Report: Australia’s Migrant Job Mismatch Cost $1.25B
An eye-popping report has revealed that Australia is facing a skilled migrant job mismatch, costing the economy a whopping AUD$1.25 billion.
The report by the Committee for Economic Development of Australia (CEDA) has found that nearly a quarter of permanent skilled migrants in Australia are working in a job beneath their skill level.
Using exclusive analysis obtained from the Department of Home Affairs, CEDA in its report titled ‘A good match: Optimising Australia’s permanent skilled migration said its findings showed that skills mismatch cost the nation billions in foregone wages from 2013 and 2018.
CEDA Chief Executive Melinda Cilento says Australia’s skilled migration system has served the country well, but there were areas where it can be improved.
“As we emerge from COVID-19 we need a skilled migration system that is nimble and responsive to the needs of the economy.
“In addition to many migrants working beneath their skill level, the system is slow to respond to rapidly emerging skills needed, such as digital and data.
“This is where we can least afford to lag in the competition for talent. A system that does not enable access to critical skills in a timely fashion means we will be unable to keep up with the global competition,” Cilento said in a statement.
The report stated good skills match occurs when a person has a job that uses their skills and qualifications.
Skills mismatch occurs when a person works in a job beneath their skill level.
For example, a postgraduate physics degree holder working as a barista or an engineer working as an Uber driver.
As Australia emerges from the COVID-19 pandemic it must use relative economic strength and take advantage of the rapid gains made in digitisation over the past year.
Accessing the right skills at the right time, and getting the right people into the right jobs, are critical to enabling future investment and job opportunities, and to Australia’s economic dynamism more broadly.
The Federal Government has recognised this and made some changes, such as Global Talent visas.
But these are band-aid measures and continue Australia’s revolving-door approach to migration policy that CEDA has previously criticised.
Cilento said structural and sustainable change as well as the development of a system that can evolve as skills need change are required.
“We are already hearing consistent concerns from our members about skills shortages while international borders remain closed, and the inability to access the skills needed to drive growth and investment, including digital and data opportunities.
“The changes CEDA is recommending would help ensure permanent skilled migration is satisfying the current skills needs of the Australian economy.
“This will help make the system work better for both employers and skilled migrants, with flow-on benefits for the broader Australian community,” Ms Cilento said.
She added that over time these changes will do more than just reduce the level of skills mismatch among permanent skilled migrants.
The entire migration system will be more efficient and effective, generating better and more up-to-date matches between migrants and the skills Australia needs to power its economic recovery, she said.
The four recommendations are:
1. Establishing a new government-regulated online skills-matching jobs platform. This would allow permanent skilled migrants to register their skills, and let accredited employers hire migrants from within the platform. It would initially apply to a small proportion of the permanent skilled migrant intake before potentially being applied more broadly across the system.
2. The Australian Bureau of Statistics (ABS) should comprehensively update the Australian and New Zealand Standard Classification of Occupations (ANZSCO) codes to ensure that migrants with vital and cutting-edge skills can migrate to Australia and contribute to the maturing of our labour market. These codes have not been updated since 2013.
3. To retain community confidence, the Federal Government should be more transparent about the data and methods used to assess whether occupations are deemed to be in-demand and included on skilled occupation lists. Two options to achieve this include: – Periodically releasing the analysis that underpins the Department of Employment’s traffic light bulletin report for skilled occupation lists. – Establishing an independent committee similar to the UK’s Migration Advisory Committee to undertake analysis, consultation and advice on the formulation of skilled occupation lists.
4. Reducing the Newly Arrived Resident’s Waiting Period for unemployment benefits from four years back to six months, to give permanent skilled migrants a better chance to find the right job. Research suggests that increases to this waiting period since the late 1990s have exacerbated skills mismatch while delivering only modest annual savings to the federal budget.