Manufacturing News

Closed borders portend labour shortages, poaching

Manufacturing News

Closed boarders have dried up the supply of workers arriving in Australia, suggesting we are heading to a period of labour poaching and outright shortages.

Well known commentator Bernard Salt (pictured) of The Demographics Group took to social media to highlight the massive contribution of foreign workers in our workforce.

He wrote that between the last two censuses – 2011-2016 – the proportion of net new workers added to the Australian workforce that derived from 457 visa holders, backpackers, foreign students, seasonal workers and skilled immigrants was an astonishing 74 per cent.

This figure was higher in places like Canberra and lower in places like Taree and Victor Harbor.

Salt, best known from his time at KPMG, wrote: “This figure shows the extent to which our workforce has relied upon access to overseas skilled workers.

“But border closures since March 2020 have meant that the ‘hydraulic hoses’ feeding workers into the workforce have been kinked.

“We can ‘get by’ for a while without accessing our usual sources of labour but mid 2021 the situation becomes critical.”

Salt wrote that in the next stage Local TAFE colleges and universities ramp up ‘production’, some workers may come out of or postpone retirement, or they simply re-enter the workforce.

The phase after ‘ramping up local skills’ is ‘labour poaching’, where industries and businesses and state governments coax workers from one industry or state to another.

“The pandemic has taught us the need to be far more self-sufficient in manufacturing, and in locally developing skills to service our workforce needs in the 2020s and beyond.”

While Salt did not go any further that this, the next steps are absolute labour shortages, rising competition for workers and – after a prolonged period of falling real wages – an outbreak of wage rises and, potentially, inflation.

Picture: Bernard Salt

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