Construction Economics: Globalisation and Labour Market in Australia

This essay explores the impacts of globalisation on the Australian labour market, with a specific focus on the construction industry. It highlights how increased global integration has led to a surge in immigration, boosting the overall labour supply in Australia. However, a sectoral shift away from manufacturing and construction towards service industries has resulted in fewer job opportunities in the construction sector. This imbalance between labour supply and demand has created an excess of labour, leading to sluggish or negative wage growth and increased vulnerability for construction workers. The essay concludes that while globalisation has brought economic prosperity to Australia, it has also presented challenges for specific sectors like construction due to changing labour market dynamics.

Running head: COONSTRUCTION ECONOMICS
Construction Economics
Name of the Student
Name of the University
Author Note

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
As discussed above, the primary contribution of Globalisation on the global
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:

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

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. Available at: http://blog.visabureau.com/post/new-
australian-immigration-statistics-reveal-latest-migration-trends.aspx [Accessed 31 May
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). The Labour Market, Structural Change and Recent Economic
Developments | Speeches | RBA. [online] Reserve Bank of Australia. Available at:
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
working holiday temporary migrants to Australia. Population, space and place, 18(3),
pp.359-383.
Tradingeconomics.com (2018). Labor force - total in Australia. [online]
Tradingeconomics.com. Available at: 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.