Impacts of Globalisation on the Labour Market of Australia
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This report discusses the impacts of globalisation on the labour market of Australia, with a focus on the construction industry. It covers the increase in labour supply, excess supply in the construction industry, and reduction in wage growth scopes.
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Running head: COONSTRUCTION ECONOMICS Construction Economics Name of the Student Name of the University Author Note
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1CONSTRUCTION ECONOMICS Table of Contents Introduction................................................................................................................................2 Impacts of Globalisation on the labour market of Australia......................................................2 Implications on the labour dynamics in the construction industry of Australia........................4 Conclusion..................................................................................................................................6 References..................................................................................................................................8
2CONSTRUCTION ECONOMICS Introduction The global economy has experienced considerable dynamics over the years, much of which can be attributed to different international phenomena, of which one of the primary events is that of the Globalisation. The term “Globalisation” refers to the worldwide social, financial, economic, trade and political integration, which is facilitated by opening of the national domains for setting up higher interconnected communications with all parts of the globe. The effects of globalisation have been considerably huge in different sectors of the countries in the international framework (Jones 2013). Keeping this into consideration, the concerned report tries to emphasize on the impacts of this international phenomenon on the labour market of one of the most eminent economies in the global scenario, that is the economy of Australia. Impacts of Globalisation on the labour market of Australia Asdiscussedabove,theprimarycontributionofGlobalisationontheglobal framework is the increased integration and inclusiveness of the different countries across the globe. This in turn, has influenced different sectors of the country, in different manners. Australia, as an economy has remained one of the most developed ones in the global framework over the decades. Much of this development of the country as a whole can be attributed to the development of the different industries in the country, over the years. Globalisation, by opening the global market and trading opportunities has also contributed in increasing the economic and overall prosperity of the country, which can be seen to be reflected in the overall high standard of living of the population as a whole (Dyster and Meredith 2012). This economic prosperity of the country, has over the decades attracted people from all parts of the world, especially from the low developed countries, to tend to migrate to the
3CONSTRUCTION ECONOMICS country, primarily in the search of better life and economic abundance. This trend of inward migration has increased even more in the recent periods, post globalisation, which can be seen from the following figure: Figure 1: Changes in the net long-term migration into Australia (1083-2013) (Source: Blog.visabureau.com 2018) As can be seen from the above figure, the net immigration in the concerned country has steadily increased over the years, with the rate of increase being especially high in the last few decades. Much of these immigrants being economic migrants, that is, ones with the objective of increasing economic welfare and finding effective employment, this increased migration, facilitated by Globalisation, has facilitated the increase in the supply of labour in the country, which can be seen from the following figure:
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4CONSTRUCTION ECONOMICS Figure 2: Increase in the labour force of Australia (1980-2016) (Source: Tradingeconomics.com 2018) From the above figure, it can be seen that the number of people in the labour force in the country has been increasing consistently over the last few decades, much of which can be attributed to the increase in the immigration of global working population from all parts of the world (Tan and Lester 2012). This in turn has led to an increase in the labour supply in the country, especially in the manufacturing, agricultural and construction sector, as much of the labour present in the economy are basic skilled ones, with basic level of education, being fit for these labour- intensive sectors. Implications on the labour dynamics in the construction industry of Australia As discussed above, the consistent inflow of migrants and increase in the labour supply has increased the supply of labour in the construction industry of Australia. However, the creation of jobs in the construction industry, which was one of the flourishing sector of the country, has been decreasing in the recent period (Wilkins 2013). This can be attributed to the sectoral shift of the industrial patterns of the country from the manufacturing and
5CONSTRUCTION ECONOMICS construction industries, to more of service sector industries, which can be seen from the following figure, showing the trends in the job creation in different sectors of Australia in the recent period: Figure 3: Sector wise job growth in Australia in 2012 (In thousands) (Source: Rba.gov.au 2018) As is evident, the construction sector of the country in the last few years has been losing significant jobs. This, clubbed with the increase in the labour in this industry has led to the creation of excess supply in the concerned sector:
6CONSTRUCTION ECONOMICS Figure 4: Excess supply of labour in construction industry (Source: As created by the author) This in turn has led to the sluggish or negative growth in the wage rates of the labour in this industry as they have become easily substitutable and in the absence of employment scopes, they are now willing to work in lower wages. Conclusion From the above discussion, it can thus be asserted that with Globalisation, the labour supply in Australia as a whole and in the construction industry of the country has increased considerably, much of which can be attributed to the increased immigration, facilitated by the concerned international phenomenon. However, as the number of jobs in the concerned industry has been decreasing owing to the shift of the economy of the country towards the service sector, an excess supply has been created in the labour market for the concerned
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7CONSTRUCTION ECONOMICS industry, which has led to reduction in the wage growth scopes and increase in the vulnerabilities of the workers in the construction industry of Australia.
8CONSTRUCTION ECONOMICS References Blog.visabureau.com (2018).New Australian immigration statistics reveal latest migration trends.[online]Blog.visabureau.com.Availableat:http://blog.visabureau.com/post/new- australian-immigration-statistics-reveal-latest-migration-trends.aspx[Accessed31May 2018]. Dyster, B. and Meredith, D., 2012.Australia in the global economy: continuity and change. Cambridge University Press. Jones, R.B., 2013.Globalisation and interdependence in the international political economy: rhetoric and reality. Bloomsbury Publishing. Rba.gov.au(2018).TheLabourMarket,StructuralChangeandRecentEconomic Developments|Speeches|RBA.[online]ReserveBankofAustralia.Availableat: https://www.rba.gov.au/speeches/2012/sp-dg-091012.html [Accessed 31 May 2018]. Tan, Y. and Lester, L.H., 2012. Labour market and economic impacts of international workingholidaytemporarymigrantstoAustralia.Population,spaceandplace,18(3), pp.359-383. Tradingeconomics.com(2018).Laborforce-totalinAustralia.[online] Tradingeconomics.com.Availableat:https://tradingeconomics.com/australia/labor-force- total-wb-data.html [Accessed 31 May 2018]. Wilkins, R., 2013. Families, incomes and jobs, volume 8: a statistical report on waves 1 to 10 of the household, income and labour dynamics in Australia survey.