Discuss TWO key issues facing the labour market in Australia in 2012. Explain TWO government policies that may be implemented to address these issues

There are two main policies that the government has implemented to address the skills shortage. The Australian government is attempting to increase the labour force participation to fulfil the growing demand for certain skills in certain industries. The government does this by retaining older works with specific skills and encouraging more workers such as younger workers and females to acquire higher levels of education and training. Another policy that the government implements is skilled migration. The government attempts to increase the supply of skilled labour through an intake of skilled migrants in specific occupations and industries. Encouraging immigration also simply increases the aggregate supply and hence the supply for labour. Through manipulation such as incentives, the intake of skilled migrants can also be reviewed to meet economic requirements. Through the operation of these policies, the government can address the issue of a skills shortage in the Australian labour market.

While skills shortage is a key issue the Australian labour market is currently facing, casualisation is providing to be an issue as well. Casualisation is the trend towards outsourcing and use of casual and part-time labour through the changes in the labour market in terms of increased employer demands for flexibility and the growth of part-time employment. The Australian Bureau of Statistics defines a casual job as a job without paid leave entitlements, but the essence of a casual job is that the employee is expendable. Currently, one in five workers in Australia are casual workers in the labour market. For some people, casual jobs are the only jobs they can find, and for these employees, casual work is uncertain and unsettling as it does not result in a secure income. This is also one of causes of the increasing rate of underemployment in Australia. Casual workers are also used instrumentally and strategically by their employers in ways that permanent employees are not. For example, it is common that casual staff would be employed to cover busy periods in the business cycle and then be laid off. Despite casualisation being advantageous to employers, employees are being neglected and the government can implement policies to give casual workers more security.

The Australian government currently does not have any policies in place protecting the labour market from trending towards an increase in the casualisation of labour. The growth in casual employment has given businesses greater flexibility in the management of their workforce, which in turn has contributed to a more efficient use of resources stimulating economic growth. The government may implement a policy giving casuals the ability to convert to a permanent status. Although this will likely create a more rigid labour force it will ultimately give casual workers a more secure and certain flow of income. The Australian government may implement this policy to address the issue of casualisation in the Australian labour market.

The Australian labour market is very dynamic as it responds to technological, economic, demographic and social changes of the country. These can affect the demand and supply of labour in our market and economy on many levels. Two key issues that the Australian market is currently facing are skills shortages and the casualisation of labour, and the government has the choice to intervene to implement policies that can help prevent them from stifling the economic growth of Australia.