Most wage increases occur through a demand-supply negotiation mechanism between unions and employers. These are called enterprise negotiations and usually provide larger income increases than awards There are advantages and disadvantages of using enterprise negotiations to determine wage outcomes

There is an inequality in the distribution of income and the gap is increasing. This has both positive and negative effects Changes in the distribution of labour between occupations and industries gives an indication of changes taking place in the economy. These changes can be cyclical (referring to changes in the overall level of demand and economic growth) or structural (changes due to technology, demand or production) in nature Table 10.7 (pg 147 of textbook) Australian Income Distribution ( )

In addition to ordinary and overtime payments, many workers also receive non- wage outcomes. These come in many forms and vary in each workplace Inequality in the distribution of income can have positive and negative effects on both the economy and society

11. Most wage increases occur through: a)Awards b)Unions c)Enterprise agreements (demand and supply negotiations) d)None of the above 12. Which of the following is not an advantage of using enterprise agreements to determine wage outcomes? a)It makes the labour market more flexible and more adaptable to changing conditions b)It generally produces a larger income increase than awards c)It can increase the gap between the rich and the poor d)It allows the employer to change work arrangements quickly % of all income in Australia is earned by: a)The government b)50% of the population c)The richest 20% of the labour force d)The richest 40% of the labour force

14. Which of the following statements are false: a)There is no gap between incomes within the same occupation and workers with equal skills and qualification b)There is an increasing gap in income between different occupations and groups c)High rates of union membership create more similar wage outcomes in an occupation d)There is a decentralisation of income determination in Australia 15. Cyclical changes… a)Refer to changes in the overall level of demand and economic growth b)Are caused by changes in patterns of demand, production and technology c)Occur because higher rates of union membership create a larger inequality in income distribution d)All of the above

17. Non-wage outcomes do not include: a)Bonuses rewarded for an individuals work performance b)Salaries c)Overtime payments d)Sick leave 18. Which of the following is an economic benefit of inequality in income distribution? a)Consumption of goods and services are reduced b)Entrepreneurs are less willing take risks c)Workers are encouraged to work more hours d)Unequal distribution of income preserves unequal opportunity for better education 16. Structural changes in Australias economy… a)Occur due to changes in patterns of demand, production and technology b)Are reflected by changing patterns of employment and wage levels in Australia c)Have a long-term impact on the level of employment in various industries d)All of the above

20. Social costs of inequality in the distribution of income include: a)Problems associated with class divisions eg. Tensions and disputes caused by workers trying to lift their level of income b)Poverty and the cycles of low income, reduced opportunity and increased social problems that result from it c)None of the above d)A & B 19. Social benefits of inequality… a)Are unlimited b)Do not exist –there arent any c)Reflect an individuals productivity accurately d)May promote a desirable social structure by leading people to believe that the more productive a worker is, the wealthier they will become