Instead, the push has been on to import large numbers of extra workers. That's an academic way of saying this: There's an easy fix to skills shortages - pay higher wages. Labour, like capital, will gravitate towards the area where it will earn the highest return. Labour markets operate in much the same way as capital markets.

Twenty years later, however, and we're told we are still facing the exact same dilemma, particularly when it comes to fruit pickers and restaurant workers, if they are considered key skills.īut here's a thought. The report goes on and on in its examination with a wide range of recommendations. In particular, pastry chefs, mechanics, upholsterers, boilermakers, sheet metal workers and panel beaters were hard to find.Īmongst the professions, accountants, a wide range of health professionals, specialised engineers and even secondary school teachers were listed. The Department of Employment noted skills shortages in some trades going back to 1994. The Australian Chamber of Commerce and Industry added that skills shortages had been 'a major concern for Australian industry for most of the past decade.' Why is Australia experiencing its slowest wages growth since World War II? There are countless theories, but many come back to a shift in power between workers and employers. Submissions from key business lobby groups the Australian Industry Group and the Business Council of Australia complained of immediate skills shortages, a lack of quality applicants, long-term shortages of key skills, an ageing population and the need to train and upskill existing workers. In 2002, the Howard government ordered an inquiry into skills shortages, labour demand and education requirements to equip the economy for the new millennium. If our education system is so appalling, why do legions of foreign students fight to get a place in our universities and colleges and pay through the nose for the privilege? The RBA has failed for almost six years to get inflation off the mat, into the sweet spot between 2 and 3 per cent, primarily because of weak wages growth.Īnd if our workplace skills really are so poor, what does that say about our education system? How could it possibly have failed so comprehensively at a primary, secondary and tertiary level for more than 20 years? Stagnating wages is the single biggest factor behind the Reserve Bank's inability to fire up the economy. We're told we are still facing the exact same dilemma, particularly when it comes to fruit pickers and restaurant workers.

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