Changes in the Australian Labour Market - Essay Example

Introduction Labour market usually refers to the overall interaction of employers and employees. The labour market plays an integral role in the overall development in a nation. This explains the importance of monitoring the changes and forces that affect it either negatively or positively. Trade unions are part and parcel of the labour market. They are also referred to as the employees’ voice (Simon, 2005). Each and every market in any nation has a bargaining system therein. This paper therefore assesses the relationship between changes in the labour market and changes that are evident in the Australian bargaining system. This paper also evaluates the relationship between changes in the labour market and changes in the level of industrial conflict. It further analyses the relationship between changes in the labour market and the changes in trade union membership density. The argument will be put forward that .the Australian labour market changes over the past years have been bad because they have led to poor employee employer relations, working conditions and remuneration packages. (Simon, 2005) The Australian labour market has gone through many changes. These changes have been spurred by various factors both at national and international levels. The labour market in Australia in the previous years was characterised by many blue collar jobs. White collar jobs in the 1982 were very limited. (Muhl, 2001) It was however noted that majority of employees were males as compared to females. During this period, many employees had joined different trade unions. It is approximated that the number of members in trade unions were approximately three million. The primary industry in Australia consisted of a large workforce that was centralised in nature (Fox, 1974). It is also worth noting that during this time, majority of employed people were in the primary industry. Stock or inventory in most Companies or industries was in form of products. Further analysis of the labour market during this time shows that employers would use a lot of resources to ensure that employees are well equipped (Lye and McDonald, 2004). This is in terms of money and time. In this case employers ensured that any skills that employees required were provided for in the organisation. This resulted in a situation whereby many potential employees sought for careers in organisation. The industry also had a workforce that was quite centralised in nature (Lye and McDonald, 2004).They looked forward to having a long time serving in the organisations because of the high chances that were there of improving their skills and climbing up the ladder in terms of job levels. The supply of labour in the market was very small and this resulted in a situation where many employers offered employees attractive remuneration packages. It is quite imperative to note there was very little in terms of skilled workmanship in the Australian market as per this time (Gall, 2004). By the 20th century, various changes were already evident in the Australian labour market. One of the major changes that the labour market started having been the increase in demand of white collar jobs as compared to blue collar ones. People in the 21st century do not want blue collar jobs anymore like in the eighties Mor, (2000) The factors that contributed to this are the fact that many people started getting necessary skills before seeking for job opportunities. It is also worth noting that number of employees who join trade unions declined at an alarming rate. While in the 1980’s trade unions had approximately three million members, by the 21st century, they had only forty 41,000 members. The changes in the Australian labour market highly impacted changes in trade unions. This is considering the fact that as blue collar jobs continued to decrease many people started having their own businesses. This made it very hard for trade unions to recruit more members. As time went by people had casual rather than permanent jobs. They therefore viewed that joining trade unions was a waste of time and that it would not benefit them since they were only in the organisations on a temporary basis (Lye and McDonald, 2004). This clearly shows that there is a very high correlation between skills and the need for collective bargaining power. The more employees get more skills the lesser they want to have collective bargaining power. (Mincer, 1974) In most cases as workforce get equipped with necessary skills they find it better to have individual bargaining systems. Their confidence is enhanced in reasoning out their cases with their employers. This explains the change in labour market structures and mechanisms as compared to bargaining systems (Lye and McDonald, 2004). Initially, many people in the Australian labour market were employed on full time basis. Majority of them had one main job where they worked from January to December. The situation has changed and the labour market in Australia has very many people employed on a part time basis. Many employees are working in the service industry unlike previous years were majority of workforce was in product industry (Joan and Jeffrey, 2003) Twentieth century has had many employees in the Australian labour market having more than one job. This has highly been impacted by the accrual of diverse skills and professionalism in different fields. According to research carried out by Simon (2005) the flooding of skilled labour in the market is also a factor that has highly contributed to terms of employment evident in Australia. Unlike in 1980’s when the workforce was highly centralised, the workforce in Australia is currently highly decentralised. This is more so in the service industry. This explains the changes in the number of members evident in trade unions in present times as compared to previous years. Unlike early eighties, labour market consists of inventory that is the form of knowledge and staff. (Jeanry, 1963) Another major change is the fact that employees no longer seek for careers in an organisation like earlier years. The attention has however been shifted to seeking for careers in the industry. This explains why employees are no longer employed on a full time basis but a part time basis (Fox, 1974).Unlike previous years, many employers in Australia recruit skilled labour. They require potential employees to have undergone various trainings in order to secure the job. It is quite common for employers to get employees from competitor organisations who have been trained in different areas (Lye and McDonald, 2004). This shows that employers are no longer willing to spend so much on organisational development unlike previous years. This is done all in the name of reducing costs incurred in an organisation. The Australian labour market also has a situation where wages paid to employees are very low. This is highly attributed to the changes in supply and demand of labour. (Howard, 1999) According to research carried out by Head, (2005) there are various factors that contributed to changes in the labour market since the 1980’s. One of the factors noted is that in early eighties there was a major recession. This resulted in changes in the labour market. It resulted in a situation where employers started being keen on IR issues (Sparrow and Hilltop, 1994). This led to progress of the service industry as the primary industry continued to dwindle. This explains why blue collar jobs continued to decrease as white collar jobs started being the major source of income for employees. Recession resulted in changes such as employees working for very many hours without getting due compensation for the extra time (Head, 2005) In order to handle the issue of recession, the Australian government decided to enforce the aspect of having a decentralised system of putting in place remuneration packages and wages. This resulted in a situation where employers pay employees what they feel like (Lye and McDonald, 2004). This aspect shows that political factors played a great role in the changes witnessed in the Australian labour market. Majority of trade tariffs for international businesses were waived off. This led to a situation where there was very stiff competition for Australian industries. Price competition was so stiff that Australian Companies had to cut down on costs in order to sell their products (Lye and McDonald, 2004). This aspect was implemented by the government linking with trade unions. Pressure that was ideological in nature mounted in Australian labour market. This led to all stakeholders embracing proposed changes that overhauled the industrial relations system as evident today. This therefore explains the relationship between the changes in Australia’s labour market as compared to the bargaining system in the nation (Lye and McDonald, 2004). Initially, there was more of collective bargaining but changes in the labour market resulted in individualised bargaining. Further research clearly illustrates that Australia had established a system that consisted of arbitration or negotiation and conciliation. The changes in the labour market overhauled this system to one where enterprise bargaining was upheld (Gall, 2004). This resulted in the industrial relations being dominated by the State. It is quite clear that the state was a major contributor to the growth in the industrial relations evident in Australia today. As earlier on illustrated, many employees in Australia joined trade unions in the 1980’s. The trade unions help employees to express their views concerning employment (Blanchflower, 2005) This period was characterised by very many strikes. Employees would gang up and have open strikes to show their dissatisfaction with their employers in one way of the other. After the changes in the labour market, trade union representation of employees dwindled at an alarming rate. (Maundy, 2001) There were no more collective strikes. Instead, whenever employees feel dissatisfied by their employer, they simply quit the organisation for greener pastures. In case they are not in a position to move, they simply become absent without for no good reason. They also decide to sleep on the job and show signs of being unmotivated (Hicks, 1963). The aspect of individualised bargaining resulted in a situation where the ignorant and weak employees are exploited by their employers. Very few employees can face up their employers and complain of areas where they are dissatisfied. This is because in most cases employers end up sacking them. After all, the supply of labour in the market is overwhelming (Lye and McDonald, 2004). There are also many correlations between the changes in the labour market and those in industrial relations in Australia. Practices of employers, managers have changed over time. For instance, as the market continues to be highly competitive, managers work on reducing costs including downsizing remuneration packages. (Orley, 1984) This shows that changes in the labour market environment have also affected changes in industrial relations. With the shift from trade unions, employers also reformed their practices. One of the practices is the aspect of individual or enterprise bargaining in industrial relations (Lye and McDonald, 2004). Changes in the labour market in terms of its composition, organization and nature have also impacted changes evident in industrial relations. Business organisations have changed in terms of their structure. They are no longer operating in a centralised but decentralised structure. Organisations shifted from full time employment to outsourcing and other part time terms. These changes have also resulted in a situation where trade is more liberalise than previous years. (Lewin, 1987) Financial markets are more deregulated than before where tough regulations were put in place. Majority of trade tariffs have been scraped off making competition to be very stiff. All these pressures resulted in the shift from industrial relations that were more adversarial in nature to a system of individual bargaining Killingsworth, (1983) This is where employees are free to communicate directly on matters that affect them with their employers. The State also played an essential role in these changes. This is by the coalition between the State, employers and trade unions. Recent research shows that there are chances that the government may turn back to putting in place regulations on the labour market. This is through enactment of policies to regulate the market and stakeholders therein. This is an issue that many employers in the nation are fighting against because individual bargaining is more advantageous to them (Fox, 1974). Trade unions comprise of employees who have worked in an organisation in past years, professionals in diverse fields and current employees. The overall concerns of trade unions involve the enhancement of conditions in employment set up. They are also referred to as the employees’ voice Richard, (2008). They play an imperative role in augmenting the bargaining power in any employment contract. Therefore through collective bargaining, trade unions negotiate with employers on behalf of employees. This is to ensure employees’ social and economic conditions at their workplace improve. Various surveys carried out in Australia show that trade unions have also played a very essential role in the overall development of Australian nation. This is more so in terms of political, social and even economic areas (Lye and McDonald, 2004). One of the major roles of trade unions is that of workplace representation. The Australian nation recognises trade unions as legal entities. This means that the law allows them to represent employees in any lawful issues that they may encounter at their place of work. Trade unions are highly involved with recruiting members and ensuring that their legal issues as far as employment is related are well represented (Gall, 2004). Majority of these issues relate to workplace terms like payment of employee’s salaries on time, freedom of expression at workplace among others. The other major role relates to representing employees in political arenas. Trade unions are in a position o represent all the entire nation’s employees in national meetings and forums Kochan, (2004) This highly relates to matters concerning tax payment, average wages that the laws of the land stipulate they should be paid, safety matters and compensation in case of accidents. Matters of occupational health are also handled at this level. In this case, they act as a collective voice of employees to employers and the government (Enington, 2001) Changes in the labour market such as the number of employed males and females also affected trade unions. Initially many males formed large percentage of employed workforce in the nation. As times went by, the ratio of females in employment bypassed those of male (Simon, 2005). Trade unions were highly male dominated even in terms of leadership. They issues that they fought for were also more focused on the male gender. This resulted in few female employees wanting to be associated with trade unions hence the sharp decline in membership (Lye and McDonald, 2004). Many changes also occurred in labour laws and legislation that have encouraged individual bargaining. This includes laws on unfair dismissal and the equal opportunity act among others. For instance, recent changes in the bill named as better bargaining does not allow employees to demand for the same remuneration package just because their job is similar. This makes trade unions quite irrelevant to some extent. This led to the demise of collective bargaining structures like trade unions (Simon, 2005). The bargaining system in Australia changed from collective bargaining to enterprise bargaining. The laws of the land however give employees the freedom to choose from a wide range of options so as to reach an understanding on matters that concern employment conditions and remuneration packages. The law also allow employers and employees to make to come to an agreement on the above issue in a direct way without a third party. This is in accordance to Australian Workplace Agreements. The role of the bargaining system in the labour market is therefore very essential (Gall, 2004). One of the major roles of the bargaining system in the nation is ensuring that both employers and employees reach a consensus on the aspects of employment conditions and remuneration packages. All this is to ensure that none of the stakeholders feels unfairly treated by set standards. This is considering the fact that not all employers make the same level of profits and therefore salary packages may differ from employer to employer (Freeman, 1987) Conclusion The Australian labour market has gone through many changes since the 1980’s. This includes changes from blue collar to white collar jobs. The labour market also changed from a centralised system to one that is highly decentralised. Employees were initially employed on a full time basis which shifted to part time. The number of members in trade unions continued to reduce year after year. These changes also resulted in various changes in trade unions in the nation. The decentralised structure made it hard for trade unions to recruit members. Part time employees felt that trade unions would not benefit much and declined the offer to join. The number of female employees continued to increase as compared to male ones. Trade unions concentrated on fighting for issues that were more based on male interests. Female employees were therefore not willing to join. There was shift from collective bargaining to individualised bargaining in the labour market. These changes also affected the changes in industrial relations and the Australian bargaining system at large. Thus, in regards to the relationships between changes labour market and changes labour market the system of IR, one can see that over the years the changes have been bad for employees and the economy at large. Read More