Economics of Labour

Business and Labour

By Charles Allatt

Introduction 1.5
mins
- Focus topic of speech: Economics in Business; private labour.
- Importance of labour to economic growth and stability
through business.
- Priority of efficiency for business to achieve these ends.
- Necessity for the government to help shape and achieve
efficiency.
- Need to be careful and forward-thinking in approach to new
solutions, especially regarding global financial crisis,
whereupon efficiency becomes vastly more important.

Issue One: Structural Unemployment

3 mins
- What is structural unemployment?
- How does this destabilise the economy and affect efficiency
for the private sector?
- What is currently being done to minimise the impacts of
structural unemployment by the government, and by private
businesses?
- What can further, be done by the government, and by private
sectors, to increase the availability of labour for these
structurally deficient areas?

Issue Two: Private v. Public 3

mins
- What is the struggle between private and public labour?
- How does this destabilise the economy and affect efficiency
for the private sector?
- What is being done by either party to minimise the impact of
private and public wage wars?
- What can be done, further to these actions, to increase the
availability of labour overall, or to maximise efficiency, or
else to otherwise mitigate the issue of the battle for labour
between private and public?

Issue Three: Government Standards

3.5 mins
- What are the standards imposed by the government upon
labour in the private sector?
- How can these affect efficiency? Are these doing an effective
job at maximising efficiency, or else providing a negative
effect?
- What is being done elsewhere? How can this be copied or
utilised here?
 - What else can be done to increase the efficiency of labour
and these standards?

Recommendations 4
mins
- For each problem, suggest possible solutions, illustrating the
pro’s and con’s of each.
- Focus upon Government Standards (Issue 3) and suggest
solution
- Discuss dire need to implement recommendations to prevent
destruction of economy.

Conclusion 1 min
- Summarise.
- Explain how what is already in effect is not working as
effectively as it could, and that, left unchecked it could
seriously affect the economy in years to come.
- Re-iterate the importance of labour to an effective economy.
- End.
Good Afternoon Ladies and Gentlemen,

You are all aware of the importance of labour to an economy. You know that
an effective and efficient work force ensures the private sector has an
increased ability to grow and expand, both nationally and internationally. This
growth, in turn, drives the country’s economy, bringing in outside fiscal
revenues through exports and taxation. Business is, thus, crucially important
to continued economic growth. [The Times 100, n.d.] I have been asked to
present here today in light of the recent effects of the global financial crisis
upon Australia’s unemployment. The urgency of the situation is likely to
provoke radical, even rash, actions on the part of the Federal Government,
however it must be stressed that any movements to remedy these issues
must be decisive and calculated, else the damage to the country’s economy
is likely only to be magnified. Movements must be implemented with due
regard for their effects upon private business, which is potentially the
singularly most effective vehicle for overcoming the financial crisis. In the
past, the private sector has traditionally had the ability to throw money at
their employment problems, but now, with cutbacks, waning profit margins
and failing revenue streams, employers are instead seeking to maximise
efficiency in the workplace, and address their labour shortages in more
creative ways. [D. Mattioli, 2009] To this end, the Government must help
implement solutions to shape and improve efficiency in the private sector, for
increased economic growth for the entire country. Failure to do so could
mean Australia’s future is jeopardised; the global financial crisis represents
here a unique opportunity to maximise labour efficiency for continued future
economic growth. [Slide]

One of the primary issues for labour in both the private and public sector is
caused by a phenomenon known as structural unemployment. This form of
unemployment occurs when the gaps in demanded labour can’t be filled by
the existing unemployed, being that they are not skilled in the necessary
areas and industries. [Investopedia, 2009] As an example, Marshall Brain a
speaker at the Institute for Ethics and Emerging Technologies discussed how
automation in future years is likely to create increase structural
unemployment, as factory workers are replaced by autonomously operating
robots. [Institute for Ethics and Emerging Technology, Oct 2008] In the same
manner, the collapse of particular industries in Australia has already begun to
cause structural unemployment; in January this year, mining giant BHP closed
its Ravensthorpe nickel mine, and laid off 2,000 Australian workers, whilst its
rival, Rio Tinto axed 14,000 jobs globally. [New York Times, Jan 2009] These
workers have particular skill-sets attributable to mining, but with the global
crisis, it’s unlikely they’ll be able to find work in another, different industry.
Despite the downturn there are still industries that are hiring. Unfortunately a
lack of skilled labour is only exacerbating inefficiencies in the workplace; I.T.
and environmental ‘green collar’ workers are in high demand according to
Peoplebank and the Canberra Institute of Technology (CIT) respectively. Glen
Carter, building and environment director at CIT claims that "a range of
industries that have sought…changes in the skills base [of workers]." [ABC
News, Jan 2009] [Thinking News Australia, Jul 2009] It is industries such as
information technology that are experiencing these spikes in demand as
employers seek to maximize cost effectiveness through technology.
However, without the required skills, and with growing unemployment due to
layoffs, progress is hindered. The Australian Government, as part of its
macroeconomic objectives, has always sought to minimize unemployment.
[Exploring Macroeconomics, n.d.] Thusly, there are already some initiatives in
place aimed at minimizing structural unemployment, however they are
neither capable of dealing with layoffs of this scale, nor are they targeted at
the correct industries. The most successful, perhaps, of the existing initiatives
is a $650 million Job Fund, with almost half of that, $300 million, aimed at
supporting community-funded infrastructure projects with an environmentally
friendly focus. [Australian Government, 2009] This form of ‘transitional work’
should go some way towards making use of the laid off unskilled labourers
from mining unemployment, whilst exposing them to hands-on experience
with greener technology, which is currently in demand. Similarly, the $77
million National Green Corps program seeks to achieve similar aims for youth
workers 18-24 to ensure they don’t fall into the same structural rut as their
older counterparts. [Australian Government, 2009] Unfortunately, much of
the remaining Government initiatives are primarily focused on supporting and
training more and more physical labourers in various trades. [AATIS, Sept
2009] While it is entirely necessary to focus upon infrastructure for the
future, the government is primarily ignoring the needs of the private sector in
this regard, focussing only upon their own macro-economic objectives.
[Exploring Macroeconomics, n.d.]

These labourers, formerly useful as say…contractors to property developers,

such as the now ‘in-receivership’ Raptis Group, are now primarily only useful
in government contracting. [Guest. A., Sept 2008] This is due to the tough
economic climate, as private businesses avoid costly infrastructure upgrades
in a bid to save cash. The private sector’s issues can be solved through the
government implementation of nation-wide training schemes, specifically
tailored towards shifting unemployed workers’ skills into industries where
demand is high. Centrelink unemployment benefits could be conditional on
the basis of undergoing mandatory supported training in these industries, or
the government could alternatively offer incentives to universities to accept
mature age entrants into particular courses. Although these solutions are
longer-term, the private sector itself could be financially encouraged, by the
government, to perform on-the-job training, which would make a somewhat
less elegant, but altogether faster solution to the immediate issue of
structural unemployment. Regardless, without effective initiatives to solve
the problems, the private sector will slowly lose productivity if their formerly
labour-heavy efforts aren’t substituted with more efficient technology or
environmental sustainability. Additionally, the ensuing levels of
unemployment could prove crippling to the Australian social welfare scheme,
and lead to increased levels of poverty and destitution. [Slide]

Within this issue there lies a second problem facing Australian employers,
which stems from the government itself. It has perhaps always been a
permanent fixture in the economy, as it is, necessarily, around much of the
rest of the developed world; the struggle for labour between the private and
public sector. There is a very limited amount of labour available for
exploitation within the country. Keeping unemployment low and improving
infrastructure is a dual-responsibilities for the Government. [Exploring
Macroeconomics, n.d.] However, trying to achieve full employment is a nigh
impossible endeavour, only complicated by the presence of the private
sector. Consider that business contributes to employment to serve their own
ends, but does so far more efficiently than the government in terms of
growth. Comparatively the government uses revenues from taxation to
support labour in order to improve facilities such as schools, roads and
hospitals. It’s a complex balancing act between economic growth,
employment and improving standard of living. The problem of competition
between the government and business is not a significant issue in this
economic climate; however the eventual road to recovery will inevitably see
this problem return as a major inflationary pressure, as private and
government sectors bid against one another for a limited supply of labour in
the market. By initiating precautionary measures now, the Federal
Government can lessen later impacts that could be harmful to the economy,
and even stabilise the current situation for workers. One method of effecting
change would be to implement ‘wage ceilings’ for particular occupations.
Based on the same economic theory as a price ceiling, wage ceilings would
prevent the inflationary pressures of highly-sought after occupations, and
mean private and public institutions would be unable to enter ‘bidding wars’
with one another to attract more labour to their own sector. This theory is
also similar to ‘salary caps’ used in professional sports. [Janvrin, S., May
2008] The idea encourages competitiveness not only between public and
private, but within business internally, as no one company could monopolise
the most talented employees of a particular industry and force competitors
into insolvency. An alternative measure would be to cap the percentage of
workers the Australian Government can employ comparatively to the private
sector, provisional on the basis that there is demand for labour from the
private sector. This would ensure the two groups wouldn’t have to
unnecessarily compete for labour. The only other solutions that have been
used effectively in the past, involve attracting more skilled migrants from
overseas to increase supply, however that has inherent inflationary
pressures, and is impractical in the short-term since the need is, as yet, not
dire; it represents are more short-term fix than long-term solution. [Nolan, M.,
Aug 2007] [Slide]

Interestingly the potential solutions that have been proposed throughout this
discussion are primarily government enacted. It is, in many ways, the
Government’s responsibility to uphold efficiency in the workplace through its
legislative measures, as this contributes to economic growth. [The Times 100,
n.d.] However that responsibility conflicts to some degree with another of
their macro-economic objectives: standard of living. To what degree are
current standard imposed by the government geared towards efficiency, as
opposed to standard of living, and how effective are these policies, especially
in the current dire economic situation, where escaping recession and
downturn should be the primary concerns? The government enforces very
specific conditions upon workers to assure fair treatment in the workplace.
[Fair Work Australia, 2009] However, with efficiency as the now higher
priority, the awards based system should be reviewed to guarantee
employers maximum cost-effectiveness, as opposed to the higher standard of
living sought by workers. Although this seems like a step backwards, the only
way to assure long-term improved standard of living is to first ensure viable
growth for the country’s GDP; the most realistic way to increase this figure,
and assure growth, is to increase demand and supply simultaneously for
products and services. [Exploring Macroeconomics, n.d.] To accomplish that,
requires an increase in the market for products; supply can be increased by
hiring more labour, so long as cheaper rates are permissible by the
government, however as a result consumers locally can demand less, in turn,
as they are being paid less. This is where international competitiveness
becomes crucial. [Nolan, M., Aug 2007]

If Australia’s businesses can produce and distribute their goods and services
at a lower price than ever before at similar quality, then even the recession-
hardened global economy will be interested. The boost to Australian exports
will field the demand the economy’s recovery so desperately requires, whilst
simultaneously helping to alleviate the currently ballooning current account
deficit which may potentially spiral out of control if the Australian Dollar
depreciates significantly or the economy contracts enough. Unfortunately, as
noted, this would mean a decrease in the minimum wages mandated by the
government, at least in the short term. Fair Work Australia is responsible for
setting the awards in Australia and describes itself as “the national workplace
relations tribunal.” [Fair Work Australia, 2009] On the FWA website it is
possible to view any award, including, for example, the consolidated retail
industry award. The document sets out literally hundreds of conditions and
minimum standards, including the approximately $500 minimum weekly
wage, a variety of additional payments that must be mandated if duties
include things such as cooking ham or bacon, or cleaning lavatories, as well
as minimum superannuation contributions, meal breaks, overtime, annual
leave and more. [Australian Government Awards, 2004] While these
minimum conditions are effective during boom times, their cost-effectiveness
leaves a little to be desired. Afterall, since efficiency stems directly from
motivation, some of the award standards may be unnecessary. According to
Khera Communications, employee motivation is simple in that “there needs
to be a tangible benefit to push them.” [More Business, Oct 2006] While fiscal
compensation certainly does that, there are other discernable benefits
available as well, including increased days off. Advocates of four-day working
week proposals, such as Senator Seny Hoyer in the U.S. claim that increased
days off “can help resolve a number of personal problems,” [Hoyer, S., 2008]
citing workers who care for dependents. This sort of solution would see
reduced pay for a reduced week, ideally with the same amount of hours. [J.
Davidson, Aug 2008] The tangible benefit stems from the freed up day which
acts somewhat complimentarily to annual leave. This echoes the moves of
European car manufacturer Volkswagen back in 1993, who bargained with
workers for reduced pay over a four day week, in exchange not having to lay
off over a third of their workforce. The loss of one day’s productivity due to
the four day week is far more efficient than the loss of one third of their
workforce, a ratio of 1:5 as opposed to 1:3, nearly doubly as efficient for the
same cost. As a further bonus, unemployment is kept relatively low with
these kinds of deals. [Dale, R., Nov 1993] Potentially, this sort of solution
could be effectively applied to the entire country’s businesses to offset costs
and yet retain production as much as possible. The root of the problem,
however, is that the minimum wage is simply far too high; and whilst
bargaining can solve some issues, motivation is not always best served by
fiscal incentive. As a result, the government should cut minimum wages
significantly, replacing it with a shorter week with the same, or very similar
hours, at around thirty-eight, only over a four day period as opposed to the
full five. Protecting the private sector’s interests will ultimately result in
greater growth in GDP, higher taxation income for the government through
aforementioned growth, and resulting higher standard of living as the Federal
Government invests over time.

Traditionally, this approach is taken on by smaller economies and

governments, as opposed to larger nations such as Australia. However the
severe nature of the most recent market correction provokes the need for
drastic action to immediately remedy existing issues in employment and
prevent a vicious cycle which could realistically see Australia’s economy
damaged beyond recovery for the next decade and further besides. The
disregard for social and ethical concerns, particularly with respect to the
lowering of minimum wage, is an entirely necessary sacrifice for the greater
good. Further, there is a fair compensatory trade-off in the additional time off
granted to workers. It is simply the most efficient and effective solution to the
employment crisis that would otherwise face the country. It echoes the
theory of European unionists; “work less, and we’ll all work,” and soundly
represents a practical approach for companies to adopt in tough economic
conditions. [Dale, R., Nov 1993]

Some additional focus should be geared towards purposefully reducing

working conditions in terms of fiscal incentives as a method of attracting
investment from overseas private sectors, as well, who still require either a
level of quality or technology that cannot be served effectively through
country’s such as China or India where labour is comparatively much
cheaper. Overall, the focus of the government needs to shift from protecting
employees, to promoting the interests of employers for the greater good in
the long run. [Slide]

The recommended course of action for each of these issues weighs carefully
the pro’s and con’s of each solution to find the most effective way of
increasing employee efficiency and promoting the best interests of the
country in the long term. Structural unemployment can never truly be
eradicated, however it can be mitigated in this harsh climate by enacting
mandatory social-welfare schemes that see unemployed workers forced to
train in new industries as a way of gaining new skills, and opening
opportunities for them in the future. Although this scheme could be
implemented on an opt-in voluntary basis, the country’s social welfare
scheme is unlikely to be able to survive a high number of structurally
unemployed dependents in addition to other forms such as frictional and
hardcore unemployed. And even if it is, once the recession is over, the
dependents are still going to be untrained and unskilled in industries that are
in demand; by the end of the tough economic climate, many of the original
jobs that are being laid off now will have been replaced with more efficient
posts, or else automated at Martin Brain suggests. Again, with regards to the
labour war between private and public sectors, there is no long-term solution,
and in fact this is perhaps the least dire of the issues discussed today, since
we’re nowhere near experiencing these problems as yet, leastways till the
economy has begun to recover in earnest. Still, the possible action of
enacting a price ceiling now is likely only to force skilled migrants to shy
away from visiting the country, and may even drive existing labour overseas
in search of greater compensation for their talents. Alternatively it could
result in a lack of talent in years to come as people avoid the professions with
wage ceilings. The only discernable benefit of a wage ceiling is that it
prevents competition between private and public sectors fiscally, and
encourages competition in the free market between private companies who
are unable to use their financial superiority to monopolise talent. The more
effective solution is the fixed percentage talent acquisition solution, whereby
the public sector could only employ a certain percentage of workers in an
industry, so long as there was demand from the private sector for other
workers. It would still prevent competition up to a point, between the two
sectors, and wouldn’t result in later structural unemployment in years to
come, or other adverse, similar effects. By rights, the fixed percentage talent
acquisition solution is the most efficient. However, far more complex is the
question of how to enforce efficiency in the workplace as a Government. The
only effective way to increase efficiency in the recession is to lower costs
whilst retaining productivity, something Volkswagen managed to do in
Europe by bargaining collectively with staff to reduce wages and working
hours, but retaining their entire workforce. The alternative is simply to slash
the minimum wage by a proportionate amount, which could have all manner
of adverse effects, and would ultimately create negative will from workers
anyway, counter-manning any possible increase in productivity. It is
uncertain, but it seems the former is the most efficient way of improving
efficiency and global competitiveness for the private sector. What is certain,
however, is that the government should enact legislation to prevent any
unseemly union interventions, which tend have a negative impact upon the
economy short-term, but may do so at increased levels in this unstable
climate. At any rate, no action should be undertaken without careful
consideration of its consequences on other aspects of the economy; keeping
in mind that unemployment and economic growth should be the key focuses
of the government’s actions, and that adverse effects on standard of living or
inflation may have to be solved at later convenience, as in, when the global
economy isn’t on the verge of falling apart. [Slide]

Australia has been resilient in recent times, but labour-centric issues are
becoming increasingly prolific for the private, and will only worsen as the
recession lengthens and worsens. Even the country’s biggest corporations,
such as BHP, are not immune to the effects of structural unemployment, nor
to the trouble of trying to balance efficiency with mandated standards
enacted by a government in a very different economic climate. Regardless,
the public sector has to make allowances for its private counterpart in order
to assure the long-term stability of the country’s economy, and facilitate
growth; growth to alleviate the difficulty of a sustained global recession with
heavy and damaging impacts upon Australia’s economy. I urge consideration
and action in equal measure to avoid the end of the semi-free market as we
know it.

Thankyou for your time and attention.

List of References
Economic Growth (n.d.) The Times 100 [Online] Available:
http://www.thetimes100.co.uk/theory/theory--economic-growth--
325.php

Employers Make Cuts Despite Belief Upturn Is Near (23rd Apr 2009)
Dana Mattioli, The Wall Street Journal [News Article – Online]
Available: http://online.wsj.com/article/SB124044674394145857.html

Structural Unemployment (2009) Investopedia, Forbes Digital [Online]

Available:
http://investopedia.com/terms/s/structuralunemployment.asp

BHP to lay off thousands and close Australian mine (21st Jan 2009) New
York Times: Business [News Article—Online] Available:
http://www.nytimes.com/2009/01/21/business/worldbusiness/21iht-
mine.3.19562506.html?_r=1

Brain Makes Splash With Structural Unemployment Message at

Singularity Summit 08 (26th Oct 2008) Institute for Ethics and Emerging
Technology [Online] Available:
http://ieet.org/index.php/IEET/more/brain20081026/

Demand for 'green collar' workers rising (28th Jan 2009) ABC News
[News Article—Online] Available:
http://www.abc.net.au/news/stories/2009/01/28/2476248.htm

Rising Demand for IT Workers (29th Jul 2009) Thinking Australia News
[Editorial Article – Online] Available:
http://www.thinkingaustralia.com/news/brief_view.asp?id=1145

Macroeconomic Objectives (n.d.) Exploring Macroeconomics [Online]

Available:
http://tacticpub.com.au/Exploring/Other%20Exp
%20pages/govt_objs.html

Government Initiatives (7th Sept 2009) Australian Apprenticeships

Training Information Service [Online] Available:
http://www.natinfo.com.au/vet4.cfm?cfid=296&cftoken=

Jobs Fund (2009) Australian Government: Department of Education,

Employment and Workplace Reforms [Online] Available:
http://www.deewr.gov.au/Employment/Pages/JobsFund.aspx
National Green Corps Fact Sheet (2009) Australian Government:
Department of Education, Employment and Workplace Reforms [PDF
ONLINE] Available:
http://www.deewr.gov.au/Employment/JobsandTraining/Documents/Nat
ionalGreenJobsCorpsFactSheet.pdf

Raptis receivership sparks developer concerns (11th Sept 2008) Annie

Guest, ABC Radio [Radio – Transcript] Available:
http://www.abc.net.au/pm/content/2008/s2362451.htm

Retail Industry Award – State QLD (2004) Australian Government

[Consolidated Award] Available:
http://www.fwa.gov.au/consolidated_awards/AN/AN140257/asframe.ht
ml

About Awards (2009) Fair Work Australia [Online] Available:

http://www.fwa.gov.au/index.cfm?pagename=awardsabout

Hoyer Advocates for a Four-Day Work Week (22nd Aug 2008) Joe
Davidson, The Washington Post [News Article – Online] Available:
http://www.washingtonpost.com/wp-
dyn/content/article/2008/08/21/AR2008082103473.html

Improve Employee Productivity, Efficiency & Success (9th Oct 2006)

More Business [Online] Available:
http://www.morebusiness.com/running_your_business/management/e
mployee-motivation.brc

Four-Day Week: a dangerous fantasy (30th Nov 1993) Reginald Dale,

The New York Times [News Article – Online]
http://www.nytimes.com/1993/11/30/business/worldbusiness/30iht-
think_5.html

Would a maximum wage make life better? (6th May 2008) Susan
Janvrin, Just Cause It [Online] Available:
http://justcauseit.com/blogs/susan-janvrin/would-maximum-wage-
make-life-better

Immigration and Inflation (3rd Aug 2007) Matt Nolan [Online] Available:
http://tvhe.wordpress.com/2007/08/03/immigration-and-inflation/
Evaluation of Solutions
Decision Making Matrixes
Issue Solution Pro’s
• provides new skills to out
of work individuals
Opt-in retraining • facilitates transfers
between industries for
schemes newly unemployed
Issue One: • cost-effective; no
unwilling participants
Structural • less draining on social
Unemploym welfare scheme
ent • provides new skills to out
Compulsory of work individuals
retraining • facilitates transfers
schemes between industries for
newly unemployed
• all workers are included
• prevents competition
between private and public
sector
• encourages competition
Wage ceilings within private sector
Issue Two: • prevents corporate
Private v. monopolies on talent of
industries
Public
Fixed
percentage • prevents competition
between private and public
employment sector
limit
Issue
Three:
Governmen
• companies may offer
t Standards products at lower prices
• international
Slash Minimum competitiveness improved
significantly, resulting in a
Wage surge in demand for
Australian exports
• efficiency in terms of cost
effectiveness is improved
Enforce lesser • companies may offer
products at lower prices
working week • international
competitiveness improved
significantly, resulting in a
surge in demand for
Australian exports
• efficiency in terms of cost
effectiveness is improved
• ensures everyone in
Con’s
• may not be taken up by
some individuals
• may result in longer-
term structural
unemployment
• draining on social
welfare
• may have unwilling
participants
• costs significantly more
• may force current
skilled labour overseas
• could prevent foreign
labour from migrating to
Australia
• potential for structural
crisis in future as youth
steer clear of wage
ceiling jobs
• disruption of free
market
• government may be
limited in hiring if private
demand is high
• may be inflationary
pressures
• individuals have less
cash; consumption from
Australian households
lowered
• demand within Australia
may contract
• may cause widespread
poverty and destitution
• entire labour force may
feel alienated by the
radical cuts, and thus not
work as hard
• unemployment may still
rise, causing significant
drain on social welfare
scheme
• individuals have less
cash; consumption from
Australian households
lowered
• demand within Australia
may contract
• may cause widespread
poverty and destitution
 Australia remains
employed
• less likely to alienate,
since there is a trade-off in
the additional day off.
Research Notes
Source One: http://www.thetimes100.co.uk/theory/theory--economic-
growth--325.php

• Economic growth: important if businesses to grow / prosper

 Similarly the opposite is true, businesses must grow to facilitate
the economy’s own growth.
• Growth measured as the change in 'gross domestic product' GDP
of country over the year
 Resultantly, focuses in improving growth must be to increase
the gross domestic product, which can only be done by
increasing the amount (in AU$) of products produced during the
downturn. Can be facilitated by increasing, simultaneously:
supply and demand.
• will grow faster when employers taking on more labour,
 Hence; key focus should be to keep labour at peak accordant to
macro-economic objectives of government. Unemployment
must be reduced as much as possible.
• faster growth: factors of production more productive (production
technologies)
 since growth is facilitated by making factors more productive,
must find ways of making capital, land or labour more efficient.
Most effective way to do so: labour, given topic focus and
current unemployment issue. Efficiency in terms of cost
effectiveness.
• businesses take on more labour + GDP rise = consumers: more
spending money leads to ongoing increases in demand
 taking on more labour: unlikely for current economic climate.
Better to retain existing amounts of labour in order to facilitate
continuation of current demand. Since Aus cannot provide
increased supply, via this reasoning, international potential is
only real chance to do so.
• periods of slow or falling economic growth: bad for business
 no duh.

Source Reliability
British source, however general theory applicable to all economies of
developed world. Self described: ‘resource centre’ for students and
teachers of business studies, produced by MBA and published as part
of ‘The Times Newspapers’ content network under the pseudonym:
‘The Times 100’. Professional layout and design; seems reliable.
(All Emphasis Own)
(Main bullets are direct paraphrases; subs being reflections/annotations)
Research Notes
Source Two: http://online.wsj.com/article/SB124044674394145857.html

• reductions will prove costly when recession ends; angry workers

seek new jobs
 although reductions cause problems in later years, companies
need to do it to save money—else why else would they?
• Kitchen & Bath Center: stops offering employees health care
 Fairly significant motivation factor in U.S. where health care is
primarily private, and corporate packages are important.
 Indicative of bid to save cash and increase cost-effectiveness;
health care being unimportant expense that doesn’t necessarily
improve productivity
• company rid got rid of 401(k) program
 401(k) is the equivalent of super in Australia, similar cuts in Oz
may be potential for future?
• large percentage (what percentage??) of companies: plans for
further layoffs, salary reductions, medical-benefit cuts etc.
 all obvious attempts to save money and retain productivity as
much as possible. Clearly not possible where layoffs concerned,
though salary cuts and health care are.
• 25% of companies are considering layoffs (that percentage)
 survey by Hewitt Associates: reliable figure.
• "It's a long-term solution applied to a short-term problem," -- Jim
Bloomer, (principal at Hewitt's talent consulting firm)
 layoffs not the appropriate course of action? Useful quote to
support? Still, layoffs being conducted all the same with failing
profits.

Source Reliability
American source; applies primarily to United States, though current
movements of companies are being echoed in Australia. It makes
sense that the theory and statistics behind the moves would be similar
as well. Indicative source only. Published by the Wall Street Journal, an
extremely reliable publication. Excellent source in terms of
professionalism, however perspective may be somewhat limited in
applications to Australian companies.
(All Emphasis Own)
(Main bullets are direct paraphrases; subs being reflections/annotations)
Research Notes
Source Three: http://investopedia.com/terms/s/structuralunemployment.asp

• unemployment form: stems from change in composition of

economy.
 Composition of economy changing in regard to demand for
different industry workers and need for greater efficiency
• also opens new positions for trained workers
 positive of structural unemployment? New jobs may be lesser
supply, but if retraining possible, individuals could be retained.
• example: technological revolution—computers eliminated jobs
but also provided new ones for persons with skill to operate them
 similarly efficiency upgrades don’t necessarily have to eliminate
jobs, even if layoffs do.
 Key phrase: ‘persons with skill to operate’ thus people NEED
retraining for effectively overcoming structural unemployment

Source Reliability
Investopedia is a reliable definition site provided by Forbes, a creator
of a respected financial publication, and maintainer of the illustrious
Forbes Lists. Source is effective.

Research Notes
Source Four:
http://www.nytimes.com/2009/01/21/business/worldbusiness/21iht-
mine.3.19562506.html?_r=1

• BHP Billiton said Wednesday that it would cut 6,000 jobs and
close its giant Ravensthorpe nickel mine in Australia.
 Mine closure heralds cut of large percentage of labourers in
physical industries likely without significant skills or training in
other sectors: contributing to structural unemployment. Need to
be retrained!
• had set itself apart by maintaining production
 production is key to retaining jobs, and to continuing to supply
any demand.
• BHP's rival Rio Tinto is already eliminating 14,000 workers.
• Besides a cut of 2,100 jobs in Australian nickel mining, 4,000 jobs
will be eliminated from BHP's global work force of 101,000
 Downturn is global; also gives direct figure of loss to Australian
jobs.
Source Reliability
New York Times article: an effective and reliable source with a fair and
equal perspective with regards to coverage of Australia, given article’s
focus on BHP.
Research Notes
Source Five: http://ieet.org/index.php/IEET/more/brain20081026/

• Martin Brain: projections of widespread structural unemployment

as a result of automation
 Martin Brain is founder of ‘How Stuff Works.com’ and speaker at
Institute for Ethics and Emerging Technology. Structural
unemployment likely to occur due to automation. Is this the
beginning of those increases in efficiency?
• Potential applications of robots could then be in use as
automatons in fast food restaurants, transportation, education,
construction and retail among other areas.
 Many and varied applications. However robots will need
maintenance, more robots will need designing and other
creative jobs are domain of people, still. More jobs may be
available as products become cheaper to produce due to the
increase in efficiency? Thus—increases in efficiency make
products cheaper and more affordable. Solution to structural
unemployment?
• “because of the way the economy is structured right now, when
robots arrive it will have devastating effects on all of us because
there will be so many unemployed people.”
 Similarly, current situation is having similar effects in that many
physical workers (automatons would replace these people first,
in all likelihood) are being displaced from their jobs due to
layoffs. Companies seeking more efficient (robotic?) methods of
completing jobs, or else cutting those that aren’t efficient
enough. However in seeking efficiency, must be more jobs
available?

Source Reliability
The institute for ethics and emerging technology (IEET) is a fairly large
organisation, with links to a very famous internet founder in the
speaker (and source of this transcript) is Marshall Brain. Source is
reliable, even receiving coverage in Wired, the online version of a
popular hard-copy publication.
(All Emphasis Own)
(Main bullets are direct paraphrases; subs being reflections/annotations)
Research Notes
Source Six: http://www.abc.net.au/news/stories/2009/01/28/2476248.htm

• Canberra Institute of Technology (CIT): growing demand for

climate change workers. Improving energy and water efficiency
also important for certain business and industries.
 Indicative of attempts to field efficiency, corroborated by
second sentence. Structural unemployment displaced some
workers, but need to be cost effective creates demand for new
labour.
• Glenn Carter (Canberra Institute of Technology; building and environment
director) says: more workers need to acquire skills in these areas
to meet demand.
 Indicative of structural unemployment, however obviously
shows there is potential for retraining…?
• "There has been a range of industries that have sought for a
change in the skills base and are looking for workers with skills
that address the immediate needs across a range of
environmental issues,"
 skills but not necessarily degrees or diplomas. Potential to re-
train is high given no need for formal education, according to
source.

Source Reliability
Australian source. Popular news broadcaster: ABC, which is an
Australian Government funded public broadcaster. News section
indicates reliable and truthful information.
Research Notes
Source Seven: http://www.thinkingaustralia.com/news/brief_view.asp?
id=1145

• Skilled workers in IT sector; in demand in most states across

Australia.
 Despite downturn, demand for jobs is still high in certain sectors
according to source. Figures with general ideas of structural
unemployment explored in alternative sources.
• need for contractors also on the up according to the latest IT&T
salary index from Australian recruitment company Peoplebank.
 Contracting is a form of employment at least, though not
secured as much as full-time. Peoplebank as a recruitment
company likely to have accurate and effective figures.
• Demand is firm for Software development, Administration,
Helpdesk and Data modelling and some companies are also
seeking Project Managers.
 These types of jobs are indicative of companies seeking to
maximise the efficiency of their information technology
systems. Ideally this would allow productivity to be maximised
by ‘working smarter’ rather than employing heavily in physical,
direct labour.

Source Reliability
Focuses upon Australia. The site seems to be somewhat dedicated
towards helping individuals migrate to Australia, notably displaying
jobs that are in demand. Fairly comprehensive and broad site with
topics from ‘weather’ to ‘finance’ to ‘investing’ to ‘sport’. Partnership
with National Australian Bank (NAB) suggests this source is indeed
reliable, thought content itself is indicative of that regardless.

(All Emphasis Own)

(Main bullets are direct paraphrases; subs being reflections/annotations)
Research Notes
Source Eight: http://tacticpub.com.au/Exploring/Other%20Exp
%20pages/govt_objs.html

In general terms, the economic roles of government are to:

• provide welfare services to those who cannot earn enough income to meet
minimum standards.
• provide public goods (provider has no right of exclusion) and merit goods
(still regarded as useful for society, but users have to contribute to cost).
• influence business activity (through regulations, incentives etc.).
• macroeconomic management (in the Keynesian sense, this is management of
the level of aggregate expenditure in the economy).
 General macro-economic objectives are conflicting with one
another. Must be prioritised in order of importance depending
on current economic climate. For example: recent boom times
were excellent for consideration of social welfare and standard
of living. Recessions, however see economic growth and
reduction of CAD as much higher priorities, necessarily, for
continued survival of government.
• to reduce unemployment.
• to maintain an acceptable rate of growth.
• maintain the low rate of inflation.
• to reduce CAD (current account deficit) and foreign debt.
• to redistribute income.
 Since the government should be focussing on, primarily,
keeping unemployment low and facilitating growth, things such
as standard of living (redistribution of income) are likely to fall.
 Current account deficit is also an important, often overlooked
consideration.
• Although international comparisons are difficult to make, Australia seems to
have a relatively small government sector on the basis of employment,
production and revenue. Government economic objectives: Various reports
have outlined the macroeconomic objectives of govt.
 Despite the size of the government (which is comparatively
small) Australia has adopted a traditionally much larger
government approach. Possibly needs a more aggressive, lesser
developed approach such as those adopted by smaller nations
for excessive growth.

Source Reliability
The Exploring Macroeconomics site is unprofessional and poorly
designed, however the theory itself is sound and well evidenced,
pointing to alternative sources of similar information, including
statistics from ABS and information from the Reserve Bank of Australia.
Despite the less than aesthetic appearance of the site, it is a reliable
source.

(All Emphasis Own)

(Main bullets are direct paraphrases; subs being reflections/annotations)
Research Notes
Source Nine: http://www.natinfo.com.au/vet4.cfm?cfid=296&cftoken=

Source Information
This source is primarily a collection of government initiatives enacted.
The information here is derived, and not directly used. It is an
indication, however of the types of training initiatives enacted by the
government. They are almost entirely trade-centric.

(All Emphasis Own)

Source Reliability
An Australian source: Australian Apprenticeships Training Information
Service who provide the information free of charge. The source seems
wholly reliable, and has links to the relevant initiative’s government
web pages, which are similarly reliable.

Research Notes
Source Ten: http://www.deewr.gov.au/Employment/Pages/JobsFund.aspx

• The Jobs Fund is a $650 million Australian Government Initiative

to support and create jobs and skills development through
projects that build community and social infrastructure.
 Attempt by government to solve three issues with one initiative.
Simultaneously creates infrastructure for the future, whilst
retraining workers with news skills and creating jobs for the
newly unemployed.
• $300 million Local Jobs stream to support community
infrastructure projects with a focus on the promotion of
environment-friendly technology and heritage
 The focus on the environment will allow displaced workers to
become familiar with more efficient business practises and have
useful hands-on experience in an industry area that is currently
in demand, according to other sources.

Source Reliability
Australian Government source. Extremely reliable, direct from the
‘horse’s mouth’ in that this government web page discusses its own
initiatives. Effective and reliable. Bias.

(All Emphasis Own)

(Main bullets are direct paraphrases; subs being reflections/annotations)
Research Notes
Source Eleven:
http://www.deewr.gov.au/Employment/JobsandTraining/Documents/NationalG
reenJobsCorpsFactSheet.pdf

• The National Green Jobs Corps will give young unemployed

people the opportunity to contribute to the community and build
their skills through participating in an environmental work
experience and training program. The National Green Jobs Corps
represents a $77.6 million investment by the Government and
will provide 10,000 environmental work experience and training
places for young Australians aged 18 to 24 years
 Initiative aimed at filling the structural employment gap in the
emerging green technologies. Excellent program for young
persons to experience training and get hands-on experience
with new, green technology.
• help equip young Australians with the skills to fill employment
opportunities in emerging green and climate change-related
industries
 ideally this will lead to a long-term solution to the immediate
problems, whilst also remedying infrastructure problems short-
term, depending on the types of work undertaken within the
program. A short-term solution may be more effectively aimed
at an older age bracket, such as those recently displaced by
structural unemployment?

Source Reliability
Australian Government source. Extremely reliable, direct from the
‘horse’s mouth’ in that this government web page discusses its own
initiatives. Effective and reliable.

Research Notes
Source Twelve: http://www.abc.net.au/pm/content/2008/s2362451.htm

• Receivers took control of the Raptis Group's $700 million

development yesterday, putting hundreds of jobs at risk. The 30
year old development company is blaming the global credit crisis
for its problems.
 Further layoffs potentially, but more likely Raptis’ developments
will stall, and any use for physical laborers as contractors is
drastically reduced. Thus, government initiatives aimed at
supporting local trade are likely to be unhelpful in alleviating
structural unemployment of this kind.
Source Reliability
Transcript of a radio interview involving the Major of the Gold Coast,
Ron Clarke, and ABC radio presenters. The source being ABC News, it
appears reliable and effective.
Research Notes
Source Thirteen:
http://www.fwa.gov.au/consolidated_awards/AN/AN140257/asframe.html

• 5.3.8 Employees preparing ham and/or bacon: Employees

engaged on the tasks of boning ham and/or bacon and preparing
such ham and/or bacon for sale shall be paid $6.10 per week in
addition to the wages prescribed in clause 5.2.
 Example of condition stipulated by the award. Many are overtly
demanding of employers, befitting of a very different economic
climate. The allowances for pay, annual leave, special payments
and significantly more issues are all covered by awards such as
these. How effective are they, however?

Source Reliability
Australian Government source. Extremely reliable, direct from the
‘horse’s mouth’ in that this government award overviews its own
policy. Effective and reliable. Official policy.

Research Notes
Source Fourteen: http://www.fwa.gov.au/index.cfm?
pagename=awardsabout

• Generally, different awards will apply to employees in different

industries. Awards made by the Australian Industrial Relations
Commission contain minimum terms and conditions of
employment.
• Awards can be accessed through the Find an award page on this
website.
• Fair Work Australia is the national workplace relations tribunal. It
is an independent body with power to carry out a range of
functions.
 Awards, according to the FWA contain ‘minimum’ terms and
conditions, and are stipulated as an independent body.
However this body is still focused upon serving the standard of
living as a macro-economic objective—this focus perhaps better
spent upon economic growth. The efficiency of the awards
system clearly leaves something to be desired.

Source Reliability
Australian Government source. Extremely reliable, direct from the
‘horse’s mouth’ in that this government page discusses its own awards
system. Effective and reliable. Likely a bias, however.

(All Emphasis Own)

(Main bullets are direct paraphrases; subs being reflections/annotations)
Research Notes
Source Fifteen: http://www.washingtonpost.com/wp-
dyn/content/article/2008/08/21/AR2008082103473.html

• House Majority Leader Steny H. Hoyer (D-Md.) is pushing a work

week of four, 10-hour days
 Same hours with fewer working days designed to cut costs and
alleviate problems. Also exists as a benefit to employees.
• "many management officials are finding that the use of flexible
and compressed work schedules can help resolve a number of
personnel problems." Those problems include employees with
dependent-care responsibilities. Implementing 4-day work weeks
to conserve energy, reduce fuel consumption, and alleviate
congestion
 Has positive impacts on cost reduction for both companies and
individuals; also solves traffic issues, and allows individuals
more quality time with family and dependents.
• According to OPM, the "use of flexible and compressed work
schedules helped agencies recruit for some hard-to-fill jobs and
helped agencies retain employees who otherwise would have
resigned or been terminated."
 The extra day off exists as a motivational technique for
employees. This could be used to great advantage, as a trade-
off, perhaps, for a slightly lowered wage.

Source Reliability
American source; applies primarily to United States, though logic
remains sound across both countries. It makes sense in theory as
much in the U.S. as in Australia. Indicative source only. Published by
the Washington Post, an extremely reliable publication. Excellent
source in terms of professionalism, however perspective may be
somewhat limited in applications to Australia.

Research Notes
Source Sixteen:
http://www.morebusiness.com/running_your_business/management/employe
e-motivation.brc

• Employees bring their own agendas with them and are only
motivated to get as much work done as will benefit them. That's
certainly not to suggest that employees don't work hard or try to
advance, but there needs to be a tangible benefit to push them
on.
 The ‘tangible benefit’ is the most important aspect of
motivation, according to the source @ Khera Communications.
May not necessarily need to be fiscal.