Australia’s migration system has come under increasing scrutiny as the nation grapples with a shortage of highly skilled workers. Despite record net migration numbers since the Albanese government took office in June 2022, Australia is still struggling to fill high-skill positions, while an oversupply of low-skilled workers threatens to further exacerbate its labour challenges.
Recent data from the Australian Bureau of Statistics (ABS) reveals that over a million people have migrated to Australia in the last two and a half years. However, the country’s reliance on low-skilled workers and the inability to address shortages of qualified talent is placing substantial pressure on the economy.
Low-Skilled Migrants Oversupply the Economy
Despite the high influx of migrants, the Australian economy is oversupplied with low-skilled workers, leaving employers to struggle with finding qualified talent for high-skill positions, according to Macrobusiness.
According to Jobs & Skills Australia and Antipodean Macro’s Justin Fabo, migration has barely eased the shortages of highly skilled workers, with employers still facing difficulties in finding suitable candidates for such roles.
Recent analysis has shown that the majority of international graduates are being employed in low-skilled professions. The Migration Review of 2023 revealed that 51% of international university graduates with bachelor’s degrees were working in unskilled jobs just three years after graduation.
This trend is largely attributed to the increasing number of international students, graduates, and working holidaymakers entering Australia, most of whom fill jobs far below their qualifications.
A similar report from Deloitte Access Economics highlighted that in 2023, 44% of permanent migrants were working in positions beneath their skill level, with a large proportion of them coming from the skilled migration stream.
These migrants are often employed in industries with lower productivity, contributing to Australia’s ongoing challenges in labour productivity and wages.
Skilled Migration System Needs a Reformation
The current structure of Australia’s skilled migration system has proven ineffective in addressing the country’s labour market needs. Migration policy has led to the underemployment of skilled migrants, with many working in areas unrelated to their expertise.
This misalignment has significant economic consequences, including hindering the country’s overall productivity growth.
Experts have suggested that Australia’s migration system should focus on attracting highly skilled and well-compensated workers to meet the nation’s needs.
Proposed changes include raising the wage floor for skilled visas above the median salary and ensuring that all skilled visas are employer-sponsored. Such reforms would allow qualified migrants to begin working in their specific fields immediately, addressing skill shortages more effectively.
The government’s current approach to migration is also criticized for its impact on Australia’s infrastructure and housing. The growing strain on these sectors, coupled with environmental concerns, highlights the urgent need for a more targeted and skill-focused migration system.
