Labour+Market+Reform+-+James+Abdo

 Australia’s Labour Market Reform, also known as labour market deregulation, includes a series of actions which are used to reform the labour market in order to assure that resources are allocated efficiently from industrial relations. It generally changes to a system which involves a flexible approach where wages and conditions are closely depicted to an employee’s effort and performance rather than the inflexible system where wages and conditions are set.
 * __Labour Market Reform __**
 * Explanation of how the microeconomic reform works **

 ** How the microeconomic reform helps to boost productivity at the work place ** The labour reform helps to boost productivity because when it is put in place industrial relations become increasingly flexible. This flexibility means that an employee’s wages and conditions are decided on the work the individual employee actually does. This means the higher the level of which an employee is performing at the more recognition they get for their work. If an employee will get paid more for working harder they are more likely to produce more for the organisation, therefore there is an increase in productivity, as the organisation isn’t adding more staff they have the same amount of labour only the difference is there is a greater quantity of finished product. The flexibility also gives employees the ability to dismiss employee’s without reason, meaning employers will be able to remove the unproductive workers and replace them with less workers who are more willing to work and are going to have a better work ethic to increase productivity in the organisation.

Labour reform generally causes an increase in productivity which helps Australia to contain inflationary pressures. Inflation can be caused by a high amount of demand in comparison to available supply; this means there is a shortage of supply. When there are shortages some sort of measure needs to be taken in order to increase the amount of goods and services supplied, Labour Reform aids in this. When the Labour Reform causes an increase in productivity, this means employees are working harder and more efficient therefore resulting in an increase in supply from each organisation. It can also help to reduce the cost of production as organisations will be able to dismiss employees easier and hire other employee’s with a better work ethic leading to cutting costs and increasing aggregate supply of Australia.
 * How the boost in productivity helps to contain inflationary pressures **

Labour Reform can have negative consequences, due to employee’s receiving more pay for harder work a sense of the workplace being unfair and bias towards certain employee’s can develop and an organisation could face large amounts of staff turnover, which damages the effectiveness of the reform and slows down an organisations operations whilst increasing costs on things such as training the new employee. Another negative consequence that could come from Labour Reform is that employers are able to dismiss employee’s easily and if this is over used or abused it could have a dramatic effect on the employee’s mentality towards the company and they will no longer feel as if their job is secure and that they are not being recognised as hard workers.
 * Any negative consequences associated with the reform **