Decentralisation of the Labour Market (HSC SSCE Economics): Flashcards
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Centralised labour market
Centralised labour market
Wages set by govt/tribunal across multiple workplaces
Decentralised labour market
Decentralised labour market
Wages determined at workplace level by market forces
Year Australia began shift to decentralised wages
Year Australia began shift to decentralised wages
1991
Enterprise bargaining
Enterprise bargaining
Wages negotiated at workplace/company level
Decentralisation benefit: resource allocation
Decentralisation benefit: resource allocation
Efficient firms offer higher wages, attract skilled workers
Decentralisation benefit: productivity
Decentralisation benefit: productivity
Workers incentivised to improve efficiency for wage rewards
Decentralisation benefit: economic shocks
Decentralisation benefit: economic shocks
Wage flexibility helps reduce unemployment during downturns
Decentralisation drawback: wage inequality
Decentralisation drawback: wage inequality
Greater wage dispersion; same job, different pay
Decentralisation drawback: bargaining power
Decentralisation drawback: bargaining power
Weak unions/workers less likely to get wage rises
Decentralisation drawback: enforcement
Decentralisation drawback: enforcement
Harder to enforce wage entitlements; underpayment widespread