- Australia’s unemployment rate sit at 6-year lows. Job vacancies are at record highs.
- Despite the strongest labour market conditions in years, long-term unemployment still sits at elevated levels.
- Australian businesses are reporting increased difficulties finding suitably skilled staff.
- With over 670,000 Australians currently unemployed, it suggests the problem right now is not a lack of workers but rather finding those with required skills.
Australia’s jobs market hasn’t been this strong in years.
Clearly, it’s a pretty good time for anyone looking for a job.
Just look at this chart from Macquarie Bank for evidence.
As a percentage of Australia’s labour force — those in or actively seeking work — the share of people unemployed for less than three months has fallen to the lowest level in over 40 years.
Australia’s labour force is currently 13.34 million, according to the ABS.
However, while that suggests it’s very easy to find a job, the booming jobs market doesn’t mean everybody can find work right now.
As seen in the next chart from Macquarie, while short-term unemployment has fallen to multi-decade lows, the proportion of the workforce who has been unemployed for over a year still sits at elevated levels.
For those unemployed for over two years, the proportion is actually continuing to trend higher despite recent strength in hiring.
While it would be easy to label these people as being too picky, lazy or just plain old dole bludgers, the more likely scenario is that there is a mismatch between the skills these workers have and those required for the jobs that are currently available.
The same skills that previously guaranteed a job are not necessarily those demanded by employers today, making it more difficult for those with obsolete skills to re-enter the workforce.
In the latest Australian business confidence report released by the National Australia Bank (NAB), a majority of survey respondents reported difficulties in finding suitably skilled staff, sitting well above the average level seen throughout the past two decades.
While that partially reflects the pool of available workers is now smaller with unemployment sitting at multi-year lows, with nearly 700,000 Australians currently out of work, many of them long-term, it suggests the problem is not finding staff but rather those with suitable skills.