Here’s a way to fix Australia’s skills shortage – and raise wages at the same time | Greg Jericho
By Greg Jericho,
13 days ago
‘This is blindingly obvious, but often ignored: if you essentially exclude half the population from working in a job, filling that job is twice as hard,’ writes Greg Jericho. Photograph: gahsoon/Getty Images
Skills shortages are nothing new. Ten years ago, when unemployment was 5.9%, I wrote about how business groups were demanding more migration to tackle the skills shortage (they always do). And while migration is often seen as the quick fix, the latest annual occupational shortage list compiled by the Jobs and Skills Australia points to increasing diversity as a much better way to solve the problem.
On Tuesday , the Australian Bureau of Statistics revealed that in the year to August, 1 million people arrived under permanent skilled visas, temporary skilled visas and temporary work visas. That’s about 12% of the 14.4 million people employed:
Of course, this only tells half the story, because people with such visas also leave. The 116,840 net arrival of skilled workers is a much smaller fraction of employment and should assuage those who think the migrants are “coming here, taking our jobs”:
Jobs and Skills Australia’s latest skills shortage list shows even with this level of migration, we still have very high skills shortages.
The good news is the level is lower than last year. Across the 916 occupations surveyed, 33% of all occupations had skill shortages at the national level. The bad news is: that’s still higher than in 2021 and 2022, and the levels are much higher for jobs needing specific skills.
Just over 39% of jobs with “skill level 1” (which requires a bachelor degree or higher) have skills shortages, while jobs with a “skill level 3” (which requires a trade certificate with at least two years of on-the-job training) are very much in need of workers.
This is not surprising when you consider half the jobs in the technician and trades category have skills shortages.
The problem is the lack of qualified and suitable applicants for jobs.
The level of unemployed people per vacancy might give an average sense of how hard (or easy) it is to get a job. But that assumes everyone can apply for every job.
The skill shortages data reveals there are a lot more people applying for each job, but little increase in qualified and suitable candidates applying for jobs:
Just 1% of employers raise the offered salary in response to a lack of suitable applicants. This is a rather telling rebuttal to those who think market forces of demand and supply of labour alone deliver higher wages.
Fortunately, the data reveals that a key solution to the skills shortage is one that delivers higher wages and also reduces the gender pay gap. There is strong evidence that when more men work in traditionally women-dominated jobs, the average pay goes up, and that when more women work in traditionally male-dominated jobs their average pay also rises.
Thus, one of the best ways to reduce the gender pay gap is to reduce gender disparities. Pleasingly, the same goes for skill shortages.
Occupations made up of more than 80% men or women are much more likely to have skills shortages than those jobs where there is a more equal share of both men and women workers:
This is blindingly obvious, but often ignored: if you essentially exclude half of the population from working in a job, filling that job is twice as hard.
And it is not just about more women tradies. The report found that “many ICT-based [information and communications technology-based] occupations … employed men predominately and were also in shortage”. At the other end of the gender scale, jobs “concentrated in health-related occupations (for example, registered nurses), early education and care-based occupations” were also in shortage.
While this is a more long-term solution – because it takes a long time to increase the supply of skilled workers – it is one that should be addressed as a matter of urgency.
A quick solution is for employers to be more open to hiring older workers. Of the occupations with less than 10% of workers aged over 55, 44% had a skill shortage, while just 19% of those with more than 30% aged over 55 were in shortage:
The data also confirms my point from a couple weeks ago when I noted that the government approving new gas mine extensions was taking scarce construction workers away from being able to build homes.
Sixty nine percent of occupations in the construction industry have skills shortages – the most of any industry. And second is mining.
When the environment minister approves a new gas project or coalmine, she is taking construction workers away from the industry with the biggest skill shortage in order to add more work to the industry with the second-biggest skill shortage.
Hardly a smart economic (or environmental) strategy.
Greg Jericho is a Guardian columnist and policy director at the Centre for Future Work
Get updates delivered to you daily. Free and customizable.
It’s essential to note our commitment to transparency:
Our Terms of Use acknowledge that our services may not always be error-free, and our Community Standards emphasize our discretion in enforcing policies. As a platform hosting over 100,000 pieces of content published daily, we cannot pre-vet content, but we strive to foster a dynamic environment for free expression and robust discourse through safety guardrails of human and AI moderation.
Local News
Comments / 0