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Focus question 3: How do economic factors shape and reflect the kind of nation we are?

Teaching and learning activities

Activity 1: Changes to the economy - good and bad ESL Activity 1
Activity 2: Changes to the workforce ESL Activity 2
Activity 3: Careers teacher ESL Activity 3

Activity 4: Education and work

ESL Activity 4

Activity 5: Types of work

ESL Activity 5

Activity 6: Jobs and their value

ESL Activity 6

Activity 7: Controlling the market

ESL Activity 7

Activity 8: Should the same laws and regulations apply to all workplaces?

ESL Activity 8

Activity 9: International trade

ESL Activity 9

Activity 10: Trade and work

ESL Activity 10

Introduction

The term 'economy' refers to the way a society is organised to produce, exchange and distribute goods and services to people. The nature of Australia's identity is both reflected in changes in our economy, and shaped by those changes.

Activity 1: Changes to the economy - good and bad

1a Read the following extract carefully and use it to make two lists. Your overall heading should be 'Some Changes to Australia 1988-98', and your lists should be headed 'Changes I Think Are Good' and 'Changes I Think Are Bad'.

It was a decade [1988-98] in which Australians on average became 18 per cent richer. Yet the wealth became more unevenly distributed. Taxes were cut for the rich but raised for the poor. And profit growth easily outpaced growth in wages ... Our health is improving, more of us are better educated, and most of us are richer than a decade ago. And ... yet more of us are worried about the decline of our environment. The population has grown by 14 per cent, yet full-time jobs have grown only 10 per cent and long-term unemployment is up a third. And the richer we get, the less we are sharing our wealth.

Colebatch, Tim, 'Snapshot of Australia: rich, healthier and cleverer but not sharing it around', Age, 4/6/1998. ©The Age.
Reproduced by permission.

1b Compare your lists with a partner and discuss the differences. Be clear about the reasons for your listings.

1c Discuss as a class what this information suggests about how the country is changing.

Activity 2: Changes to the workforce

Work is the way we sustain our lives and produce wealth.

Before European settlement, the Indigenous peoples of Australia worked hard to provide themselves and each other with food, shelter and, in some parts of the country, clothing. They would share the products of their work with their 'family' group, a group much larger than an adult couple and their children. There was no need for taxes in this situation.

Food, shelter and clothing are essential needs, as is the need of children to be looked after. When we talk about work we often forget there is a great deal of unpaid and voluntary work that is essential to the way our nation survives.

When we talk about work, the subject is usually jobs - what jobs you can get, how much might you earn, whether the job will last and so on.

2a Look at Table 6. A 'participation rate' is the number of people (working for pay) expressed as a percentage of the population.

Table 6 Participation in workforce

Year  Male
participa-
tion rates (%)
Female
participa-
tion rates (%)
Overall
participa-
tion rates (%)
Proportion of persons in part-time work (%) Unemploy-
ment rate (%)
Average length of unemploy-
ment (weeks)
Youth unemploy-
ment (%)
1965 83.8 34.1 58.3   9.1 1.2   3.0   2.8
1975 80.5 43.0 61.6 13.6 4.6 12.7 12.7
1985 75.2 45.7 60.2 18.1 7.9 49.5 18.5
1995 73.3 53.3 63.1 24.8 8.1 54.4 19.9

Source of data: 'Australia: Selected employment trends, 1965-1995', in Foster, RA 1996, Australian Economic Statistics 1949 Australian Economic Statistics 1949-50 to 1994-95, Reserve Bank of Australia Occasional Paper 8, June 1996.

2b In one sentence for each column, summarise the changes to the Australian workforce that have occurred in the past 30 years.

2c Both the overall participation rate and the unemployment rate have increased. Why might this be?

2d The number of people doing part-time work has increased. Why do you think this might have happened?

2e Why do you think youth unemployment has increased so much? Remember, many young people are still at school or in further education (university or TAFE). Review your answer after you've completed Activity 4.

2f Which two changes identified in this table will have the most impact on young people?

Activity 3: Careers teacher

Imagine that you have just become a careers teacher. You are making notes for a pamphlet that will give advice to young people who come to you making inquiries about entering the workforce. What advice would you give to young people:

  • to help them to deal with the two important changes you identified in Activity 2f?
  • about what to do if they cannot find a full-time job?

(You will be asked to add to your notes over the next few activities.)

Activity 4: Education and work

What are the chances of getting a job? One factor that matters is education. Look at Table 7.

Table 7 Education and unemployment

Education/training level Unemployment rate (%)
Degree 3.6
Diploma 4.6
Skilled vocational training 6.1
Completed secondary school 8.9
Did not complete secondary school 12.5

Source of data: Australian Bureau of Statistics 1997, Transition from Education to Work, cat. no. 6227.0, AGPS, Canberra, p 12.

4a What difference do you think there would be in the types of jobs available to people with differing levels of education? Make a note of your views in your workbook.

4b Why do you think that education and training are so important in getting jobs today?

4c Return to Activity 2e and complete your response.

4d Put on your careers teacher hat again and return to the notes you are preparing for your pamphlet. What advice would you give to young people about the level of education they will need to find work? How will you convince them?

Activity 5: Types of work

One of the things that will help you give good advice (for Activity 3) is knowing which job areas are increasing and which are declining. One way of describing types of work is by classifying them as production (jobs in which people make or produce things) and services (jobs in which people provide services to other people).

5a Divide these jobs into production jobs and service jobs: builder, school teacher, farmer, rock star, real estate agent, shop assistant, physiotherapist, soldier, miner, fisher, courier, chef, factory manager, writer, model, banker.

5b Look at the graph here and read the extract below.

Proportion of all employed people in the production and service industries

Proportion of all employed people in the production and service industries

Employment has grown significantly in the service sector, particularly in the property and business division and the accommodation, cafes and restaurants division. On a smaller scale, changes in home life have led to an increased demand for services to replace in part those traditionally carried out within the home.

Australian Bureau of Statistics 1997, Australian Social Trends 1997, AGPS, cat. no. 4102.0, p 93. Commonwealth of Australian Social Trends 1997 Australia copyright reproduced by permission of AusInfo.

5c Answer these questions in your workbook:

  • Why do you think the number of people employed in production industries has declined so much in the last 30 years?
  • What have been the main areas of growth in service industries?
  • What services do you think are being provided to replace those which have been carried out within the home in the past? Why do you think there is a demand for these services? Table 6 might help you answer this.

5d Time to become the careers teacher again. What advice would you give to young people about the areas in which they are likely to find work? How would you present this information in the pamphlet?

Activity 6: Jobs and their value

Table 8 Average weekly earnings, selected industries, 1996

recreational worker $682
miner $1172
teacher $775
restaurant worker $567
transport worker $771
insurance worker $805
personal services $696
water supply worker $811
community service worker $722
shop assistant $571
manufacturing $710
 

Source of data: Australian Bureau of Statistics 1998, 1998 Year Book Australia, cat. no. 1301.0, AGPS, Canberra.

6a Divide the jobs in Table 8 into 'production' and 'services'. What do you notice about rates of pay? Looking back at what you learnt in the last activity, what conclusion could you draw?

6b The figures in Table 8 represent the facts. Are they what should be? What jobs are most valuable to the nation? Should pay rates reflect that value? Discuss as a whole class.

6c Make a note of the points raised and agreements reached.

6d Return to the collection of notes you are making for your pamphlet as careers teacher. What advice would you give to young people about how to balance personal interests, the desire to earn a good income and the need to contribute to the good of society?

Activity 7: Controlling the market

The marketplace

If the two adults in a family household both have full-time jobs, we might expect that they will find it difficult to cook, do the housework and look after the garden. So they might buy fast food, hire people to help wash and clean and do the gardening. If they have young children, they might get someone to look after them when they are at work.

This means that there is a new market for people who can provide those services. A demand comes from people who want these services and can pay for them; a supply comes from people who will provide the services and get paid for doing so: and so a market is established. The degree to which markets for goods and services can and should be controlled is an important matter for debate in any country.

Let's go back to the example. The adults want to buy fast food. They can buy cooked chickens for $8 at Chooker Cooker and for $6.50 at Chookerama, so there is competition about price. But one of the adults prefers the way they cook the chooks at Chooker Cooker, and so there is a competition about quality as well.

For the child-care they can get a babysitter from an agency for $15.80 an hour. The teenage girl next door will also babysit for them. She never knows how much to charge, so she says $10 a session, no matter how long. If the 'normal' rates are $15 an hour, should the adults pay that rate? And here's the big question - if they don't, should the government step in and make a rule that $15 an hour is the correct rate for babysitting? If that rule is enforced, will the teenager be out of a job?

7a There is a shop across the road from your school where students can buy their lunch. Your school also has a tuck shop. The school decides that, to encourage students to buy healthy lunches, it will put money towards or subsidise the cost of the food at the tuck shop to make it cheaper than the food at the shop across the road. This money could be used for other purposes at school.

As a class, discuss whether the action taken by the school is a good idea. Is it fair to the owner of the shop over the road? Would students be likely to buy the healthy food because it was better for them without any change in price? Another option for the school would be to declare the shop out of bounds during school hours. Would this be fair? If the shop over the road closed, what effect do you think this would have on tuck shop prices and also on what the tuck shop sells? What would be the effect on other people who buy things at the shop?

7b In your workbooks write down three things you have learnt about how markets operate.

Activity 8: Should the same laws and regulations apply to all workplaces?

The employment market

The Australian government in 1907 had a policy to charge extra (a 'tariff' or 'excise duty') for goods made overseas if they were also being made in Australia. The Australian industry would then have a chance to develop. In return, the manufacturer was supposed to charge a reasonable price for the goods and give the workers 'fair and reasonable' wages and working conditions.

In a famous case involving the Harvester Company, Judge Higgins was asked to say what 'fair and reasonable' meant. The case was famous because he decided the basic rate of pay (the 'basic wage') for all Australian male workers. (Payment for women is another story. It was many years before they achieved equal pay for the same work.) No worker could be paid less. As he said: 'If the [company] profits are nil, the fair and reasonable remuneration ['wage'] must be paid; and if the profits are 100 per cent, it must be paid.'

Judge Higgins was not in any doubt about the purpose of the law. In his judgement he wrote:

The provision for fair and reasonable remuneration is obviously designed for the benefit of the employees in the industry; and it must be meant to secure to them something which they cannot get by the ordinary system of individual bargaining with employers. If Parliament meant that the conditions shall be as such as they can get by individual bargaining ... there would have been no need for this provision. The remuneration could safely have been left to the usual, but unequal, contest, the 'higgling of the market' for labour with the pressure for bread on one side, and the pressure for profits on the other.

He decided that fair and reasonable meant '... the normal needs of the average employee, regarded as a human being living in a civilised community ... a condition of frugal [economical, not costing much] human comfort estimated by current human standards.'

Quotes of Judge Higgins from Commonwealth Arbitration Reports 1908, vol. II, pp 5, 3-4.

Later there were arguments about, for example, how much wheat should be put into sacks (more was better for the farmer, less was better for those carrying them) and the standard number of hours employees could be required to work. So rules were made up to apply to the conditions of work as well as wages.

There have always been employers who found these wages and conditions a problem, who say that the 'contest' is still unequal and that the balance has shifted to the advantage of those who seek 'bread' rather than 'profit'. They complain that the rules about the conditions of work have become too rigid and don't suit all employers, for example those who have slow and peak periods.

8a Following are some pairs of statements. Underline which of each pair you most agree with.

  • All employees should receive wages that the employer can afford to pay.
  • All employees should have guaranteed 'fair and reasonable' wages.

  • It is better to keep wages at a fixed minimum level that allows people to live fairly comfortably.
  • It is better to make wage levels more flexible, and in some cases lower than at present, so that more jobs can be created.

  • Because we need a benchmark to refer to, it is better that there should be rules about working conditions which apply to all workplaces involved in the same sort of work.
  • Because each workplace (even those doing the same sort of work) varies so much, it is better to decide in each case what the conditions of work should be.

  • The government has no business in deciding conditions of work and levels of payment. That should be left to a bargain between individual employers and their workers.
  • The government should set and enforce basic rules about conditions of work and levels of payment because workers never have as much power as employers.

8b Examine the views of the class as a whole by recording the number of votes for each point of view. On which points of view is there most agreement? On which points of view is there most disagreement? What are the reasons for the differences in views?

Activity 9: International trade

Exports are products which Australians sell overseas. Imports are products Australians buy from overseas. Look at Table 9 and then answer the following questions.

Table 9 Destinations of Australian exports and sources of imports, 1950 & 1990 (%)

  United Kingdom Other parts of Europe Japan Other parts of Asia USA Other
1950 exports 39 19 4 11 8 19
1950 imports 53 6 1 14 10 16
1990 exports 4 11 26 25 11 24
1990 imports 7 18 19 16 24 16

Source of data: Foster, RA 1996, Australian Economic Statistics, Reserve Bank of Australia Occasional Paper 8, June.

9a Which parts of the world were Australia's main trading partners:

  • in 1950?
  • in 1990?

9b What is the major change that has occurred between 1950 and 1990?

9c Does this change have any consequences for the skills and knowledge Australians should have? If so, what are they? If not, why not?

9d Should this change have any impact on our migration policy? Or on the sorts of relationships that Australia tries to develop with countries in our region?

The global market

Table 9 shows where our main international markets are at present. But it does not throw any light on how these markets operate. However, the same issues apply as in the earlier discussions about wages; that is:

1 Is there a demand? If yes, can that demand be met on time in terms of cost and quality?

2 Should wages be set at the lowest levels to make our products competitive with those from other parts of the world where labour costs are low? What will happen to workers and their standard of living?

3 Should governments be involved to support and protect national industries?

The biggest economic change in the last fifteen years has been the movement towards a global economy. A global economy is the result of changes in technology, communications and transport. Companies, should they choose and be big enough to do so, can design a product in one country, make it in another and sell it world-wide.

In the past 15 years the government has responded to the first and second of the three issues above. Both people and industries have been encouraged to increase skill levels in order to produce goods of higher value and cost that are in demand. Bargaining about wages and conditions in individual workplaces has been introduced in order that pay, conditions and methods of work can be tailored to suit the needs of individual workplaces.

Activity 10: Trade and work

10a Look back over your work in Activities 2-6. What signs can you find of the impact of globalisation and the need for increased skill levels? You might look at the changing rates in part-time work, for example, and also the information about education, training and employment.

Tariffs

Throughout the world there has been agreement to reduce barriers to trade between countries, such as tariffs. (Tariffs are a tax on imported goods, designed to protect local industries.) Australia has been involved in this process. Tariffs were cut in this country by 25 per cent in 1973, and a further 20 per cent in 1988. Further phased tariff cuts were planned to occur between 1990 and 2005.

The car, clothes and shoe industries in Australia have been heavily protected by tariffs on these goods coming in from overseas. The planned reduction is listed in Table 10.

Table 10 Tariffs for cars, clothes and shoes (%)

Industry 1990 1991 1992 1993 1996 2000 2005
Cars 40 37.5 35 32.5 25 15 5
Clothes and shoes 55 55 51 47 37 25 15

Source: Business Council of Australia.

These reductions mean that Australians will be able to buy imported cars and clothes considerably more cheaply. On the other hand, they will also mean that some Australian producers will find it hard to compete with the lower priced imports. While some Australian companies may become more efficient and competitive, others may not be able to compete and will close, causing loss of jobs.

Supporters of reduced tariffs argue strongly that the number of jobs lost in inefficient industries due to reducing tariffs will be more than offset by a growth in the number of jobs in other areas of the economy, such as in new services.

In 1997 the Prime Minister, Mr Howard, made a decision to halt the reduction in tariffs on clothes and shoes for five years. He said this was 'a very good decision for the battlers of Australia' which would give the industry a 'breathing space' from change. He also said that it was a decision which was designed to give people a greater sense of job security. 'I believe that, as a consequence of this decision, we can look forward to hundreds of millions of dollars of additional investment in the industry over the next few years.'

10b Answer the following questions:

  • Who do you think are the 'battlers' referred to by the Prime Minister?
  • Why would he assume that people would invest 'hundreds of millions of dollars' in these industries over the next few years?

10c As a class, discuss the following issues:

  • Is it better to have cheaper goods for the majority of Australians and more unemployment or more expensive goods and less unemployment?
  • There are a lot of workers whose jobs are 'at risk' because of tariff cuts. What, if anything, can they do to prepare for possible job losses? Should the government help them? If so, how? If not, why not?
  • While some areas of employment are in decline, others are growing. What could be done to support workers moving from areas in decline to others which are growing? Should anything be done? Should the government have a role?

ESL activities

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