Labour shortages in Australia: what role for missing migrants?

by Jack Buckley, Matt Elias

The e61 Institute has published a new Research Note to help inform the current debate around migration policy reform and the impact of recent declines in net overseas migration on labour supply. The Research Note quantifies the role of ‘missing’ migrant workers in Australia’s current labour shortages and highlights those industries which have been most severely affected.

Key conclusions:

  • There are between 57,000 and 186,000 ‘missing’ temporary migrant workers, according to e61 analysis. The COVID-19 pandemic has disrupted our migrant-driven growth model and had a material effect on the supply of migrant workers.
  • These missing workers are a significant driver of Australia’s workforce challenges. Missing temporary migrant workers plausibly account for more than 19 per cent of the recent spike in job vacancies, even under our most conservative ‘low’ scenario where the number of migrant workers remains at 2019 levels.
  • The shock has hit some industries harder than others. A large portion of missing migrant workers are concentrated in industries like hospitality that previously relied heavily on international students and working holiday makers. Even under our low scenario, missing migrant workers can potentially account for 83 per cent of the increase in job vacancies in hospitality.
  • These results support several important points regarding current migration policy:
  1. Measures announced at the Jobs and Skills Summit may help boost immigration, but more will need to be done to accommodate the scale of catch up required, including policies to increase the supply of housing and investments in infrastructure
  2. There is an implicit assumption that Australia remains an attractive destination for migrants. But global competition for labour is heating up. Our poor treatment of temporary migrants during the pandemic might reduce the attractiveness of Australia. It is critical that policymakers also consider how we allocate our existing stock of talent more efficiently as well as looking to grow the stock.