Recent data from Jobs and Skills Australia (JSA) has revealed that Australia’s labour market is no longer grappling with the same skills shortages that dominated national discussions in the aftermath of the pandemic.
With a notable increase in the number of job applicants per vacancy, some experts argue that concerns around recruitment difficulties are increasingly exaggerated. However, the government’s approach to immigration, particularly its emphasis on low-skilled workers, has raised questions about the long-term impacts on Australia’s economy and productivity.
The shift in the labour market comes as the Albanese government has moved to boost migration numbers, including a significant rise in international student intake. While this influx of workers appears to have stabilised the job market, the mismatch between the skills in demand and the skills of new arrivals is beginning to show. Critics argue that this strategy could ultimately undermine productivity and exacerbate the very issues it aims to resolve.
Recruitment Difficulty Eases, But Worker Skill Gaps Persist
According to JSA’s most recent recruitment data, the number of job applications per vacancy has surged to 29.3, with 9.4 qualified applicants and 4 suitable applicants per vacancy. This represents a dramatic decline in recruitment difficulties, which have now returned to pre-pandemic levels. Employers are filling roles faster, and vacancies are being closed with increasing speed.
However, while the job market is more competitive, the labour force remains unevenly distributed. Australia is now well-supplied with lower-skilled workers, thanks in large part to the rise in low-skilled immigration. But the country is still facing challenges in sourcing higher-skilled workers, particularly in critical sectors such as engineering and healthcare. This imbalance raises concerns about the sustainability of productivity growth, as underemployment among skilled migrants persists.
Migration Policy’s Role in Australia’s Labour Market
Australia’s immigration system has become a focal point in the debate over the country’s labour market dynamics. The Albanese government’s recent move to increase the international student intake by 25,000, alongside a loosening of English language requirements for visas, is intended to address labour shortages. However, critics argue that the nation’s migration policy is not aligned with its economic needs.
According to the Committee for Economic Development of Australia (CEDA), skilled migrants often find themselves in jobs below their qualifications, with many working in lower-productivity roles. This underemployment has consequences for Australia’s overall productivity, with skilled migrants often working in sectors that fail to capitalise on their expertise. In 2023, Engineers Australia estimated that around 100,000 qualified engineers were employed in roles unrelated to their profession, such as driving for rideshare services.
The mismatch between migrant skills and available jobs is not a new issue. The 2023 Migration Review found that over 50% of foreign-born university graduates were working in unskilled positions just three years after graduating, illustrating the extent of underutilisation in the workforce.
While the easing of visa requirements may ease immediate labour shortages, the longer-term challenge will lie in aligning immigration with Australia’s productivity and economic needs. As more low-skilled workers arrive, concerns grow about the potential drag on both economic growth and quality of life for many Australians.
