Earlier this year, the chair of the Migration Council of Australia (MCA) and big business lobbyist for the Australian Industry Group (AIG), Innes Willox, penned an article in The Australian claiming that “now is not the time to cut migration” because of “skills shortages” [my emphasis]:
Australia does not have a population problem but we do have a skills problem and we do need to get much better at planning our cities, regions and our infrastructure…
Ai Group’s feedback… suggests that skill shortages are re-emerging as a leading concern for businesses…
Ai Group members are increasingly telling us that they are having difficulty sourcing skilled labour, particularly in regard to science, technology, engineering and maths (STEM) skills and other trade-related and technician jobs…
Now, it has been revealed that STEM graduates actually have the highest rates of unemployment. From The AFR:
People graduating with maths and sciences degrees reported a high level of unemployment and said there were no suitable jobs in their area of expertise. Less than half the people graduating with the skill set got relevant jobs within three months, which put them in a category of creative arts graduates…
The latest Quality Indicators for Learning and Teaching report shows 32.4 per cent of science graduates in full-time jobs said their skills and employment were not being fully utilised. And 42.2 per cent of science and maths graduates cited no jobs in their area of expertise as the main reason they are working in jobs that do not fully recognise their skills and education.
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Quite a contrast, isn’t it?
The sad reality is that Australia’s open immigration system has discouraged employers from training young Australians in favour of hiring ready-made and cheap workers from overseas.
Moreover, if skills shortages were pervasive across the economy, Australia would be experiencing strong wages growth. The fact that wages growth is running near historical lows highlights the lunacy of Willox’s argument, as does the high level of labour underutilisation.
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
