“What is meant by labour market outcomes? Why are they important in relation to government economic policy and national economic performance? Discuss with relation to recent industrial relation reform proposals.”
...outcomes in shaping their policies. Labour market outcomes based on the price of labour have influenced the government’s policy on inflation and income equality. The government has always adopted a policy of restricting inflation to 2-3% to reduce the chance of the onset of a large recession. To help achieve this, the government has to consider movements in wage rates. The creation of the Australian Industrial Relations Commission in the 1980’s which is still today used to regulate wage rates is an attempt by the government to ensure that wage rates were similar between and within similar occupations. This prevents continuous wage rate increases which are justified by wage inequalities between similar occupations which is a major cause of inflation. Of course, at the same time wage rates have been made flexible between certain jobs to create incentive for economic development. The government recognises that incentive must be in place to sustain economic growth, and there are factors which are considered to help fill voids in the economy which may be hampering economic development. Most importantly, the government have been offering slightly higher wages for many skilled occupations which are currently experiencing a shortage of workers. The main concerns surround the number of doctors and the number of skilled workers. At the same time, the government considers price of labour outcomes to ensure social welfare and equality are maintained to decent levels. The government calls for the establishment of a minimum wage rate to ensure that workers are not expl...