Decades of mass immigration haven’t stopped skills shortages

ABC’s business editor, Ian Verrender, has recently done a superb job debunking the business lobby and Coalition’s incessant claim that Australia is experiencing chronic skills shortages, thereby necessitating the large-scale importation of foreign workers (see here).

Today Verrender has repeated the dose, questioning why purported skills shortages have persisted across the economy despite decades of mass immigration:

A quick flick through the Skilled Occupation List for workers from abroad shows everything from carpenters to chief executives, chefs and composers, clothing trade workers. And that’s just the Cs.

The list seems to go on forever.

And even if your chosen occupation is removed, never fear.

“Pending nomination and/or visa applications will not be adversely impacted by the subsequent removal of any occupation from the skilled occupation list,” the Home Affairs department website says…

At the same time as we’ve been tough on refugees, Australia has thrown open the doors, with one of the largest per capita immigration programs in the developed world.

It has enticed around 4,000 new arrivals a week, mostly into the two biggest cities, Sydney and Melbourne.

But even now, after decades of mass immigration, it appears we still are suffering critical “skills shortages”.

Fruit pickers, waiters and baristas are in short supply. Almost daily, there are calls to throw caution to the wind when it comes to COVID-19 and start importing workers again.

Low wages growth is hurting our economy

It has taken quite a while. But Reserve Bank governor Phil Lowe set himself on a collision course last week with big business and sections of the federal government by stating the bleeding obvious.

And that is, Australia has used immigration as a means for keeping the cost of labour subdued… It’s pretty basic economics, really…

In the past 12 months, there’s been almost universal agreement that stagnating wages pose one of the greatest dangers to derailing our recovery, particularly given our eye-watering levels of household debt.

But whenever wages start to rise, the calls to bring in more workers start immediately.

Interestingly, those making the most noise now are the ones who have benefitted the most from a constant influx of tourists, students and temporary workers.

The flood of overseas workers, particularly in hospitality, has left many with barely enough work upon which to survive. And it has opened the door to exploitation and wages theft on a grand scale…

Somewhere along the way.. canny politicians figured out the great immigration con job: that by adding ever greater numbers of people, you automatically get GDP growth.

That’s because GDP is a crude yardstick. It simply measures the amount of stuff you produce. The more people you’ve got, the more you consume, and the more you produce…

Big business loves it too.

Not only does the influx of workers keep wages low, but all those extra people also end up consumers of your products. You sell more, your profits rise and so do your bonuses.

What GDP doesn’t measure is whether or not we all are better off as individuals…

And the problem is that many of the new arrivals end up working part-time, in lower-paid jobs and in occupations that require far fewer skills than they possess. Doctors and engineers end up as Uber drivers.

Foreign workers are greatest victims of wage theft…

But for months now, almost every day brings forth a new claim of “skills shortages” and the need to start importing workers because firms have to pay more.

MB has provided similar analysis over many years.

No matter how the Australian economy has tracked, or how many migrants have arrived, the business and property lobbies have always cried ‘shortage’ and demanded more cheap foreign workers. And their cries have been supported by Australia’s corrupted economics profession and media.

It’s time our politicians stopped listening to these parasites and instead allowed the labour ‘market’ to distribute workers to areas of highest return (as measured by wages).

Unconventional Economist
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  1. I find this a case of the boy who cried wolf.
    After years of complaining of a shortage that never existed they finally do have their shortage and no one believes them.
    My personal experience and the experience of other I have spoken to is that any workers are hard to find let alone experienced, good employees that are the right fit for the job. It doesn’t matter if it blue collar or white collar, there is a real tight labour market.

    2 obvious reasons for this;
    1) No international flow of labour due to lockdowns
    2) Movement of people from the urban cities to suburbs and rural areas outside cities.

    • WorkingFromHomeMEMBER

      Interesting. The only skills to be found are foreign skills trained in a foreign land. Seems to be a training problem, doesn’t it? The lack of incentive to to train locals yeterday is a problem today. No worries, we simply must open the boarder to increase the tax base and lazilly meet Davos growth targets. #BestEconmonicManagementEva

      • Fishing72MEMBER

        Decades of concerted effort to create a skills shortage through destruction of incentives for business, destruction of tertiary learning and trade schools, funnelling of youth towards useless university degree churn instead of technical skill attainment. Disguise the socially engineered skill set paucity with free pour mass immigration despite the mass immigration presenting destructive properties of its own. Then when the mass immigration tap gets turned off suddenly, claim that the above scenario which has taken years to establish and maintain is irreversible because it can’t be solved within a single working week.

        The ship may take some effort to turn but the turning sure beats continuing the headlong course towards the iceberg.

      • Its a massive problem. Even if your educated here, its hard to find a company willing to take on recent graduates. Many will move to the US or Europe to cut their teeth and then return with the experience to get a job. That lack of movement, not just in foreign workers hoping to migrate here but also the inability of recent graduate to go overseas and gain experience is shutting down the flow labour

        • WorkingFromHomeMEMBER

          Agreed, the labour problem is a wage problem and I hold little hope that the current two party system is interested in changing that.

          Graduates need mentoring and experience to realise their worth. The hunger games of graduate placement includes competing with the skilled migrant $54k wage base. A ~20% premium on the minimum wage may cause many to simply give up and acceept their degree as a total loss. The only “safe” jobs are the tickets that can’t be purchased offshore.

          Businesses get what they pay for. Employers shamelessly asking job applicants to state their current wage and how much they would like to be paid is simply cruel. Employees should be paid what they are worth to the company. Knowledge management is corporate speak for no/low skilled operators with the correct certifications and little internal innovation.

  2. NelsonMuntzMEMBER

    The Russians had a saying “Hard work is for tractors and slaves.”

    In Australia it’s “Open teh gates and lower teh rates.” As hard work has been replaced by property speculation and the need to constantly back fill the population Ponzi.

    • Lord DudleyMEMBER

      This! High immigration pushed up housing prices while pushing down wages, thus permitting businesses to function that would otherwise fail because of Australia’s high cost base.

      Low immigration and higher wages cannot be sustained without smashing Australia’s insane housing market. Watch out for failing businesses because of rising costs.

  3. Isn’t it obvious? The politicians are the parasites. The only way out is for people to stop putting the major parties high on their preferences. When their primary votes get below 30% we might start to see some change.

    • i’m hoping to soon see major parties down to 10%, with independents making up loose coalitions to form govt that govern in national interest, not party lines. A bit chaotic, but i think a better outcome.

      Also, possibly a 50% representation from a national lottery every 2 years, randomly selected from TFN’s, so theres no political interference, pork barrels, campaigning. You’re up, you have a go, you get paid well for 2 years, then go back to your old life. Maybe a small pension sweetener for those earn under the avg wage or income.

  4. When we had a immi engineer at work, grab a hacksaw and start cutting away at a 415v cable without checking for dead, we knew they weren’t the answer ……. or remotely skilled.
    Thank dog we are down to our last one. Its like running a bloody daycare ! you cant take your eyes of them.

  5. Incredibly Gladys has just said she will again consider bringing in international students once the lockdown ends. Let’s hope Morrison has more sense and rules it out, but probably not.