Appl Ex 8y

Application Exercise 8y: The impact of globalisation and International trade on Australia’s labour market


  1. Describe the major changes in employment by sector across the Australian economy between 1990/91 and February


Between 1990/91 there was a significant decrease in the percentage of employment in Australia provided by the manufacturing and agriculture industries. Employment in manufacturing fell from 14% to 6.9% of the workforce, while employment in agriculture, forestry and fishing fell from 6% to 2.5% of employment.


At the same time, there was a small increase in the proportion of employment provided by mining from 1% to 1.9% of employment. More notable was the significant growth in the proportion of the workforce employed in healthcare and social (now the largest industry in Australia in terms of employment) from 8% to 13.9% of employment. Also notable was the growth in employment provided by education and training and professional, scientific and technical services and the slight fall in proportion of employment provided by both retail and wholesale trade. Overall, this shows a shift from primary and secondary industries such as agriculture and manufacturing to tertiary (and quaternary) industries such as healthcare, education and information technology.


  1. Explain the type of unemployment that may be created, or worsened, by the closure of manufacturing company plants and factories within


The kind of unemployment likely to be created by the closure of manufacturing plants in Australia is structural unemployment – where the skills of those seeking work are no longer required in the jobs that are available.


  1. Explain how globalisation has contributed to the change in the structure of employment in Australia since 1990/91.


Globalisation, through the increased reliance on lower cost labour for manufacturing and the removal of trade protection, as contributed to the move away from manufacturing employment and towards service-based employment. Services are somewhat more difficult to ‘global’ – particularly those involving personal care and healthcare (although accelerating technological innovation is making it increasingly possible for some service-based jobs such as teaching, diagnostic services, and even medical appointments to be provided remotely with the aid of computers and an internet connection.)


  1. Examine the change in percentage of employment provided by the mining sector in the last thirty

            a. What percentage of employment is currently provided by the mining sector?

Currently the mining sector provides 1.9% of employment.

            b. How does this figure compare with employment in the same sector in 1990/91?

While the current figure of 1.9% represents a doubling of the proportion of employment provided by mining, the increase in number terms would be much less substantial from around 150,000 to around 300,000 employees (based on a labour force of around 14 million adults in Australia.)

            c. Given the importance of the mining sector to Australia’s recent economic prosperity, were you surprised by this figure?

Given the significant profile of mining in Australia’s economy and its contribution to recent economic prosperity through high commodity prices, and the flow-through effect on the whole economy, it is somewhat surprising that it is a relatively small employer. However, at the same time, mining is a highly automated industry very reliant on substantial use of capital and technology, which reduces the need for labour while still allowing for significant output.