One of the stranger sights during the election campaign was both sides promising to create lots of new jobs even as businesses across a range of industries complained they couldn’t find enough workers.
Scott Morrison and Josh Frydenberg — remember them? — promised 1.3 million jobs over five years. Anthony Albanese and Labor were particularly focused on manufacturing and promised a $1 billion manufacturing plan that would restore job losses in manufacturing over the last decade (the Coalition had its own $1.5 billion “Modern Manufacturing Strategy” in government, too). Labor spokesman Richard Marles said during the campaign “there are hundreds of thousands of skilled and well-paid jobs up for grabs — but if manufacturing all goes overseas, we will miss out”.
The obsession among politicians, and especially Labor, with manufacturing — with the only brief exception being Tony Abbott and Joe Hockey — rivals that for small business. But despite constant promises and new strategies, since Labor came to power in 2007 the manufacturing workforce has fallen from more than 1 million workers to 850,000 earlier this year — or from 10% of the workforce to 6.4%. About half of the fall happened under Rudd-Gillard. Notice Labor didn’t promise to reverse those job losses.
Promising hundreds, thousands, millions more jobs was fine until we reached a level of unemployment not seen since Gough Whitlam. After that, promising more jobs becomes a game of beggar-thy-neighbour between industries. The only way to fill those jobs is to bring in foreign workers. We’ve done brilliantly well on participation in recent years — a great Coalition economic achievement — but there are hard limits to higher participation in an ageing population.
So, if Labor wants to recoup 85,000 manufacturing jobs it claims were lost under the Coalition, where will they come from? There are few spare workers around. And the economy has changed significantly since 2013, let alone 2007. The story of the Australian labour force over the last decade has been the rise of health and social care.
For the first time, in the February quarter, the health and social care workforce passed 2 million workers, or 15% of the entire workforce. No other sector has come close to reaching that figure since modern industry workforce figures began in 1984. Hospitals and healthcare staff alone number more than 1.1 million.
And while health and caring services are heavily feminised — thus accounting for the big rise in female participation — they also employ a lot of men. In 2007, about 4% of the male workforce was in health and social care; now it’s 6.7%. Political rhetoric about “lost” jobs in manufacturing never addresses the “found” jobs in other sectors.
That’s all part of the rise and rise of service jobs in the economy. In the February quarter, professional services jobs also hit a record — 1.28 million, or 9.4% of the workforce. Professional services is slightly tilted towards men — they form 55% of that workforce — but as a sector is far more feminised than manufacturing, construction, mining or other traditionally blue-collar male jobs.
So where will we get tens of thousands of manufacturing jobs, other than straight from overseas?
The relentless rise of health and social care — which will be further expanded as an ageing population places more pressure on health services and we improve the quality of aged care to a civilised standard — can only mean it will continue to suck in workers from other sectors, especially workers from private sector industries lured by higher salaries and stronger union representation in the public sector.
But that has its own problems. The NSW government has committed to a $4.5 billion increase in health funding to lure 10,000 workers into the struggling NSW health system (on top of this morning’s announcement of a pay rise and $3000 one-off payment to health workers). Expect other states and territories to face similar pressures. This kind of demand can only place more strain on other health systems and lead to similar efforts elsewhere — with no obvious source for additional workers other than from overseas.
Unless our workforce strategy is simply to import as many workers as we need without limit, we have to decide what kind of economy we want. Do we want to go back to 2013, when there were 915,000 manufacturing jobs? Do we reverse the historical rise of service industries in the name of being an Australia that makes things? And what do we tell voters when they demand better health and aged care services and wonder why they can’t find affordable childcare?
Or do we check back in six years and discover that manufacturing has fallen further, and the opposition promises to reverse that decline with a new manufacturing strategy?
I have one question.
If we are going to bring in up to 200,000 workers from overseas, were
will they live as we already have 400,000 to 500,000
homeless in Australia now?
You don’t ask questions like that in politics.
Yes we have a huge housing shortage and the building industry struggling with supply issues, so where WILL they live?
They’ll be competing in our housing and unregulated rental markets just like before, and that’s just how libs, labs and wealthy investors like it. The govt is actively trying to lure several hundred thousands students back, yet nary a word about where they’ll live.
You do realise that that is per year?
There is no lack of workers. 4% unemployment compares with an *average* of 1.3% in the postwar decades. Remember when Bob Menzies nearly lost because unemployment was over 2%? No, I thought not.
If there is a lack of skills that is the result of decades of neoliberal destruction of our entire education system (both sides take a bow). Clever.
The incessant cry of ‘skills shortage’ is nothing more than a cry for cheap labour, and it has worked well. We could and should manage for full employment, we could and should educate our young people, and we could and should raise wages. That will stimulate the economy, because people will have money to spend.
The comparison with the Menzies era is a false one. There were hardly any married women in the workforce at that time. For example, female public servants and teachers had to resign when they married. Hence, if you applied today’s rate of workforce participation to Menzies time, the unemployment rate would have been as high, if not higher, than now.
Not sure that married women teachers had to resign. I recall that I could no longer be part of the superannuation scheme but I could remain as an employee with the Victorian Education Dept.
You are right about teachers – at least for Victoria.
That may well be true from a statistician’s perspective, but irrelevant to Geoff’s point – it is much harder for today’s unemployed and underemployed to find work than during the postwar decades, precisely because the (female) participation rate was low. And, of course, ‘underemployment’ was not even a word back then.
It was less an issue of female participation than it was the structure of industry and the relatively large number of positions for unskilled and semi-skilled labourers, factory hands and storemen. Anyone who was physically and mentally/psychologically able and genuinely wanted a job could find one in the 1960s. Protection, industry assistance and government contracts helped to provide these positions, especially in provincial centres. Incidentally, there were, of course, as many female as male school leavers at the time and they both – on average – found work with the same ease.
The ‘skills shortage’ of course has nothing whatsoever to do with failing to train the net group of tradies – why bother when there was a flood of immigrants willing to work for less.
Not only do they work for less, they (innocently and unknowingly) provide a lower floor for Australian workers’ wages.
they don’t necessarily work for less they work for cash.- which creates more disposable income.
skill shortage seems to equate to increase in university graduates – the university industry does not turn out skilled people.
Defunding of TAFE.
The VET sector has to be cleaned out and completely reformed. And I mean reform, not the regress successive federal and state governments have foisted upon us for the last 30 years.
Competency-based assessment is a disaster. Its very language tells the kids they don’t ever have to meet a deadline or a specification.
Training packages are a disaster, largely written by people who have never done the jobs or worked in the industries they purport to represent, and full of bureaucratic and procedural crap that no one in those jobs ever does.
Removing quotas on training places has been a disaster. State governments are spending more on training than ever while students are saddled with enormous debts after receiving training in their hobbies for jobs that don’t exist. That’s not true for many trades, as the discussion here about the lack of skilled workers shows, but it’s why there used to be quotas… partly as a way of signalling the state of the job market. We used to joke that we’d take them if they could walk. Now we (don’t) joke that we’ll take them if they are breathing.
Contestability–allowing private providers in–has been a disaster. Even if the grifters have now been removed the regulatory burden imposed on everyone else is enormous.
I could go on, but I’m depressed enough already.
I remember it well. I took over a middle management position in the 1990s when the Certificate 4 syllabus was being introduced. I asked to see the competency assessment criteria and arrangements and was dismayed to find there was no way to fail an incompetent trainee. Once they entered the course they were guaranteed to come out the other end with a qualification.
Wrong. The university system does turn out skilled people whether they are in the vocational professions like engineering, architecture, medicine, law, teaching, nursing or the generic studies like science, economics, arts. It is not the job of universities per se to churn out raw, fit for purpose, ready-made employees of whatever. The role of universities is to produce higher thinking, original thinking and research, critical analysis, an elevated edifice of culture and literature and learning. It is the economy which does not fit in with universities and it is not the fault of the economy necessarily nor the universities that they cannot match so-called skills with qualifications. Most of my education at Bachelor and Masters level is way higher than anything I have done at my work. I did have a TAFE degree but in the 80s and 90s, the economy didn’t want me despite Labor and Liberal politicians and business people saying we needed more trades people. Hogwash!! I tell them and others my story and they say, “Oh well! Not your trade. That’s dying out.”
To be a successful tradesperson one has to start at 15 or 16. Half of all apprentices don’t make it through their course, their apprenticeship. Why encourage and focus solely on trades and vocations when only half of all who take it up finish their trade or study?
If there is skill shortages, then that is the fault of the businesses for not training apprentices properly or looking after them rather than treating them like rubbish or not offering them clear career paths. Who wouldn’t take the easy option of office work or government service? Sure, at uni, you sacrifice 3 to 5 years of loss of salary but you gain security of employment and in some cases higher salaries and better working conditions in the long run. Apprentice pay is subsistence and most live at home. Skills were always in short supply for this reason going back decades as you, as a 16, 18 or 21 year old, could make more money working on the wharves, in an abattoir, a factory on shift, in the transport or aviation industry. I knew an old bloke once, a French Polisher by trade who lived in Sydney’s southern suburbs, owned his own home and he did well for himself but he didn’t do it or succeed through his trade. He did it by working on the wharves for 20+ years and did his trade part time. Even when you finish a trade the pay is not great for some of them.
Skills shortages are as a result of industry activity, policy or conditions, not because of more people doing uni degrees. Governments won’t fund TAFE properly. Companies won’t invest in training or look after apprentices properly and it seems the problems there are systematic. I don’t really think that many Crikey readers have experienced industry or insecure manual employment. Some have but how many know the truth about apprentice schemes. In Bathurst their was the Central West Group Apprenticeships Scheme and their job of providing apprentices to industry like the automotive industry, the electrical industry, the furnishing trades, the office fitout/joinery and kitchen industry, the building industry, etc was secondary. It’s real role was to use apprentices as a cover to provide employers with cheap labour. And in these turbulent, insecure economic times, Quite a few companies went broke and therefore those unlucky apprentices didn’t manage to finish their apprenticeships even if they wanted to. Some were lucky and transferred to eligible employers but it is a risk. Doing a TAFE course now costs money just like university degrees. I don’t why young people are not more damned angry!
The elephant in the room with all thes discussions is the level of employment participation. It is all very well saying unemployment levels are low but what if a substantive number of the population want to work more hours. ie underemployment? Is there a labour shortage of a mismatch between demand and availability?
Being harsh, I would suggest the area of labour shortages is in areas where I would not like to work nor would I find the pay rates acceptable.
Why didn’t we train our refugees in detention to become skilled in an areas where there are shortages? Because of stupid arrogant incompetence by politicians.
The other elephant of course is vocational education which has been gutted and privitised to produce the Americanized half tradies et al. In my day we trained monkeys, educated students and vocational education were people.
We have a long way to claw back.
There is no shortage of workers. Years of crappygovernment has seen the definition of unemployment changed so that anyone working as little as one hour a week is classied as employed. But there are millions of underemployed who would love to work more. I only work 13 hours per week and would like do do more. I am not on anh unemployment list. Mind you Im a pensioner and most employers write me off the instant they see my age. Another issue is if I earn anything the Centrelink gestapo hacks my pension to bits, effectively forcing me to pay 50% tax on my earnings. Plenty of workers around. Not much sensible employment policy.
“Scott Morrison and Josh Frydenberg — remember them?”
I’m very, very pleased to respond “barely”.