Migration Council howls “STEM shortage” as Aussies sit idle

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… 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.

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.

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Comments

  1. Huge shortage of STEM candidates in Australia. You try getting programmers and Engineers in Sydney who will work for 50K a year.

    • > “programmers and Engineers in Sydney who will work for 50K a year.”
      You can easily import them at this price, say like Atlassian does with programmers from Vietnam at $53k per year.

      This is why the local STEM grads with piles of HECS debt cannot find a job. Unfortunately for them, they need to lower their salary expectations.

      There is no shortage of STEM talent, there is a shortage of cheap STEM talent.

    • This. The shortage is massive.

      Not sure where these figures come from, but they’re way out of line with my experience.

      If you’re a half decent programmer these days, you’ll have a job in less than a week. Contract or perm.
      In fact, salaries in IT have increased tremendously if you’ve kept your skill-set up to date. Anyone with decent AWS experience can pull $160k easily from the big banks.

      • The problem is that the quality of the STEM graduates that our universities are pushing out is rubbish. I interview many of them, and most of them are just here for the visa, and the universities just pass them anyway. Many, even with Masters degrees, lack basic skills.

        Our degrees are worth way less than what they were 10 years ago.

      • Surely this is self-fulfilling? If you make it possible to import all the labour that employers require cheaply then the incentive to train local people is zero.

        Allow virtually unrestricted imports and nobody trains locals – nobody trains locals and you need to look to imports. A self-perpetuating cycle.

      • “Anyone with decent AWS experience can pull $160k”

        But Aussies can not get 10 years of AWS experience if you are giving the entry level jobs to 45 year olds with 3rd world passports.

    • “Huge shortage of STEM candidates in Australia. You try getting programmers and Engineers in Sydney who will work for 50K a year.”

      What kind of engineers are we talking about? That’s the cost of hiring a school gardener/janitor.

    • +1. There was a similar discussion a few weeks back. Someone commented there was indeed a shortage but when I dug a bit deeper the truth came out:

      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.

      There is a shortage of the top 1% of students. There are only 1% of them, and they are not prepared to accept a slightly better than average pay.

      https://www.macrobusiness.com.au/2018/08/migration-council-chair-howls-skills-shortage-aussies-cant-land-jobs/#comment-3164925

      • And then you have fscked in the head interview panels who are not interested in hiring someone who might display an ounce of critical thinking or they’re too ‘alive’ because that upsets their little status-quo and might be construed as ‘potentially gunning for their places later’

        Yay!

      • “coding to primary school kids (way too young to learn it)”
        Kids in primary school are perfectly capable of learning coding if taught in an appropriate manner. All the 3 year olds I see seem perfectly capable of operating tablets and phones these days.
        It’s also nothing new.
        From https://en.wikipedia.org/wiki/MicroBee
        “a successful bid for the New South Wales Department of Education computer tender” and I used them for some simple coding in primary school in the 80’s.

      • @Jacob

        Yeah, that would be me 🙂

        “He pretends to teach coding to primary school kids (way too young to learn it)”..

        Really?! I “pretend” to do it? What an idiotic comment. I wonder if the other 165,000 primary school children in 2,200 schools around Australia are “pretending” as well.
        https://codeclubau.org/

        “…and then gives the jobs to 457 visa staff anyway.”

        Ha! Given that I’m currently a stay at home Dad who does volunteer work, I’m not sure where you get this info from. I don’t have exact numbers, but I would estimate in my previous job, the total number of people I offered roles on 457 visas was under 5, out of roughly 100 hires.

        Why don’t you just keep making stuff up though, hopefully it makes you happy.

        Oh.. and thanks for the Twitter link. I thought my likes for that tweet had stopped under 500, but you seem to have tipped it over to 515.

      • I think universities need to refocus their education a little; but I also think there is no substitute for real world experience and the disconnect between what I see new developers think is important in the job and what a senior thinks is important in a job is stark. As a software developer a lot of what you learn in uni is never needed and forgotten – I ask how many senior developers can write an AVL tree without looking it up – it isn’t many – yet they do their jobs quite well. If they required it for the job they definitely could learn it and be productive – maybe not in a pressure cooker hour interview however. In all honesty the only evidence I need to think there’s no “skill shortage” is all the horror interview stories you see posted on blogs and RSS feeds – in a real shortage people are desperate and have to gamble with anyone; they don’t get to limit themselves to the top 10%. Unlike other professions software doesn’t really bring people up and train people up well and so 457 visas are potentially much more damaging.

        The wage structure of an industry is a pyramid often affected by its minimum wage. If I can get cheap average coders for say 40k a year that definitely affects the senior’s wage as well as there’s a limit to how much I’m willing to pay most of them over the average coder. A rational person would try to get into another industry if he/she knew 457’s visas were coming in even if only juniors – after all people have to start somewhere. The sad thing about this it creates a further disincentive for smart people to want to do a STEM career; it’s not a smart thing to go into a field that is oversupplied and competitive after all.

        Anecdotally a lot of people I grew up who ended up tradies have a life on their terms, with no competition and nice paychecks, get to see their kids at 3’oclock and most importantly the ability to just treat it “as a job” not as a passion. Most jobs you can start learning it late at life; as a coder your expected to have the passion for it as a child. A plumber doesn’t need to learn to weld pipes at 8 years old, an accountant doesn’t need to learn tax law as a child but this is the sort of passion and skillset the industry expects from STEM grads these days. It’s the real reason why people in school don’t want to get into these careers anymore; as an example good luck attracting more women to coding knowing how competitive it is especially when they start wanting to have a family and you have to take a break for a few years. I know bio scientists getting paid less or similar to their receptionist as another example.

      • You make some good points @AK, I agree that we treat hiring (and training) programmers differently to a lot of other professions in a lot of cases. It can be tough. There are, of course, some examples otherwise though.

        The reason I’m interested in teaching kids coding isn’t really so they can all go ahead and get jobs as programmers though. I see it as a basic skill that will become more useful in more jobs in the future. I’d love more people in business to be able to build something quick and simple to solve a problem, instead of having no idea how to do anything and having to pay a ‘programmer’ to do it.

        A couple of years exposure at primary school could be just enough not to give them enough understanding to not be scared off by the thought of programming, or even interacting with programmers in a productive way.

        I also hope (and expect) future kids will have opportunities to start their own business or products, where having a good understanding of tech and programming would often be invaluable, even if they get someone else involved to do most of it. Starting a global business is easier now than ever, and will most likely continue to get easier.

        I see so many people who think they have a great idea at the moment and want to start a business, then look for a ‘technical co-founder’ because they openly say they have no clue about tech. This is a bit of an anti pattern for me.

      • Really?! I “pretend” to do it? What an idiotic comment.

        Try not to take it personally. Fallacies, fabrications and random brain farts are pretty much Jacob’s raison d’etre.

    • That’s BS and you know it.

      Because what you and other IT employers look for is someone with solid experience to eliminate or reduce the training required and “milk” them ASAP.

      Plenty of IT Graduates, Australian Citizen graduates who would be “good” and capable in 18-24 months time after OJT and exposure to the company’s structure and systems. But no… companies want “experienced”, “specialists-level” workers on “graduate” salaries and with little to no training. Also, bonus if they are desperate as they will work 50 hours a week to appease the stupid deadlines.

      Problem with this country is that, they want to compete with the world, but want the “result” immediately rather than down the line. Investment on employees must pay off ASAP.

      Back when I was a graduate, I got into 3 Graduate programs, back in early 2000s, Companies actually had Graduate programs, almost all of them did. I got sent around multiple departments on rotating cycles and after 1 year settled down on a department of my field and have been in that field for 12 years now.

      I DO understand the pressure to get results, on limited budgets, also in regards to “looking” competitive globally. But its not right for this country, because prices and cost of living is that of a WELL developed nation but require its workers to be on minimum pay in order for companies to stay feasible locally.

      Sadly, I know too many well educated and qualified people working different fields on way lower salaries than Real Estate agents who has no skills rather than talk BS and manipulate people through their hunger for housing or investments.

      Australia is low key “doomed”, the media doesnt want to emphasize it but we are surrounded by countries that out produce us in low skilled sectors and SOON will outperform us in high skilled sectors…. Australian children would be competing for hospitality jobs to cater for wealthy or “middle income” visitors from the countries around us.

      Its a joke really.

      • IT is a problem industry because so many are recruited for a particular project requiring often highly specific skills. Recruiters’ ignorance as to how much of a skill-set is easily transferable between platforms and languages, or if extensive retraining is required is a big part of the problem. There is often a “skills shortage” and “war for talent” declared at the same time many potential candidates with slight mismatches are unable to get anyone to read their CV. They may be perfectly adequate given a week of on the job training.

  2. Slave labour don’t need STEM skills, well, probably any skills of note. It’s no wonder graduates can’t find jobs as productive industry has been gutted over the last several decades.

  3. I just look at my ex colleagues here who left for jobs in the UK/EU alone when they we’re too old in the early 40’s. What was the real reason??

  4. “we do have a skills problem and we do need to get much better at planning our cities, regions and our infrastructure” stopped reading right there.

    Sick of the better planning lie/distraction. Sick of he skills shortage lie/distraction.

    • If Phelps continues down this path of looking like she is like the rest of them, I predict she wont be back after election. They just dont get it that we have had a gut full of the time wasters in parliaments while the rest of us eke out a living.

  5. ” we do need to get much better at planning our cities, regions and our infrastructure…”

    Bit like learning to fly as you plummet past the 3rd floor at this point.

  6. What Australian industries require STEM skills? Not too many as far as I can see.
    And if you are an engineer, why would you want to work for peanuts here when the cost of living is so high in Australia? How do you buy a house on $100k/year? / $200k/year?
    Next step is a brain drain to Europe and USA as the economy in Australia tanks… sad.

    • Sorry but you can easily buy a house on an individual’s 100K per year. This is where I draw the line on the sand, 100K for mid-level engineers is fine, 120-140K for engineering managers and around 140-200K for Departmental Chiefs.

      To be working as an engineer and earning 100K AUD is absolutely “gold”. I draw the line if people claim 100K AUD is “too little”… I know Factory workers, hospitality workers earning 30K-40K tops a year and those people, have legit reasons to complain about working 50-60 hours and earn barely the minimum.

      If you’re on 100K AUD on a single income and is “struggling”, then time to step back and make a checklist of expenditure… maybe stop living like you earn 150K and you will see 100K is not bad at all.. if not very good. Assuming you work close to 38-42 hours a week rather than 50+ hours, I know Ford employs or employed anyways, experienced engineers on 70K AUD a year and they worked over 50 hours a week and of course comparing their contribution and salary to a local earning 100K working minimum hours would certainly encourage “big bosses” to continue sourcing from overseas.

      Point is… 100K AUD a year, you should be able to buy a house (400K-450K range) and a relatively priced car (Corolla or used sedans)… this is where you sacrifice yearly holidays or going out to eat.

      • If your in Sydney or Melbourne your not getting a house for 450k. Unfortunantly 100k is not that exceptional in those cities these days with the high costs. Many other places on earth that have much more efficiant, innovative and global companies that give you bigger bang for you buck

      • If airline pilots in AUS get paid the same as airline pilots in other nations, that is fair. If IT jobs in AUS pay way less than IT jobs in Norway, that is bad. It results in a brain drain – the smartest Aussie graduates moving to USA and Europe, resulting in an even dumber Australia that exports nothing innovative and an Australia that is even more reliant on LNG exports.

        Yes, the hospitality workers are hard done by and inequality is soaring. How do you think it should be reduced? Raise the minimum wage? Put in a UBI?

      • “100K AUD a year, you should be able to buy a house (400K-450K range) ”
        Can you tell me where these 100k a year jobs are within a less than 3 hour commute from a 450k house please. I’ll be moving there in the very near future :).

  7. I love these statistics that LVO “discovers” So apparently there’s an over supply unemployed home grown of Engineers in Australia.
    Can anyone point me to this limitless supply of Aussie Mechanical or Electrical Engineers especially those with Embedded systems / control systems experience bonus points if they graduated from a G8 school?
    I’ve got a feeling my in box wont be filled with anything but IT graduates that think they can probably do the job. That’s the problem right there. Our top tertiary institutions are turning out lots of IT graduates for jobs that never really existed and very few graduates for the jobs that will really shape our future. In part the problem is that really good Engineers are the result of a training system that is largely Mentor based. You simply can’t produce top quality Engineers in a huge lecture theater teaching 2000 at a time, whereas with IT (while still not the best solution) it is possible, it is profitable and is being done.

    • In part the problem is that really good Engineers are the result of a training system that is largely Mentor based

      You almost get it. Undergraduate courses are there to teach the basic fundamentals, as well as researching techniques so that students can specialise at a later date.

      Now find yourself a smart kid, invest some time mentoring them, and pay them what they are worth. If you don’t then there will come a day when all these heavily indebted and unemployed engineering students will be reassigned to mass produce pitchforks.

      • So I’m the problem: Imagine that and apparently your solution is for me to spend my time, money, effort, educating your kids so that one day they can be somehow useful.
        Hmmm yeah like I said …I’ll get an inbox full of IT graduates I just forgot about Freddy’s rels.
        Yep Like I said there’s a real surplus of these graduates.

      • No, you are not the problem. It was more wishful thinking on my part that people like yourself would realise these resentful kids will one day vote for outright Socialism, and take away everything that we have all worked for.

      • “So I’m the problem’
        In the aggregate, yes. How do you think people get mentored and gain experience? As you pointed out this cannot be taught at educational institutions, but is done on the job. If no one is employing the graduates and training them then the natural result is the shortage of qualified people you are complaining of.
        This can at least partially be laid at the feet of successive governments and their privatisation agendas though. One thing government owned enterprises did well on a large scale was employ young people and train them up in all sorts of fields, with most of them then filtering out ready trained for people like you to employ. This no longer happens though, since as you point out it is a loss making endeavour and the first thing cut upon privatisation.

    • “control systems experience”

      What used to happen is, firms would hire smart students and give them the experience. You regard that as sinful when you can import 45 year olds from the 3rd world – bonus points for agreeing to work for illegal wages.

      • Jacob, we can talk about lots of things that used to happen.
        I’d start with Aussies used to be able to purchase suitable shelter for their families with a loan that was about 3 times one parents wage. Maybe if others were able to see past their right to have 12 times two peoples income for basic shelter than I’d maybe find it in my heart to also ensure some other things were once again as they previously were. …I didn’t start the fire

    • “So I’m the problem’
      In the aggregate, yes. How do you think people get mentored and gain experience? As you pointed out this cannot be taught at educational institutions, but is done on the job. If no one is employing the graduates and training them then the natural result is the shortage of qualified people you are complaining of.
      This can at least partially be laid at the feet of successive governments and their privatisation agendas though. One thing government owned enterprises did well on a large scale was employ young people and train them up in all sorts of fields, with most of them then filtering out ready trained for people like you to employ. This no longer happens though, since as you point out it is a loss making endeavour and the first thing cut upon privatisation.