As Migration Council chair howls “skills shortage”, Aussies can’t land jobs

By Leith van Onselen

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 from a wide range of businesses in a variety of sectors including manufacturing, construction and defence 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…

Over the weekend it was revealed that STEM graduates actually have some of the highest rates of underemployment:

Many STEM-qualified applicants are finding a degree in the strongly promoted subjects is not an automatic passport to a job in the field, said Vicki Thompson, chief executive of the Group of Eight, comprising leading research universities…

The Australian Chamber of Commerce and Industry (ACCI) said science and maths graduates had a strike rate up to 10 per cent below the average in finding work four months after leaving uni.

About 20 per cent of Australia’s almost two million domestic students who graduated in the nine years to 2016 were in STEM disciplines…

“Employers in business and industry were clearly not knocking down their door,” Ms Thomson told the Graduate Employment Outcomes and Industry Partnerships Forum.

NSW Business Chamber CEO Stephen Cartwright said even highly qualified graduates who topped their class found it hard to get a job…

ACCI director of employment, education and training Jenny Lambert said employment outcomes showed some uni graduates struggled more than others, including some who have done STEM courses.

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 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.

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Comments

  1. “Ai Group members are increasingly telling us that they are having difficulty sourcing skilled labour, willing to work for less than the minimum wage.

    Seems that some words were missing…

    • Was just typing out a similar response, glad I refreshed. Would be interested to see them state the positions and salaries they’re short on.

    • Australia already has the highest minimum wages in the world (https://www.businessinsider.com.au/minimum-wage-around-the-world-2015-5) STEM graduates are fungible and anyone who studies STEM and doesn’t try to migrate to the US is stupid. It is the easiest way to kill one’s HECS debt.

      The problem is that the government has set the market price higher than people are willing to work for. People will work for less, especially if they are promised permanent residence.

      This is just how markets work. Don’t hate the player, hate the game.

      • “People will work for less, especially if they are promised permanent residence.”

        You’re making my point for me. Be upfront about it – don’t lie about a “skills shortage”.

      • So Gustav, are you advocating something from the Grapes of Wrath? Do you want to keep importing people until we find people who will work for a loaf of bread to feed their family? The reason our minimum seems high is the cost of living. Cost of housing ensures that we need a decent wage just for basic shelter.

      • Mystic MedusaMEMBER

        So Gustav, do you think that Australias’s most talented and educated young people should leave the country? And that this is a good thing for not just our economy but also social cohesion, families, and communities?

      • @Mystic Medusa (Love your avatar!)

        Don’t you know that’s how markets operate? Get with the program!

        On a less sarcastic note – for the life of me I don’t understand why people engage with professional “because-markets, FOAD” astro-turfers… They have a job to do – to take a dump in the middle of the sitting-room and then walk away: watch everyone get scandalised about the brazen behaviour.

      • Wrong.

        The min wage in San Fran is U$15/hour = A$20.63/hour.

        So the min wage in Sydney should be at least A$20/hour.

      • This is just how markets work. Don’t hate the player, hate the game.

        Nothing wrong with the game. It’s the referee throwing it because some high rollers bribed him that’s the problem.

      • ErmingtonPlumbingMEMBER

        “Nothing wrong with the game”

        HA!!!!!,…gotcha!!!
        I knew you weren’t a “proper lefty”,…..”Dr Smithy”

  2. Skill shortage BS is just that, companies love workers being flooded into our country, keeps wages down and gives them a big pool of ready and willing workers to chose from.

    I know quite a few people who are underemployed or can’t find work, seems to be getting worse too.

  3. Where I work this is the norm as well. Bring IT workers in on 457 visas and don’t bother employing IT graduates.

    • They’ll tell you… you don’t have the skills even if you have. Ask any CS/Eng professor how many local students each year get jobs, while most big gov IT contract houses hire 90% or more foreign workers. In software dev it’s always been better to leave Oz though to get better work and much higher salaries and benefits, especially in the US.

  4. business conditions have turned, if you don’t have Govt or construction work there is hardly anything happening in Sydney, people are spooked!
    its a situation only moar immigrants can fix

  5. Good job that Scottish immigrant and ex-Fairfax journalist turned professional spin doctor and PR heavy weight, who is the inventor of fake immigration ‘compacts’ and flaky websites that promote dodgy ‘demographers’, will make sure that we never have a shortage of spin.

    The slime trail that leads back to Mr McBollox, Dr Liz Allen and Dr Smiley McDonald and a breadcrumbs of funding originally injected by the Scanlon property development empire into “demography research” will win a journalist a Walkley Award one day – and make some powerful enemies so that they never work again.

    Unfortunately if you are from the ABC and have actively promoted Dr Liz Allen and platformed Mr McBollox as a tin god of business you’d be a bit shy of this at present. And if you are an ANU VC, you’ve homed a transparent bit of ‘demography for cash’ paid for by property developers. You’d also be a little concerned about making the arrangements known.

    • Your message seems to be heavy with uh… supplemental knowledge/facts inquiring minds want to know! 😀

  6. I dare Coxhead to say ‘ Skills Shortage’ in the lobby of a Royally Rorting Job Network Provider-He’d get the paddling he deserved .

  7. Darren Cotterill

    I’m starting to find the posts/discussions here around skills/immigration quite frustrating recently, as the general ‘anti immigration’ view seems to be blinkering balanced views. I can see that it’s a strongly held view, but it really feels like anything is being posted to try and prove the point, more than an unbiased consideration of differing views.

    IMO, there are multiple scenarios at play here, and it’s a situation where both sides of the debate can be ‘right’ in some context, but this doesn’t seem to ever be acknowledged here.

    As I see it there are 2 main scenarios in play:

    Some companies taking advantage of immigration / lower salaries to employ overseas people instead of locals. This is clearly not ideal, and the policies for skilled migration should prevent this. Increasing base salary expectations for roles is an easy fix for this.

    Some high tech companies that really are looking for expertise and experience who are willing to pay above market rates, but simply can’t find enough people. For graduates, if there is access to skilled migration, the salaries won’t drop, but the bar for skills will raise, which may end up with fewer local hires. This is partly ok (the company gets better people and can achieve more) and partly not (‘better’ people from overseas will get preference). Local grads need to step up to meet this higher bar and can’t expect that just getting a degree is enough to walk into a top tier job. Recent visa changes have made this kind of hiring more difficult.

    I’ve been in the position of hiring into a high tech firm for several years where we would have hired more local grads if we could find the right quality, but ended up just having fewer grads. This was for roles with $80k base salary (~$100k) package in their first year out of uni, so certainly not looking for ‘cheap’ people.

    Although they seem to be a good target for bashing on this site, I believe Atlassian, for example, are more in this second scenario than the first, but a lot of the commentary here seems to just group them all together to try and prove a point.

    I’d love to see some analysis with careful consideration of these differing perspectives (which certainly do exist), and how prevalent both are, instead of just taking one side every time. I think good skilled immigration policies can work to benefit both situations, i.e. prevent hiring from overseas because it’s cheaper, and allow access to more people when they are really needed.

    Please don’t just troll me with ‘cheap 457 immigration’ replies (you’ll just be proving my point), but if you have some evidence/analysis that further uncovers both sides of this argument, I’ll happily be further educated.

      • Thanks for this, I had a quick read through.

        TBH, I was a bit surprised at this being such a high percentage:
        “some 76 per cent of the 7,542 457 visas issued in the three IT occupations listed were to Indian nationals. The great majority of these were sponsored by Indian IT service companies as intra-company transferees…”

        and this does indeed support my point that there is ‘bad’ skilled migration going on, which I completely agree should be stamped out or reduced significantly (and I think minimum salaries would achieve it fairly easily).

        However, there’s still no discussion or acceptance that the other 24 percent of IT skilled migration (or some portion of it), is extremely valuable and necessary. I worry that the attacks on the ‘bad’ migration hurt the necessary migration more. I only have anecdotal observations over the last 6-12 months, but it certainly seems that way to me from speaking to peers in the industry who are growing and hiring. i.e. it’s more difficult for tech companies to hire really experienced highly skilled people from overseas if they can’t find them locally.

        It would also be great to see similar stats more recently as this is almost 2 years old.

    • Im intrigued what the right quality means in terms of a graduate… sounds an awful lot like the justification i see all the time for importing someone who just happens to be cheaper.

    • Even StevenMEMBER

      Thanks for your post Darren. I think you correctly identify the trade off of immigration for purposes of filling roles.

      I expect the reason MB takes such a strong position on the downsides of immigration is partly to counter the lack of balance in the mainstream press on this issue.

      To Leith’s point, MB is not advocating a complete ban on bringing in workers – but merely to introduce a reasonable threshold to reduce rorting.

    • @Darren Cotterill: A related problem is that many companies now expect to get exactly what they are looking for. In the old days they would spend money training and developing existing employee’s skills or getting a smart new hire and training them up.

      Atlassian, who you mentioned, used to do lots of this. Now they are listed on the Nasdaq, they seem to save costs by importing cheap labour from Vietnam.

      IT is a field that changes quickly and you need to retrain your staff. If you don’t staff will also leave for other jobs where they can stay up-to-date.

    • I recall reading that Atlassian hire only 1 in 150 applicants. Which brings me to this point you made: “we would have hired more local grads if we could find the right quality”

      What exactly are you expecting from a university graduate? Is Australia’s tertiary education system so terrible that close to 100% of graduates are not suitable for an entry level role?

      • I’ll take a shot at answering this (and hopefully also replying to @kneelo)

        The expectations I had for graduates were:
        – High grades in their course (mainly D, HD)
        – Ability to code basic problems (given a written test)
        – Ability to solve a technical problem in an interview situation
        – Ability to show some kind of passion about the industry.

        Many, many 3rd year students badly failed basic programming tests, even if they had high course marks at that stage. I know there are a lot of good courses at Oz Unis, so I don’t want to be too negative about them, but it was quite alarming to see some of the results.

        Part of the problem I think we have is that we’re way behind on programming/ tech skills by the time people get to Uni. There is hardly anything taught in schools before that. I personally volunteer to run a Code Club at my kids’ primary school, as they don’t have anything else in the curriculum. It’s hard to catch up at Uni if you’re ~10 years behind at the start.

        The last point on ‘passion’ is a difficult one to measure, but I at least expected people to have some sort of interest in either programming, or technology outside of their course. A simple case of a small pet project, or answering questions like ‘What have you learned recently?’ or ‘What have you found most interesting in technology recently?’ are often left with blank stares.

        I do confess that the bar has probably increased, and as you get some people at the top end with the ability to pass these kinds of interview processes, it gets harder and harder for the people who just do their course and nothing extra. Whether that’s a fair expectation or not I don’t know, but it’s reality.

      • I already knew the answer. The best of the best come at a premium that you are not prepared to pay. It is not a skills shortage at all.

      • Yes, you”re right. We were not prepared to pay more than $80k base (over 100k package) for graduates, no.

        Most other companies wouldn’t be able to pay more than that either.

      • @Darren
        Where exactly are these 80k salary jobs located? Could you afford to live there on 80k?
        If it’s in Sydney the answer is an outright no, so I’m not surprised you can’t get the cream of the crop to work for non livable wages, or commute for 4+ hours a day.

    • I’ve been in the position of hiring into a high tech firm for several years where we would have hired more local grads if we could find the right quality, but ended up just having fewer grads.

      Let me guess.
      You wanted a graduate with 4 years experience in blockchain development and couldn’t find one. Your recruiter (not Australian born) agreed that your requirements were reasonable, and he could find a resource for your role.
      You ended-up hiring an experienced Indian with an impeccable CV, which you didn’t bother to verify. It would have been too hard anyway with all those highly-technical senior roles he had held in India before coming here to study (hair dressing).

    • “I’d love to see some analysis with careful consideration of these differing perspectives (which certainly do exist), and how prevalent both are, instead of just taking one side every time.”

      Me too. But don’t you think that the asymmetrical focus and lack of genuine debate in the MSM has something to do with the jaded reaction that you see here?

      This was once the role of public institutions (e.g. Commonwealth public sector, CSIRO, ABS and universities) that now sing from the same purchaser-provider prayer book.

      What you are rightly pointing to is a symptom of a central issue in Australian governance and the media. Governments now ‘sell’ policy via public institutions and use funding directed to institutions to ‘promote’ ideas. There has not been an investment in the alternative. The very concept that the public sector is all about balance and independent advice was lost decades ago.

      Instead there is some very substantial evidence that a war chest of funding by developers has driven a public relations approach to promoting mass immigration in Australia – it is brazen. It is precisely because of the lack of balance that a blunt rejection of the current MSM agenda is growing.

      Your concerns have merit, but they must be broadly and fairly applied with context. Dissenting voices have not been given a fair go for a very long time and there has been no democratic process entered into – by any party – to test the wishes of the Australian public.

      Certainly the broad issue of mass immigration has not been properly analysed because it is not in the interests of many to do so. Back at the time that Scanlon-funded “demographics” got going quite a few academics were clearly not invited to contribute or were de-platformed.

      But the main issue is this. An on-going PR campaign began over a decade ago that has resulted in elites making decisions about population policy. Not only is this ‘unbalanced’ it is anti-democratic. That the MSM have routinely ignored this lack of balance means that the pressure is building to reject this model of governance. Should the Australian people have a say in how their nation is built – or just elites who will tell people the narrative that suits?

      I want population policy to be evidence-based and not ideological or driven as a tepid economic knee jerk. That requires a commitment to open and honest debate and democracy. Just where do you see that commitment realised presently Darren?

      • I don’t disagree with you, and I expect you know a lot more than I do about the politics of immigration policy and it’s history. I certainly believe a lot of what’s happened has been problematic and I can understand why the knee jerk reactions come about.

        A few other people mentioned that the MB view is so strongly pushed because of the lack of MSM consideration, which is a fair one. I think one of the reasons I wanted to make my original point though, is that I’d like to see the commentary here balanced in it’s own right (and ideally just ignore the MSM crap), instead of just presenting opposing views because they are missing. I think this happens in most cases, but this immigration topic doesn’t feel as balanced to me as usual.

        After reading a few more linked related posts, I may well be somewhat forming a MB sentiment from the articles along with the (often less informed) comments, which is a bit of a mistake. I do think the main posters have some similar views to myself, but I only posted my thoughts because I was starting to feel like it was very skewed and it was putting me off reading.

        I think I’d just like to see a clear view that acknowledges some need for skills based immigration, despite the fact that a high percentage is currently rorted, which needs cracking down on.

        “Just where do you see that commitment realised presently Darren?”
        I’m not really quite sure how to answer this, sorry :-/ Or was it rhetorical?

    • Darren Cotterill,

      Aussie graduates were given A$80k/year salaries in 2008. After 10 years of inflation, you still offer $80k/year?

      Of course we are ok with importing staff on $150k/year salaries. But the minimum salary on the 457 visa is an outrageously low $53k/year. And there is no jail for wage theft – so most 3rd world IT workers here are on $22k/year!

      Does Atlassian complain about that? No. They say the opposite: “work visas are too hard to get, make them easier to get”.

      If there is now a bit more paperwork involved with importing 45 year olds on 457 visas, maybe the ones on $22k/year have spoiled it for those on $150k/year?

      You can easily hire Kiwi graduates: Australia has an open border with NZ, Kiwis speak the same language, watch the same sports, have almost the same culture. Have you advertised on Seek.co.nz?

      We need a 2 tier work visa system: make the minimum salary on the 457 visa $100k/year for 1st world passport holders and $130k/year for 3rd world passport holders because there is a massive risk that the 3rd world male will hand back most of his salary to his boss and work for $22k/year.

    • I’ve worked in IT nearly 30 years as a developer and have seen the landscape change drastically in the last 10 years.
      When I started the breakdown of nationalities in most work places was in the order of Australian, European, Chinese (or other asian minorities) and then Indian.
      It turned very quickly over a few short years to where Indians were/are the dominant group by nationality.
      Why? Well India did start a big push into IT. They started offering offshore / outsourcing options at very cheap rates. Unfortunately you get what you pay for IMO, especially with a country just moving into that space). A lot of companies took up this offer however and that’s when some local jobs started disappearing.
      After a while they started to push the onshore model utilising our 457 visa to great effect. The lucky ones that came here realised what a sh*thole they came from and after two years applied for PR (and got it). This started the ball rolling. The Indian outsourcing companies then had to bring in more workers and rinse and repeat. Slowly but surely the number of IT workers swelled, wages stagnated and the competition for jobs increased to the point that many locals gave it away because the rewards for continual learning were just not there and so the nationality makeup of the industry changed forever.
      The local IT workers will continue to be displaced due to the fact that no local company can compete on cost. It doesn’t matter how good the locals are compared to overseas workers, cost will win out most of the time (except where AU Security clearance and other nuances are required).
      What annoys me is we are constantly told that the 457 visa is so companies can bring in ‘Facebook’ type engineers who have skills we don’t have. This is the biggest porky pie I have heard. In all my years working side by side with many many Indian developers I have probably met about two that I have tipped my hat too. The rest were average at best or incompetent on a good day. They certainly aren’t all ‘Facebook’ engineers. Don’t get me started on their dubious CVs and qualifications.
      The only way to stop the flow and break the cycle is for the government to encourage (tax incentives etc) the hiring of local graduates so these start flowing through the system and eventually there will be no justification for bringing in overseas workers.

      • zaxxon, thanks for your insight.

        If you look at Dilbert cartoons, there is a character called Asok. He first appeared on 18 March 1996.

        Apu first appeared in The Simpsons on 25 Feb 1990.

        So that is about when they started coming in. But as time went by, the Indian IT firms realised that they can pay illegal wages and nobody will give a damn.

        Infosys got listed on the NASDAQ on 11 March 1999. So they were big by then.

        Here is a video I saw on the ABC in 1999 about Indian IT: https://www.youtube.com/watch?v=bliVSa6o5Wo

        Funny how the Infosys founder says “legally and ethically” in the 1999 video but by 2015, they were importing cyber coolies into Australia and paying them illegal wages (just $22k/year).

        Infosys has just been fined U$34 million for visa law violations.

        Aussies have stopped studying IT because it is now a low wage profession. The solution is to put a massive tax on every 457 visa – $50k/year per visa.

  8. scottb1978MEMBER

    So what are the best paths for young people to take to give them the best chance of jobs, career & wage growth.

  9. Why don’t they rename it the “More money for Peter Scanlon and the Smorgons” Council”?

  10. There is a jobs shortage for fairly paid jobs. Plenty of jobs for highly skilled individuals willing to take on lousy wages.

  11. Even in 2008, smart Aussies were working for $16/hour. Even in 2008, there were a million unemployed people here.

    Angus Willox constantly lies and the Greens believe him!

  12. The key sentence is this one…

    “and other trade-related and technician jobs…”

    See, now we have sandwich technicions, Gillard gave us KFC chicken technicians, Uber driving technician, bicycle delivery technicians, food service technicians, nail technicians, massage technicians…. If we got a few skilled people in with all that, well thats just the cherry on the cake!

  13. Dont agree. 20 years as a software dev and IT, out of work as of last week. Met with 7 agencies so far. All i get from them is yes huge demand huuuuuuuuuge demand. Nothing. Not a sausage. Because the companies they all want degress. No degree no work. No compromise. Just got told this week by a recruiter on linked in such a huge demand employers cant find enouogh developers. but they cant hire the applicants they want because they are all from overseas and dont have the work rights for here. So basicly they prefer to hire a overseas applicant with crappy english, that claim to have a degree from a university overseas that is completely unverifiable, as opposed to someone who has worked for 20 years with unblemished record no criminal history and turns up every day for work, stays late for deadlines, is an effective and articulate comunicator, does a good job with great references but does not have a degree. someone tell me why is that ok.

    • That is appalling, but believable.

      My brother told me that companies prefer to arrange Ukrainian programmers to come to Aus, be put up in Airbnb, paid in their home currency at home and given $20AUD per day here for food here. My brother shared an Airbnb with one such and he shared his food with the import since $20 didn’t buy the poor sod enough to eat.
      The local hire can cause more trouble with unfair dismissal, asking for minimum wage, fair conditions etc. The import can be cut off as soon as he complains about a thing.

    • Sadly this is just the way it has been in Australia for the last few years. Personally work as an IT consultant. Allmost all IT companies are now in on the visa rort. The multinationals are the worst. Don’t employ locals anymore. Cheaper to fly people in from India for projects on short term visa or 457.
      Previous offshore outsourcing has now been onshored as well. Witnessed this first hand.
      Worked at a client and in the 2nd week there allmost all IT staff were made redundant. In the door walk the Indian workers from the Indian multinational and take their seats in the place of the redundant employees. The Australian visa system at its best.
      Locals are no longer required. You are all obsolete.
      2 weeks later half the people in finance(allmost all procurement and payments) sacked.
      Same scene act 2: in the door walk a new group of Indian workers on 457 visas.
      Your time is limited as there is a new limitless supply of these workers compared to the Australian workforce numbers. Admin office workers can all be replaced. All back office/admin functions are targeted.
      A bit of a sickening experience, but that is what is allowed under the current migration regime.

      • Pieter, that is absolutely sickening. We really need to put a massive tax on each work visa.

        Jail for wage theft would be nice. Hope some IT bosses are jailed in Vic when Dan Andrews wins the election.

    • It’s not just IT, it’s across the board. Degrees are the first scythe used to cut down the vast number of applicants for any job to something vaguely manageable.

      It is a product of a) the jobs shortage and b) managerialism.

      That said, a good recruiter should have a good enough relationship with the hiring party to be able to circumvent that requirement in cases like yours, with high levels of (presumably) genuine experience.

      • drsmithy,

        It is amazing to see you say “jobs shortage” when the latest news says “regional aircraft pilots in AUS get paid A$65k/year” and the LNP has recently decided to allow Qantas to import 3rd world pilots who are willing to fly aeroplanes for $20/hour.

        The Greens have probably said nothing about it because it would be “racist” to.

        As for the “degree” filter. Is it really a filter when the ALP wants 50% of year 12 finishers to go into “uni”? It is absurd to pretend that a “degree” obtained in a 3rd world slum is as good as one obtained in Cambridge Uni. Far better to use passports as the initial filter and get candidates to come into a building and do an online multiple choice test.

        Alternatively, the boss could ask his subordinates, “will any of your mates would be happy to work here?” – unless of course the boss is proactively seeking to import someone willing to work for $10/hour.

  14. 1.3 million Australians unemployed.
    1.1 million Australians seeking work.
    Many skilled.
    Fact check. Roy Morgan latest stats.
    Unemployed & seeking work rising sharply.
    Record numbers of unemployed & seeking work.
    https://www.roymorgan.com/findings/7683-roy-morgan-australian-unemployment-july-2018-201808100237

    Where is the ‘skill’ shortage ?

    “Oh but it’s in the Regions & Rural areas, they are crying out for more people, migrants”

    Nope.
    In many cases in the Regions and Rural areas it’s a case of double or triple the national rate of unemployed & jobless seeking work.

    https://aifs.gov.au/publications/family-matters/issue-37/regional-disadvantage-and-unemployment

  15. Of course he’s going to say that. Much like how we have a racism commissioner, who unsurprisingly finds racism everywhere.

    Folk who are healthy don’t make doctors wealthy….