Australias Labour Market and its Challenges

Ivan Neville Labour Supply and Skills Branch Department of Education, Employment and Workplace Relations 20 March 2009

Labour Market Conditions

Labour market conditions remain relatively strong: - Unemployment rate: 5.2%
- Employment rate:
- Participation rate:

72.9%
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:

Indigenous Unemployment Rate:

- Indigenous Employment Rate: - Australian Employment Rate:

4.8% 14.0% 50.3% 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

Bachelor Degree

Certificate III/IV

Year 12

Year 10 or below

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

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

Weekly Earnings by Selected Education Qualifications

Bachelor Degree

Certificate III/IV

$2000 or more $1000-$1999 $1-$999 Year 12

Year 10 or below

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

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

Job Growth by Industry

5 years to November 2008 (000s)
230.1 191.0 165.1 100.1 99.0 85.3 74.8 54.0 47.9 45.7 41.4 33.2 23.2 12.2 11.8 9.6 -8.0 -20 30 80 130 180 230 Construction Health and Community Services Property and Business Services Retail Trade Education Transport and Storage Mining Accommodation, Cafes and Restaurants Finance and Insurance Cultural and Recreational Services Government Administration and Defence Personal and Other Services Electricity, Gas and Water Supply Wholesale Trade Communication Services Manufacturing Agriculture, Forestry and Fishing 280

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

Job Growth for Skilled & Low Skilled Labour

150 Managers 140

Professionals 130

Tradepersons 120

110

Elementary workers

Labourers 100

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

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

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

Higher Skilled Occupations

Medium Skilled Occupations

Lower Skilled Occupations

Total

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

Proportion of re porte d v acancie s Vacancies unfilled Vacancies filled with jobseekers who required development

Source: DEEWR Survey of Employers Recruitment Experiences.

Reasons Vacancies Difficult to Fill

(Selected Reason)

Source: DEEWR Survey of Employers Recruitment Experiences

Impact of Global Financial Crisis

Latest forecasts from the Treasury (February 2009)

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

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 Projection

Projected Labour Force

2000 to 2050
14

1. Standard 3. Zero migration

13

12

Millions

11

10

8 2000

2005

2010

2015

2020

2025
Year

2030

2035

2040

2045

2050

Source: Australian Centre of Population Research

Proportion of Mature Age Workers in Number of occupations in shortage and Selected Skill Shortage Occupations
Dentists 25.2 25

unemployment rate, Australia, 1988 to 2007

Registered Nurses 25.9 22.7 23.6 22.2 21 15.8 18.5 16.8

0 10

33.6 21.1 20.4 18.1 13 10.5 12.4 9.4 9.9

20 30

15.6

General Medical Practitioners Pharmacists Civil Engineers All Occupations Electricians Carpenters and Joiners Accountants Motor Mechanics

45 to 54 55 and over

40

50

60

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

Projected Job Growth by Industry

5 years to 2013-14 ('000s)
164.9 90.1 79.4 63.9 40.4 36.5 34.4 34.4 21.3 21.2 16.2 14.1 5.2 -1.5 -2.7 -13.5 -44.8 -60 -10 40 90 140 Health and Community Services Retail Trade Education Property and Business Services Transport and Storage Accommodation, Cafes and Restaurants Construction Agriculture, Forestry and Fishing Communication Services Cultural and Recreational Services Personal and Other Services Government Administration and Defence Electricity, Gas and Water Supply Finance and Insurance Mining Wholesale Trade Manufacturing 190

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

Projected Job Growth by Skill

5 years to 2012-13
45% 42.4% 40% 35%

30%

27.5%

25%

20%

17.2% 12.8%

15%

10%

5%

0% Higher Education Skilled VET Other VET Low Skill

Share of Job Growth (%)

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

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