In Australian policy circles, there’s a phrase that is used so often that it sounds like the weather: you just deal with it. We need more people with skills. Hospitals don’t have enough staff. Building is behind schedule. Engineers are hard to find. Usually, the argument goes that more people should be brought in. They are already here, though, which is something that no one seems to want to say. Several hundred thousand of them. Probably tens of thousands.
The Australian Bureau of Statistics has released new information that shows there are more than 330,000 open jobs across the country. The largest gaps are found in education, health care, engineering, and construction. The numbers are very important, as you might expect. But right next to them is a number that doesn’t get nearly as much attention: 620,000 permanent migrants who are working below their skill level. Not out of work. Not not skilled. I just… misallocated. There is no story about a surgeon driving a taxi. It starts to look like a system doing exactly what it was made to do at this size.
It’s almost hard to believe the most important examples. That same year, Australia had its biggest engineering shortage in ten years, and about 47,000 migrant engineers were working in jobs that were not related to their field. About 20,000 teachers are not being used to their full potential, and eight out of ten public schools are short-staffed. 16 000 nurses are stuck in a state called “recognition limbo.” While the housing market is in what has been called the worst crisis in a generation, electricians are out of work. You can argue about the specific numbers, but it’s hard to ignore the pattern as a whole.
What’s making this happen? It’s frustrating that the answer is paperwork. In this case, it’s a bureaucratic structure that was put together without giving much thought to how the different parts fit together. A person’s qualifications must be officially checked out before they can get a skilled migration visa. This can take months and cost a lot of money. In reality, though, those evaluations don’t matter much once they get there and want to do their job. They start the whole process over with gets. Because occupational licensing is still mostly a state-by-state deal in Australia, they might have to start over in a different state. In Western Australia, a nurse who is licensed in Queensland is not automatically recognized. Martin Parkinson, who used to be the Treasury secretary, made the point clearly at the National Press Club: it took decades, but a common rail gauge was finally standardized. A hundred and twenty-five years after Federation, Australia still can’t agree on how to recognize professional licenses from other countries.
Violet Roumeliotis, CEO of Settlement Services International, has been making this case for a while now. If you want to sit with her frame, do it. Two out of every three permanent migrants to Australia who aren’t being used came through the skilled migration stream. This means that Australia chose them, evaluated them, and invited them based on the skills it said it needed. Then they made a separate system that doesn’t do much of that work when they land. It’s not shady to call that a failure of the structure. It is just right.
Over 130 groups have backed the Activate Australia’s Skills campaign, which has four specific ideas: a single national governance system for recognizing qualifications; better integration between immigration assessments and employment licensing; financial support to get rid of cost barriers; and migrant employment hubs to help qualified people get back to their jobs. These ideas are not too far-out. They’re mostly just fixing things on the administrative side of a system that was never really put together right to begin with.
There’s also an economic point to be made here. Parkinson has said that skills recognition reform is one of the few things that can be done to help the economy without spending more money or changing the way things are built. This is because productivity growth is at an all-time low and inflation is still a big problem. The workers are there. The jobs are there. The gap between them is mostly caused by bureaucratic red tape, which grew over time and almost by accident. If politicians want to, they can get rid of this red tape.
To be honest, it’s still not clear if that will exists. Reforms like these don’t make the news like new immigration announcements do. They’re not cool. But seeing as how 47,000 engineers don’t work while the country brings in workers to do engineering jobs, it seems like the cost of not fixing this is quietly getting very high.
