn shows the dynamics in the rate ofgrowth of the price of labours, that is, the wages in the country. As is evident from the abovefigure, the overall trend, which showed a positive trait till 2006, started declining from 2007and barring a few short-term fluctuations has declined with time, with the rates being as lowas 1% to 2% in 2016 (Wilkins and Wooden 2014). This includes the decline in the rate ofgrowth of wages in both the public sector as well as the private sector of the country, whichin turn indicates towards the fact that the decline and slow rate of growth of the wages is nota problem confined to one particular sector of the economy but is actually an economy wideproblem, which in turn increases the level of severity and implications of the same. Causes of low rate of growth of Australian wages The low rate of growth of wages in the country in consideration can be attributed to aseries of factors, the primary ones being as follows: Types of jobs generated- The economy in the recent periods have experienced an increase inthe number of jobs created as a whole in the economy. However, most of these new jobscreated are of part-time type and the total number of newly created full-time jobs haveactually decreased drastically over time, which can be observed in the following figure:
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