POST 87: IS THE TEMPORARY MIGRATION PROGRAM MAKING IT HARDER FOR WEST AUSTRALIAN YOUTH TO FIND WORK?

IS THE TEMPORARY MIGRATION PROGRAM MAKING IT HARDER FOR WEST AUSTRALIAN YOUTH TO FIND WORK? There was some good news in the recent ABS employment data. But unemployment figures for young people (age 15-24) are disturbing.

By March 2021, WA youth comprised a staggering 36.2 % of total unemployment figures. The large number of young temporary migrants in WA is proving a obstacle to gaining work. There are 1.76 million temporary foreign workers in Australia. Low-skilled migrants comprise at least 10 percent of the younger low-skill workforce.

This is a big challenge for the McGowan government they have failed to deal with over the past 4 years, amplified by the Covid 19 pandemic impact on employment from March 2020 onwards.

Official unemployment plus not in the labour force.

The official estimate is 25,400 WA youth (age 15 to 24) looking for employment and the rate at 11.2%. But this is not the whole picture.

Population Research incorporates WA youth that have dropped out of the Labour Force since the Covid 19 arrived in March 2020, see Chart 1 below.

The Australian Bureau of Statistics (ABS) describes the labour force as any group, people who were employed or unemployed.

According to the ABS, most people who leave employment tend to move to being not in the labour force, rather than into unemployment. There is also the case of Discouraged workers who would like a job but have given up looking are not in the labour force either. 

To better inform government policy, it is critical to incorporate people dropping out of the Labour force along with the official unemployment figures.

According to the ABS, labour force gross flows’ are an important complement to headline estimates in understanding underlying labour market activity.

Population Research strongly recommends the McGowan government examine the numbers dropping out of the labour force monthly flows, when developing State migration policy.

 ABS labor force surveys

The ABS labour force surveys and data provide the foundation for government bureaucrats to build solid employment planning and sensible migration programs.

One of the reasons for large State migration programs is predicated on the scarcity of young local citizens, unable to fill jobs in an expanded labour market? The ABS surveys indicate Western Australia is not at that stage.

Therefore, the WA Labor government should put the brakes on their migration program. We currently have an abundance of young WA citizens, unemployed unable to get a local job.   

We suspect (given that ABS surveys demonstrate most people who leave employment tend to move to being not in the labour force, rather than into unemployment) the real unemployment numbers are above the blue line shown in Chart 1 below.

Chart 1 reveals how destructive the Wuhan coronavirus was to West Australia’s economy and in particular younger workers.

In April 2020 over 65,000 people aged 15-24, were either unemployed or not in the labour force. The official unemployment rate was 16.4 %, included those not in the Work Force the rate doubles to 32.2%.

While it has dropped by over 50% in the 12-month period, it is still significant. At March 2021, 31,500 young West Australian’s surveyed are jobless, highlighted in Chart 1 below.

(Source: Australia Bureau of Statistics, Labour Force Australia, March, 2021.)

Notes: The data for not in the Labour force is cumulative. Labour force cumulative monthly data (original) from March – April 2020 to February – March 2021.

Why does the McGowan government ignore the evidence?

A report by the Grattan institute indicates Australia’s system has undergone radical policy change to encompass a predominantly low-skill migration system – particularly international students and working holiday makers. This is a big change from a decade ago when a much greater proportion of migrants were more skilled. New low-skill migrants now comprise at least 10 per cent of the younger low-skill workforce.

Why are WA youth finding it so hard to break into the workforce? In 2016, The Productivity Commission, (PC) provided State Governments with robust modelling showing  low skilled foreign labour is taking up jobs and causing persistent local youth unemployment.

In their final report the PC recommended Federal government commission a  public inquiry into State labour markets and broader economywide effects of work rights for international student, temporary graduate and working holiday maker visa holders.

The enormity of the temporary foreign workforce in Australia is that there are 1.76 million still in the country. Most temporary entrants have remained in Australia throughout the Covid 19 pandemic.

How did younger people fair in the economic recovery after the February lockdown?

The ABS employment data highlight there was a huge economic and employment hit in WA due to the McGowan government’s 5-day lockdown in February.  This resulted in a massive 183% increase in people stood down from work from around 8 000 in January 2021 to 23 000 in February 2021.

The ABS data demonstrated it was WA youth who suffered most due to the lockdown.

The employment recovery in March 2021 was with general employment showing an increase in nearly 15,000 more people joining the Labour force. The positive figure for general labour force is because they have much smaller cohort of unemployed people than WA’s youth Labour force. General unemployment (official rate) is 4.7%, youth unemployment is at 11.2%.   

An exceedingly small number of young West Australians (620) were added to the labour force in March 2021, 3% of the total new additions.

Conclusion

Population Research WA has consistently recommended the McGowan government be more cautious with their migration program. The government appear be ignoring the evidence.

Clearly the Labor government are struggling to reconcile their poor record on youth unemployment with their policy of attracting thousands more young temporary migrants through their Perth regional visa policy and Student visa program?

In 2017, Mark McGowan said his first move as Premier would make it easier for locals to find work. The incoming Premier kept his word. Immediately removing a pathway for overseas workers to obtain a visa by removing Perth from the regional sponsored migration scheme. The Labor leader recognised the negative impacts of mass migration on local labour in 2017, but not in 2021, why?

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