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WA’s labour market in dire straits ahead of national Jobs and Skills Summit

by Ozva Admin

Australia has the second worst labor shortage in the world behind Canada, according to June figures from the OECD, and is arguably the hardest to find workers in Western Australia.

Retail workers, general administrative employees, and nurses are the most advertised positions across the country.

It’s the same in WA, but things look a little different beyond the top three.

Metal fitters, mechanics, and electricians are the next most advertised occupations in the state.

But these figures do not paint the full picture.

More than four out of five businesses indicated they were having difficulty finding workers, according to the June Business Confidence report from the WA Chamber of Commerce and Industry (CCIWA).

Among them, resource, retail, and agriculture businesses were most likely to report skills shortages as a problem.

Health and medical workers are also in high demand, making up 46 of the 106 recent additions to the state’s list of skilled migration occupations.

A silhouette of a nurse in front of a large crowd with banners and umbrellas.
Nurses have spoken about the urgent need for more staff and resources in the WA health system.(ABC News: Cason Ho)

Despite the skills crisis, only seven of the 146 attendees at the National Jobs and Skills Summit will be from WA.

WA resilience is now a challenge

Western Australia has been walled off for much of the past two and a half years, allowing it to fend off the first waves of the COVID-19 pandemic.

The state’s economy continued to grow, but with a sealed border, it had cut off its access to workers.

Bankwest Curtin Center for the Economy director Alan Duncan will be one of seven Western Australians with a seat at the summit table.

A man in a suit sits in an empty boardroom.
Distinguished Professor Alan Duncan hopes the summit will provide holistic solutions.(ABC News: Cason Ho)

He said WA’s resilience through COVID-19 had created the tightest job market in the country.

“The state probably faces greater challenges in filling vacant positions than any other state in the country,” he said.

How do we solve the labor shortage?

“For me, one of the missing parts of the story is productivity and how we drive productivity gains,” said Professor Duncan.

Instead of simply trying to get more workers to fix skills shortages, he argued that we should invest more in upskilling our workers.

Worker grinds the inside of a pipe at Alltype Engineering, Perth, July 2016
Perth has seen the highest relative growth in online job postings among Australian capitals since pre-COVID.(ABC News: Glyn Jones)

The Perth Committee identified a “skills mismatch” among recent graduates as a major issue in its Race to the Top report looking at WA’s workforce.

“There remains a sizeable proportion of the labor market working in jobs that do not match their skills and education,” the report found.

In a conversation piece he surveyed 50 Outstanding Australian Economists on solving skills shortages, the consensus was that addressing education and skills would pay off more.

But education and training take time, and having a skills shortage ‘crisis’ would imply a lack of such time.

Attract workers to WA

The state government has been trying to tempt interstate and overseas workers with a series of temporary initiatives as a more immediate measure.

Man in a suit and tie at an airport counter with security glass.
Prime Minister Mark McGowan flew to Rome in June to “attract more skilled workers to WA.”(ABC News: Cason Ho)

It is now cheaper to apply for a skilled immigrant visa, and there is less bureaucracy involved with reduced work experience, language and funding requirements.

But even if every one of the state’s 8,140 skilled immigration locations were filled, it’s just a drop in the bucket.

In the mining and resources sector alone, the WA Chamber of Minerals and Energy last year reported a potential shortage of up to 40,000 workers by mid-2023.

That’s just one sector, and the job market has only tightened since then.

Three people in chef uniforms working on a stainless steel bench with ingredients.
Migration has played a significant role in the WA workforce.(ABC News: Cason Ho)

Professor Duncan said that he hoped the Jobs and Skills Summit would have a strong focus on migration, and said it was important that it did.

But he and other leading economists across the country agreed that fixing the skills shortage was not as simple as throwing more bodies at the problem.

Latent job and job change

Accessing underutilized areas of the WA workforce might work, but it can also be difficult.

It’s harder to find people in WA who want to work more, or in a more skilled job, than most of Australia.

The underemployment rate in WA is 5.4 percent, compared to the national figure of 6 percent.

A woman wearing a mask stands behind a restaurant counter.
A healthy amount of labor mobility, or job switching, is good for economies.(ABC News: Cason Ho)

But even if you don’t want to work anymore, if you’ve ever wanted to change your career, this may be the time to do it.

The Perth Committee found that increased job mobility, or the number of people moving between different occupations, would be key to addressing future labor demands.

There is no single or simple solution to the jobs crisis, which the Jobs and Skills Summit hopes to address.

Even though WA played a critical role in keeping Australia’s economy afloat during the pandemic, the state will have a relatively small representation at the summit.

“While the Western Australian labor market has been performing well, that has brought some really significant challenges when it comes to skills shortages.”

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