According to the Australian Bureau of Statistics (ABS), 1,044,160 net permanent and long-term arrivals have landed in Australia since the Albanese government took office in June 2022.
New data from Jobs & Skills Australia, collated by Justin Fabo of Antipodean Macro, demonstrates that the record net overseas migration has done nothing to alleviate high-skilled labour shortages, while oversupplying the economy with low-skilled workers:
As you can see, employers have little difficulty filling low-skilled jobs but continue to struggle to fill high-skilled positions.
Indeed, as shown recently by Greg Jericho, there was a severe lack of “qualified and suitable candidates applying for jobs”.
Despite two-and-a-half years of extraordinary net overseas migration, shortages of highly skilled workers have barely improved since the international border reopened in late 2021.
The vast bulk of recent migrants have been low-skilled. This is mostly due to the rise in international students, international graduates, and working holidaymakers. It also reflects the reality that the majority of ‘skilled’ migrants work in lower-skilled jobs.
For example, the 2023 Migration Review showed that 51% of international university graduates with bachelor’s degrees worked in unskilled professions three years after graduation.
Because most graduate visas are only valid for two years, these are likely to be the ‘cream of the crop’, since the lower-quality international graduates likely had already returned home.
International graduates also earn much less than local-born graduates and have inferior labour market outcomes.
Source: Graduate Outcomes Survey
Furthermore, CEDA analysis showed that “skilled” migrants are paid more than 10% less than local employees:
For example, nearly 60% of Australian engineers were born abroad, with more than half working in low-skilled positions outside of engineering, such as driving for Uber.
Cover of Engineering Magazine, “Create” in November 2021.
Deloitte Access Economics uncovered that 44% of permanent migrants in Australia were working in jobs below their skill level in 2023. The majority of these underemployed migrants entered through the skilled stream.
Deloitte projected that over 620,000 permanent migrants work below their skill levels and credentials. Of these, almost 60%, or 372,000, entered the skilled migration system.
The oversupply of low-skilled workers is contributing to Australia’s poor labour productivity, as noted by CEDA:
“Labour productivity and wages are closely linked, indicating that migrant labour is not being used as productively as it could be”.
“This decade, migrants have become increasingly likely to work in lower productivity firms”.
Mass immigration has failed to provide the requisite skills, resulting in ongoing infrastructure and housing shortages, as well as environmental degradation.
The optimal solution is to operate a smaller, highly skilled, and well-paid migration system.
The wage floor for all skilled visas should be set higher than the median full-time salary (currenty around $90,000). All skilled visas should be employer-sponsored, allowing qualified migrants to start working in their field of expertise immediately.
All retirement visas, including parental and ‘golden’ tickets, should be abolished.
The flaws of Australia’s migration system cannot be ignored. Australia is depriving poor countries of talent while worsening domestic skill, housing, and infrastructure shortages.
