Hours can be scaled up and down when demand changes, rather than the alternative of people being hired and fired. The benefits of this were evident during the pandemic and the financial crisis more than a decade ago.
Reflecting this, the RBA has for some time been paying attention to both unemployment and underemployment when assessing the degree of spare capacity in the labour market. Cost control Together, these 3 supply side factors help explain the labour market and wage outcomes over recent times. Strong labour demand was met with a strong supply response.