Transcript Document

Can Australia win in the global battle
for skilled workers?
Peter McDonald
Director
Australian Demographic and Social Research Institute
Reference
Peter McDonald and Glenn Withers
Population and Australia’s Future Labour Force
www.assa.edu.au
Predictable futures for Australia
1. Major investment in new physical infrastructure.
2. The continuation of the mining boom.
3. Substantial new investment in education and
training.
4. Substantial new investment in health and welfare.
5. The growth of the aged population.
6. Doubling of standards of living by 2040.
7. Radical changes in the way we live our lives.
Future labour demand (1)
 1. New infrastructure for water, transport, ports,
energy supply, housing and office space, and stateof-the-art communications will be demanding of
engineers and construction workers.
 2. Mining expansion will require managers and
mining engineers through to truck drivers, port and
railway workers.
 3. Most new workers will be supplied from domestic
sources but they will need to have leading-edge
training. More teachers and educators required.
Future labour demand (2)
 4. The demand for health workers is strong and will
continue to be so.
 5. The growth of the aged population will generate
increased demand in all types of service industries
and in the health sector.
 6. Rising living standards will create new demand
for labour, especially in consumption and service
industries.
 7. And new ways of living our lives will create jobs
that do not exist today.
Future labour demand (3)
 Much of the future labour demand will be met by
migration and Australia’s population will grow at a
much faster rate than the ABS has previously
projected.
 Massive planning implications – but not the subject
of today’s address.
 Population growth has a multiplier effect upon the
demand for labour. The additional population must
be fed, clothed, housed and generally entertained.
Labour supply
 Australia’s labour force grew at close to two per
cent per annum between 1980 and 2000.
 This was due to full entry to the labour force of the
baby boom generation, increased participation of
women and overseas migration. The first two of
these sources of growth will largely disappear from
now on.
 The labour force is growing today at about 1.2% per
annum and falling. Current growth would be close
to zero without migration (next slide).
Labour Force Annual Growth Rate Projection
Australia
1.2
Annual Net Migration = 160,000
Rate (%)
0.7
0.2
-0.3
2006
2021
2036
2051
Annual Net Migration = 0
-0.8
Year
Note: Assumes fertility constant at 1.8 births per woman and labour force participation
constant at July 2007 levels
Table 1: Population and annual net migration if
labour force growth is assumed to be constant
at 1% per annum, Australia, 2006-2051.
Year
Population (millions)
Annual net migration
(thousands)
2006
20.6
160
2021
25.3
227
2031
28.9
227
2041
32.3
266
2051
36.2
316
Note: Assumes fertility constant at 1.8 births per woman and labour force participation
constant at July 2007 levels
Response by Government
(all in the past week!)
 An additional 31,000 skilled migrants in the 2008-09
Migration Program.
 Temporary skilled migration expected to exceed
100,000 in 2008-09.
 Foreign students gain automatic work rights in
Australia.
 Cabinet is expected to approve a pilot program for a
guest worker scheme from the South Pacific.
 A longer term reform package will be considered as
part of the 2009-10 Budget.
And work gangs: large projects
 The Government will also promote and encourage the
wider use of Labour Agreements for larger projects that
are in the national interest and have significant
economic benefit for Australia (Minister for Immigration
and Citizenship, press release, 5 May).
Other views
 ‘Federal Opposition Leader Brendan Nelson says
the Government's plan to plug the labor shortage
with an increase in migration will put Australian's
out of work’ (ABC On-line News 18 May 2008).
 UNIONS believe the Rudd Government is using a
huge increase in skilled migration over the next 12
months to dampen wage pressures across the
economy as they pursue catch-up pay claims to
offset rising inflation (The Australian, 16 May).
Global competition for labour
 In the next 50 years, because of past and future low
birth rates, skilled labour will be the quintessential
scarce resource.
 This is not to say that the world as a whole should
be aiming to increase its population. But it does
mean there will be redistribution of population
across the globe on a numerical scale greater than
we have ever seen.
UN projections of labour market
entry ages (15-24 years)
Region
Africa
Asia
Europe
Latin America
USA/Canada
Oceania
WORLD
Change in population aged
15-24 years
2005 to 2025 2025 to 2050
(millions)
(millions)
88.5
-11.1
-25.0
4.0
3.4
0.7
60.5
75.9
-54.3
-10.0
-11.2
2.3
0.4
3.1
15-25 year
olds in 2050
as a percent
of 15-24 year
olds in 2005
187
91
66
93
112
122
105
Labour market entry ages, 2005-2025
Region
Change in
population
aged 15-24,
2005-2025
Region
(millions)
Change in
population
aged 15-24,
2005-2025
(millions)
East Asia
-55.5
East Europe
-19.9
South/Central
Asia
36.0
North Europe
-0.8
Southeast
Asia
0.7
South Europe
-2.0
West Asia
7.7
West Europe
-2.3
Net Annual Migration, Years to 2050
UN Projections
Region
Africa
Net annual migration assumed
for UN projections
-400,000
Asia
-1,200,000
Europe
+850,000
Latin America & Caribbean
-750,000
USA & Canada
Australia
+1,300,000
+100,000
Strategies
1. Expos in targetted cities overseas.
2. Expos in Australian cities to encourage employers
to participate.
3. Application on shore from 457 and student
temporary migrants.
4. Working Holiday Makers.
5. Regional migration schemes. Competition
between States and between towns and cities.
6. Pacific Compact.
7. Facilitate labour agreements for large projects.
Comparative advantages?
 Linking workers and employers. Nothing beats a
guaranteed job upon arrival.
 High Australian dollar.
 High minimum wage.
 English as the language of business.
 Universal health system and good quality
education. Equality of opportunity for children.
 Lifestyle. Cosmopolitan image.
Comparative disadvantages?
 Slow access to citizenship.
 Immigration of parents more difficult than in USA
and Canada.
 Housing costs and housing shortage.
 Impressions of racism, social disharmony.
 Inadequate settlement supports.
 High taxation.
 Distance.