ABC business report, Daniel Ziffer, claims the “exodus of about 500,000 people” over the pandemic when temporary migrants went home caused an acute labour shortage, which forced employers to take on staff that they previously would have ignored.
“In September last year, for the first time since the labour markets were deregulated in the 1980s, there were more job vacancies than unemployed people”, Ziffer says.
“Businesses desperately needed workers”.
“Previously they could rely on a deep pool of people available to start immediately”.
“Now they’re having to work a little harder, taking on staff who may need a bit more help to get started”, according to Ziffer.
Jeff Borland, professor of economics at the University of Melbourne, seems to agree noting that “young people benefit the most” from low unemployment.
“It’s often described as sort of the ‘rising tide lifts all boats’.
“But it especially lifts the boats who we worry about for economic inclusion: young people, people with disabilities, people in regions where employment rates are lower, people with less education”, said Borland.
The ABS’ labour force data clearly shows that labour supply growth was stunted by the collapse in immigration:
This stunting of labour supply, in turn, meant that new jobs created went to local workers instead of migrants, which drove the unemployment rate down to near 50-year lows and participation rates to their highest level on record:
The problem looking ahead is that the Albanese Government has ramped immigration to record levels, with Westpac estimating that 400,000 net overseas migrants landed in Australia in 2022 (most of whom arrived in the second half).
The impact on labour supply has been nothing short of astonishing, as illustrated in the next chart by IFM Investors chief economist Alex Joiner:
According to Joiner: “Labour supply accelerated in growth terms and outright numbers. Unless revised, the population will expand by 124,000 people. And assuming today’s participation rate persists, the economy will need to create 82,450 jobs in the quarter to keep the unemployment rate stable”.
Indeed, Roy Morgan Research’s latest unemployment estimates show the population aged 14-plus soared 513,000 in the year to February 2023 amid record immigration. And this lift in labour supply easily outpaced the growth in jobs, resulting in higher levels of unemployment and underemployment:
As explained by Michelle Levine, CEO of Roy Morgan, “with immigration returning after the pandemic, people are entering Australia in record numbers. The population in Australia increased by more than 500,000 in the last year alone, clearly impacting the employment numbers”.
“Overall, the Australian workforce is growing rapidly. And there are many new jobs being created. However, there are simply not enough jobs for all those wanting to work. Hence, the increases in unemployment and underemployment”.
A slowing economy with strongly growing labour supply via immigration is a recipe for much higher unemployment and falling wage growth.
So much so that it even has Australia’s biggest immigration shill, Abul Rizvi, concerned:
The employment boom is clearly over for young Australians, stopped dead by the Albanese Government’s record immigration influx.
Good luck trying to find a rental as well.
