Australia awash with low-skilled workers


Justin Fabo from Antipodean Macro published the below chart showing that labour shortages are rapidly easing across Australia:

Australian recruitment difficulty

Low-skilled positions, in particular, have become much easier to find, with the share of employers reporting recruitment difficulties falling to pre-pandemic levels.

The data makes sense in light of the record surge in international students, with the latest Department of Home Affairs data showing that there were a record 713,000 student visa holders in Australia in February 2024:

Student visa holders in Australia

International students tend to work in low-skilled occupations like hospitality while studying.

Moreover, the Migration Review showed that more than half (51%) of international student graduates with bachelor’s degrees work in low-skilled jobs like delivery workers, cleaners, baristas, and waiters:

International graduates by occupation

Thus, the massive rise in student and graduate visas has driven an oversupply of low-skilled workers.

More broadly, SEEK data shows that the number of applicants per job ad has surged around 60% above pre-pandemic levels, suggesting that labour supply is outstripping demand:

Seek job applicants data

Given the latest surge in net overseas migration reported by the Australian Bureau of Statistics (ABS), labour supply should continue to grow at a robust pace:

Labour supply growth

Source: Alex Joiner


As a result, it is only a matter of time before unemployment jumps, especially among younger cohorts competing against the deluge of international students.

About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.