Australia’s Labour Market and its Challenges

Ivan NevilleLabour Supply and Skills Branch

Department of Education, Employment and Workplace Relations20 March 2009

Labour Market Conditions

• Labour market conditions remain relatively strong:

- Unemployment rate: 5.2%

- Employment rate: 72.9%

- Participation rate: 65.5%- Educational Attainment

—Year 12 or higher: 67.3% (compared with 65.9% in May 1998)

Source: ABS Labour Force Survey 12 month average January

2009, Education and Work Survey May 2008 CAT. No. 6227

Groups at High Risk of Unemployment

• Teenage Full-Time Unemployment Rate: 23.9%

- Teenage full-time unemployment to population ratio: 4.8%

• Indigenous Unemployment Rate: 14.0%- Indigenous Employment Rate: 50.3%- Australian Employment Rate: 72.4%

• Some regions have high unemployment: - Regional Unemployment Rate for QLD: 1.4%-8.5%

Source: ABS Labour Force Survey

Unemployment Rate by Selected Education Qualifications

Source: ABS Education and Work Survey May 2008 CAT. No. 6227

0% 1% 2% 3% 4% 5% 6% 7% 8% 9%

Year 10 or below

Year 12

Certificate III/IV

Bachelor Degree

Weekly Earnings by Selected Education Qualifications

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Year 10 or below

Year 12

Certificate III/IV

Bachelor Degree

$2000 or more

$1000-$1999

$1-$999

Source: ABS Census of Population and Housing 2006 CAT No. 2914 (not include negative income, nil income, not stated and not applicable)

Job Growth by Industry 5 years to November 2008 (‘000s)

Source: ABS Labour Force Survey (DEEWR trend data).

-8.0

9.6

11.8

12.2

23.2

33.2

41.4

45.7

47.9

54.0

74.8

85.3

99.0

100.1

165.1

191.0

230.1

-20 30 80 130 180 230 280

Agriculture, Forestry and Fishing

Manufacturing

Communication Services

Wholesale Trade

Electricity, Gas and Water Supply

Personal and Other Services

Government Administration and Defence

Cultural and Recreational Services

Finance and Insurance

Accommodation, Cafes and Restaurants

Mining

Transport and Storage

Education

Retail Trade

Property and Business Services

Health and Community Services

Construction

Job Growth for Skilled & Low Skilled Labour

Source: ABS Labour Force Survey (DEEWR trend data).

Managers

Professionals

Tradepersons

Elementary workers

Labourers

90

100

110

120

130

140

150

Nov-98 Nov-99 Nov-00 Nov-01 Nov-02 Nov-03 Nov-04 Nov-05 Nov-06 Nov-07 Nov-08

Labour Market Challenges

• Ongoing structural challenges:– Skills shortages– Ageing workforce– Slower growth in labour supply

• Global Financial Crisis (GFC)

Professions/Trades in Shortage

Health Professions• Registered (Nurse, Midwife

and Mental Health Nurse)• Dentist and Dental Specialist• Pharmacist (Hospital and

Retail)• Occupational Therapist• Optometrist• Physiotherapist• Speech Pathologist• Podiatrist• Medical Diagnostic

Radiographer• Sonographer

Automotive Trade Persons• Motor Mechanic• Automotive Electrician• Panel Beater• Vehicle Painter

Electrical Trade Persons• Refrigeration Mechanic • Electronic Equipment Tradesperson

Source: DEEWR – SERA Survey

Recruitment Success by Skill of Occupation

Source: DEEWR – Survey of Employers’ Recruitment Experiences.

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0%

Total

Lower Skilled Occupations

Medium Skilled Occupations

Higher Skilled Occupations

Proportion of reported vacancies

Vacancies unfilled Vacancies filled with jobseekers who required development

Reasons Vacancies Difficult to Fill(Selected Reason)

Source: DEEWR – Survey of Employers’ Recruitment Experiences

Impact of Global Financial Crisis

• Forecast slowing in economic growth– GDP growth in Australia is predicted to slow to 1% in

the 2008-09 financial year and 0.75% in 2009-10

• Employment is expected to contract in 2009 and remain weak in 2010 – As a result, the unemployment rate is expected to rise

to 5.5% by June 2009 and 7% by June 2010

Latest forecasts from the Treasury (February 2009)

The Global Financial Crisis

Some industries, regions and individuals will be disproportionately affected:

• Finance and Insurance and Property and Business Services industries most affected:

- Construction and Retail Trade also adversely affected

• In the 1990s recession, the greatest increase in unemployment occurred in regions which were most disadvantaged.

• People with the least skills and experience are most vulnerable: - Young people, people with low qualifications, recent migrants and people in casual employment

Ageing Workforce• The Australian workforce is getting older:

– Almost 2 out of every 5 workers are aged 45 years or over

– Almost half of the workforce in Agriculture, Forestry and Fishing; Education; and Health and Community Services are aged 45 years or over

– The median age of the workforce in 2006 was 39 years

• Impact of an ageing population include:– Greater job and career opportunities for people of

all ages– Mature age workers increasingly being valued by

employers

Source: 2006 Census of Population and Housing, DEEWR, Workforce Tomorrow

Ageing Population 1971 to 2051

Source: ABS Population Estimates and Projections

Projected Labour Force2000 to 2050

8

9

10

11

12

13

14

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Year

Mill

ions

1. Standard

3. Zero migration

Source: Australian Centre of Population Research

Number of occupations in shortage and unemployment rate, Australia, 1988 to 2007;

Proportion of Mature Age Workers in Selected Skill Shortage Occupations

Source: ABS Labour Force Survey (DEEWR trend data).

25.2

33.6

25.9

22.7

23.6

22.2

21

15.8

18.5

16.8

25

15.6

21.1

20.4

18.1

13

10.5

12.4

9.4

9.9

0 10 20 30 40 50 60

Dentists

Registered Nurses

General Medical Practitioners

Pharmacists

Civil Engineers

All Occupations

Electricians

Carpenters and Joiners

Accountants

Motor Mechanics

%

45 to 54

55 and over

Projected Job Growth by Industry 5 years to 2013-14 ('000s)

Source: ABS Labour Force Survey (DEEWR trend data); DEEWR Projections.

-44.8

-13.5

-2.7

-1.5

5.2

14.1

16.2

21.2

21.3

34.4

34.4

36.5

40.4

63.9

79.4

90.1

164.9

-60 -10 40 90 140 190

Manufacturing

Wholesale Trade

Mining

Finance and Insurance

Electricity, Gas and Water Supply

Government Administration and Defence

Personal and Other Services

Cultural and Recreational Services

Communication Services

Agriculture, Forestry and Fishing

Construction

Accommodation, Cafes and Restaurants

Transport and Storage

Property and Business Services

Education

Retail Trade

Health and Community Services

Projected Job Growth by Skill 5 years to 2012-13

Source: ABS Labour Force Survey (DEEWR trend data); DEEWR Projections.

42.4%

27.5%

12.8%

17.2%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Higher Education Skilled VET Other VET Low Skill

Share of Job Growth (%)

Jobs with good prospects - examples

• Accountants• Bookkeepers• Bricklayers• Cabinetmakers• Chefs and Cooks• Customer Service Managers• Dentists• Finance Managers• Financial Dealers/ Brokers• Fitness Instructors• General/Landscape Gardeners• General Medical Practitioners• Hairdressers

• Human Resource Professionals• Legal Professionals• Motor Mechanics• Occupational Therapists• Office Assistants/Managers• Pharmacists• Physiotherapists• Policy Analysts• Project/Program Administrators• Receptionists• Sales Assistants• Security Officers/Guards• Waiters

Summary and Issues

• Shift towards services sector and skilled jobs

• Short-term softening in labour market expected

• Longer-term slowing in labour supply growth – Ageing population

Useful Labour Market Information

• Australian Jobs Publication www.workplace.gov.au/australianjobs

• Job prospects of occupations www.jobsearch.gov.au/joboutlook

• Industry employment prospects at www.skillsinfo.gov.au

• State and Territory Skill Shortage Lists at www.workplace.gov.au/skillsindemand

• JobJuice helps young Australians who are looking for work and thinking about their future http://www.jobjuice.gov.au/

Thank You