Businesses across Australia are battling labor shortages as the economy lifts out of the Covid slowdown. The latest data reveals there are 288,700 unfilled positions in Australia, which translates to the highest job vacancy rate ever recorded.
Hospitality is the hardest hit industry, with 88 percent more job vacancies than a year ago and employers scrambling to rehire workers they previously let go. The hot housing market has pushed construction vacancies up 61 percent and real estate vacancies up 44 percent. Vacancies in retail and manufacturing are up more than 30 percent.
As businesses struggle to find workers, some might come to the conclusion that Australian policymakers have completely misdiagnosed the problem. Only a few weeks ago, Treasurer Josh Frydenberg justified a big-spending budget on the basis that we needed to stimulate the economy to boost jobs and reduce unemployment. But the reality on the ground is the opposite. If the extra vacant jobs had been filled, the unemployment rate would already be lower than before the pandemic. Australia has a lack of workers, not a lack of jobs.
The slow rollout of vaccines and delay in opening international borders is exacerbating the problem by robbing many industries of much-needed international workers. The federal budget revealed that 72,000 more people will leave Australia than arrive this year. That’s a huge turnaround from the year before, when we had a net inflow of 154,000 migrants. Across this decade, there will be a million fewer people in Australia due to COVID’s impact on migration.
To address the national shortage, Australia needs to lift the overall supply of workers. That means ending the “fortress Australia” mentality of closed borders and speeding up the vaccine rollout so we can safely reopen the country.