High net migration during a period of no net job growth: implications for young job seekers.
Healy, Ernest
From July 2008 to July 2009 the labour force grew by 166,000 but
there was no increase in the number of people employed Consequently this
increase translated directly into growth in unemployment. But the burden
of unemployment was not shared equally. Previous work has shown that
employment actually grew among people aged 55 and over but fell among
those aged 15 to 34. Thus young people were disproportionately affected
The present article focuses on the contribution of Australia's
record levels of immigration. Most of the labour-force growth (88 per
cent) has been due to immigration and most migrants in the labour force
have found work, partly because changes in social welfare rules make
this essential for them, regardless of wages or conditions. In
consequence the competitive labour-market pressures facing young
Australians are now intense.
**********
In the previous issue of People and Place, (1) analysis of
Australian labour force survey data for the period March 2008 to March
2009 showed that the impact of the economic slowdown since late 2008 was
mainly affecting younger persons. Net employment growth in Australia
from March 2008 to March 2009 was just 23,000 persons. But employment
outcomes varied considerably by the age of the employed persons.
Employment growth among persons aged 55 years and over was relatively
strong at 122,000. By contrast, there was a decline in employment of
68,000 among persons aged 15 to 24 years.
The strong employment growth among older persons was consistent
with the long-term trend of increasing labour force participation rates
among older persons (for both men and women) reported in the previous
study. (2) The fact that this trend continued at a time when there was
little growth in overall employment was a surprising and perhaps
disturbing outcome. This is because it meant that young people seeking
entry to employment have had to cope simultaneously with competition
from the record high intake of migrants and of older persons staying on
in employment.
THE LABOUR MARKET SETTING
The scale of the current increase in the number of job seekers is
extraordinary. Australia's population is growing by about 400,000 a
year. Over the period July 2008 to July 2009 this translated into an
increase in the civilian population aged 15 plus of 317,000. Just over
half of these, or 166,000, entered the labour force (Table 1). As is
shown below, most of this increase is attributable to the current very
high level of net migration of around 250,000 per year.
Table 1: Labour Force, July 2008 and 2009 ('000)
July 2008 July 2009 Change
Employed 10,807 10,807 0
Unemployed 440 605 165
Civilian population (15+ yrs) 17,217 17,534 317
Labour force 11,247 11,413 166
Not in labour force 5970 6121 151
Source: Australian Bureau of Statistics (ABS). Labour Force, July 2009,
Table 3: Labour Force Status (original data)
Since there was no increase in the number of employed persons over
the July 2008 to July 2009 period, the growth in the labour force of
166,000 translated directly into a similar growth in the number
unemployed. The point of this inquiry is to assess who is the loser in
this situation.
The Australian government has embarked on a risky labour market
strategy of maintaining record high migration at a time when there is no
net growth in employment. If domestic job seekers are the losers, the
Labor Government needs to be held to account.
LABOUR MARKET OUTCOMES
The analysis of recently-released labour force survey data for the
period July 2008 to July 2009 shows that the patterns observed for the
March 2008 to March 2009 period have been repeated and accentuated.
Table 2 shows the net change in employment, unemployment and labour
force for the period July 2008 to July 2009.
Table 2: Change in labour force status for persons aged 15 years and
over by age and sex, Australia, July 2008 to July 2009
Males Employed full- Employed part- Employed Unemployed
time ('000) time ('000) total ('000)
('000)
15-19 -49.5 -4.1 -53.6 24.7
20-24 -40.3 35.2 -5.1 22.9
25-34 -32.2 12.1 -20.2 29.8
35-4 -41.2 23.2 -18.1 24.3
45-54 -15.6 19.7 4.0 21.2
55-59 20.5 -1.9 18.5 4.4
60-64 5.4 5.8 11.3 3.6
65 and over 3.4 14.6 17.9 3.0
Total 15 and over -149.5 104.6 -45.3 133.9
15-24 -89.8 31.1 -58.7 47.6
25-54 -89.0 55.0 -34.3 75.3
55 and over 29.3 18.5 47.7 11.0
Females
15-19 -0.5 -27.9 -28.4 3.7
20-24 -47.3 35.1 -12.0 0.0
25-34 5.8 -0.6 5.2 7.6
35-44 -7.0 13.6 6.4 8.3
45-54 -16.3 42.4 26.2 3.8
55-59 14.1 -2.6 11.4 7.3
60-64 4.9 26 30.8 -0.3
65 and over 4.3 1.1 5.3 1.3
Total 15 and over -42 87.1 44.9 31.7
15-24 -47.8 7.2 -40.4 3.7
25-54 -17.5 55.4 37.8 19.7
55 and over 23.3 24.5 47.5 8.3
Persons
15-19 -50.0 -32.0 -82.0 28.4
20-24 -87.6 70.3 -17.1 22.9
25-34 -26.4 11.5 -15 37.4
35-44 -48.2 36.8 -11.7 32.6
45-54 -31.9 62.1 30.2 25.0
55-59 34.6 -4.5 29.9 11.7
60-64 10.3 31.8 42.1 3.3
65 and over 7.7 15.7 23.2 4.3
Total 15 and over -191.5 191.7 -0.4 165.6
15-24 -137.6 38.3 -99.1 51.3
25-54 -106.5 110.4 3.5 95
55 and over 52.6 43.0 95.2 19.3
Males Labour force Not in labour Civilian Popul'n
('000) force ('000) ('000)
15-19 -29 36.5 7.5
20-24 17.8 0.2 18.0
25-34 9.7 29.1 38.9
35-4 6.3 4.6 10.8
45-54 25.3 -4.0 21.3
55-59 23.0 -15.7 7.3
60-64 14.8 3.9 18.7
65 and over 20.9 19.6 40.5
Total 15 and over 88.8 74.2 163.0
15-24 -11.2 36.7 25.5
25-54 41.3 29.7 71.0
55 and over 58.7 7.8 66.5
Females
15-19 -24.6 33.4 8.8
20-24 -12 25.9 13.9
25-34 12.7 20.3 33.0
35-44 14.8 -6.5 8.3
45-54 30.0 -9.0 21.0
55-59 18.6 -8.2 10.4
60-64 30.5 -9.7 20.9
65 and over 6.6 30.5 37.1
Total 15 and over 76.6 76.7 153.4
15-24 -36.6 59.3 22.7
25-54 57.5 4.8 62.3
55 and over 55.7 12.6 68.4
Persons
15-19 -53.6 69.9 16.3
20-24 5.8 26.1 31.9
25-34 22.4 49.4 71.9
35-44 21.1 -1.9 19.1
45-54 55.3 -13.0 42.3
55-59 41.6 -23.9 17.7
60-64 45.3 -5.8 39.6
65 and over 27.5 50.1 77.6
Total 15 and over 165.4 150.9 316.4
15-24 -47.8 96.0 48.2
25-54 98.8 34.5 133.3
55 and over 114.4 20.4 134.9
Source: Labour Force Survey, ABS, monthly data for July 2008 and July
2009.
The number of employed persons aged 15 years and over remained
virtually unchanged between July 2008 and July 2009. However,
disaggregation of employment change by age group reveals a severe
employment decline of 99,100 among younger persons aged 15 to 24 years.
The number of employed persons aged 25 to 54 years declined only
marginally, by 3,500. By contrast, the number of employed persons aged
55 years and over grew by 95,200.
As with the previous analysis, labour force status outcomes vary by
sex. Whereas female employment increased by 44,900, male employment
declined by 45,300. However, as was found with the analysis of the March
labour force survey data, the level of employment of both males and
females in the older age groups increased. The number of employed men
aged 55 years and over increased by 47,700. The figure for women aged 55
years and over was 47,500.
It is also notable that a significant part of the employment growth
for persons aged 55 and over was in full-time work (an increase of
52,600 in full-time work compared with an increase of 43,000 in
part-time work). This was in contrast to the trend among younger persons
aged 15 to 24 years, where there was a significant decline in full-time
employment (137,600) and a much smaller increase in part-time employment
(38,600).
The increase in employment among older people is a reflection of
the increased size of the cohort aged 55 years and over and an increase
in the labour force participation rates of this cohort. Table 3 shows
that there was a significant increase in labour force participation
rates among men and women aged over 55 years during the course of just
twelve months. As noted, this continues a pattern evident over the past
decade.
Table 3: Labour force participation rates by age group for July 2008
and July 2009 and percent point change between July 2008 and July 2009
by sex
Age Month/year Males Females Percentage point Percentage point
change July 2008 change July 2008
to July 2009 Males to July 2009
Females
15-19 July 2008 57.8 59.6
July 2009 53.4 55.5 -4.4 -4.1
20-24 July 2008 84.0 79.0
July 2009 84.4 75.9 0.4 -3.1
25-29 July 2008 91.3 74.7
July 2009 90.4 75.1 -0.9 0.4
30-34 July 2008 93.5 72.3
July 2009 90.9 70.3 -2.6 -2.0
35-39 July 2008 92.4 72.3
July 2009 92.7 74.3 0.3 2.0
40-44 July 2008 90.8 78.0
July 2009 90.1 77.0 -0.7 -1.0
45-49 July 2008 89.5 79.7
July 2009 89.5 80.3 0.0 0.6
50-54 July 2008 86.9 74.7
July 2009 87.8 76.0 0.9 1.3
55-59 July 2008 76.5 61.1
July 2009 79.2 63.0 2.7 1.9
60-64 July 2008 57.7 37.6
July 2009 58.4 41.5 0.7 3.9
65-69 July 2008 28.2 14.7
July 2009 34.3 15.7 6.1 1.0
70+ July 2008 8.3 2.2
July 2009 7.0 2.2 -1.3 0.0
Source: See Table 1.
HIGH NET OVERSEAS MIGRATION, ECONOMIC SLOWDOWN AND LABOUR
OVERSUPPLY
This section explores the impact of migration in the recent
Australian labour market. It is built around Australian Bureau of
Statistics (ABS) labour force survey data for the period June 2008 to
June 2009. (3) This period is examined because it provides estimates of
the labour force and employment numbers of recently-arrived migrants.
Such data were not available for the July 2008 to July 2009 period at
the time of writing.
Table 4 shows the labour force status for the period June 2008 to
June 2009 of overseas-born persons by country of birth and time of
arrival in Australia. The total increase in the overseas born civilian
labour force aged 15 plus over this period was 228,500. This estimate
confirms that most of the huge recent growth in the civilian population
in Australia aged 15 plus is due to the current high level of net
overseas migration. Likewise, most of the growth in the Australian
labour force of 165,500 persons was also attributable to net overseas
migration. The total migrant workforce increased by 145,700 between July
2008 and July 2009. This represents 88 per cent of the total labour
force growth during this year.
Table 4: Labour force status by country of birth by time of arrival,
June 2008 and June 2009
Employed Unemployed Labour Not in Civilian
total total force labour population
('000) ('000) ('000) force ('000)
('000)
June
2008
Australia 7,927.2 341.7 8,268.9 4,031.9 12,300.8
Main English-speaking countries (MESC)
Before 1991 699.3 16.2 715.5 463.6 1,179.1
1991-1995 83.8 3.4 87.1 23.7 110.8
1996-2000 118.0 3.0 121.0 29.2 150.2
2001-2005 141.1 2.9 144.0 35.3 179.3
2006-2010 116.7 7.5 124.1 28.4 152.6
Non English-speaking countries (NESC)
Before 1991 881.5 28.9 910.6 844.8 1,755.1
1991-1995 165.3 8.6 173.9 85.1 259.0
1996-2000 212.1 15.5 227.5 116.1 343.7
2001-2005 254.4 16.0 270.4 125.3 395.7
2006-2010 192.1 22.3 214.4 153.1 367.5
Total MESC June 1.158.9 33.0 1,191.7 580.2 1,772.0
2008
Total NESC June 1,705.4 91.3 1,796.8 1,324.4 3,121.0
2008
Total June 2008 10,791.5 466.0 11,257.4 5,936.5 17,193.8
June
2009
Australia 7,874.5 440.9 8,315.4 4,103.3 12,418.7
MESC
Before 1991 659.5 28.6 688.1 442.2 1,130.3
1991-1995 77.5 6.9 84.4 20.9 105.4
1996-2000 111.7 5.9 117.6 29.7 147.3
2001-2005 159.2 8.6 167.8 32.1 199.9
2006-2010 153.2 12.8 166.0 40.6 206.6
NESC
Before 1991 835.7 46.9 882.6 856.6 1,739.4
1991-1995 166.4 19.1 185.4 94.9 280.4
1996-2000 189.8 15.5 205.3 105.1 310.4
2001-2005 264.4 27.4 291.9 132.4 424.2
2006-2010 277.0 41.2 318.2 223.8 542.0
Total MESC June 1,161.1 62.8 1,223.9 565.5 1,789.5
2009
Total NESC June 1,733.3 150.1 1,883.4 1,412.8 3,296.4
2009
Total June 2009 10.768.9 653.8 11,422.7 6.081.6 17,504.6
Change June 2008 to June 2009
Australia -52.7 99.2 46.5 71.4 117.9
MESC
Before 1991 -39.8 12.4 -27.4 -21.4 -48.8
1991-1995 -6.3 3.5 -2.7 -2.8 -5.4
1996-2000 -6.3 2.9 -3.4 0.5 -2.9
2001-2005 18.1 5.7 23.8 -3.2 20.6
2006-2010 36.5 5.3 41.9 12.2 54.0
NESC
Before 1991 -45.8 18.0 -28.0 11.8 -15.7
1991-1995 1.1 10.5 11.5 9.8 21.4
1996-2000 -22.3 0.0 -22.2 -11.0 -33.3
2001-2005 10.0 11.4 21.5 7.1 28.5
2006-2010 84.9 18.9 103.8 70.7 174.5
Total MESC June 2.2 29.8 32.2 -14.7 17.5
2008-09
Total NESC June 27.9 58.8 86.6 88.4 175.4
2008-09
Total June -22.6 187.8 165.3 145.1 310.8
2008-09
Source: Labour Force Survey. ABS, monthly data for June 2008 and June
2009
Equally important, nearly all of this migrant labour force growth
appears to derive from migrants who arrived after 2005. Between June
2008 and June 2009 the number of migrants in the workforce who arrived
after 2005 grew from 338.5 thousand to 484.7 thousand or by 145.7
thousand. It is reasonable to assume that the great majority of these
migrants arrived in Australia during the year June 2008 to June 2009.
Most of these migrants appear to have found employment. There was
an increase in employment of 121,400 between June 2008 and June 2009
among those who arrived in Australia after 2005. This was at a time when
the total number of employed persons in Australia declined by 22,600. At
the same time, 24,200 unemployed persons, or approximately 13 per cent
of the increase in unemployed persons between June 2008 and June 2009,
consisted of persons who arrived after 2005. By contrast, 99,000 or 53
per cent of the growth in unemployment between June 2008 and June 2009
consisted of the Australian-born.
This increase in migrant employment occurred at a time when the
total number of young people aged 15 to 24 employed fell by 99,000 (see
Table 4). It is highly likely that the two developments are causally
linked. Official education-to-work data suggest that about 116,000
school leavers are currently entering the job market each year as are
another 100,000 university and other tertiary graduates aged less than
25 years. (4) For the less-skilled school leavers the competition for
entry-level jobs is fierce. There are hundreds of thousands of
international students, working holidaymakers and 457 visa-holders in
Australia as well as thousands of recently-arrived permanent
entrants--many of whom were former overseas students or 457
visa-holders.
These migrants have to work. Temporary entrants do not have access
to social security or labour market benefits and permanent entrants have
to wait two years before they can access such benefits.
POLITICAL IDEOLOGY PRESIDING OVER REALITY
The preoccupation of the Australian government and many media
commentators with the view that high net overseas migration is a
corrective measure for the negative affects of population ageing on
labour force growth, and that it is a driver of economic prosperity, has
meant that labour over-supply in a time of economic slow down has been
virtually ignored. Much media commentary continues to operate according
to this pre-crisis rationale, which treats high population growth as
benign for domestic employment outcomes.
The Immigration Minister has just announced an overhaul of
Australia's immigration program, in part due to the strains it is
placing upon employment outcomes for domestic workers. (5) However, it
remains clear that the overriding priority of the Minister is to ensure
that the policy direction pursued prior to the economic crisis continues
uninterrupted. The Minister's comments consistently point to a
largely self-regulating, employer-driven skilled-migration program,
where the intake rises and falls in line with the ebbs and flows of the
international market place. This approach takes for granted a hands-off
stance by government and continued massive inflows of students, working
holiday makers and other temporary entrants with work rights.
Reminiscent of the immigration approach of the Hawke labour government
of the late 1980s, the Minister considers that these are the
fundamentals of the 'global economy' in which we now all live
and to which Australians must become accustomed. (6)
CONCLUSION
It is now urgent that the federal Labor government take control of
the immigration program. It should revise the scale of net overseas
migration to take account of the current sluggish economic climate and
its impact on young people. If this is not addressed, the combined
competitive pressure within the Australian labour market from increasing
labour force participation by older persons and historically-high net
overseas migration will likely continue to diminish and downgrade the
employment prospects of younger Australians.
The July 2008 to 2009 labour force survey data indicate that the
upward trend in labour force participation rates among older persons
shows no sign of abatement. As Table 3 showed, the percentage point
increase in the participation rates of men and women aged 55 to 59 years
during the twelve months to July 2009 was significant (2.7 and 1.9
percentages points respectively). These data highlight the extent to
which the federal Labor Government has underestimated the potential
contribution of older persons to labour force growth, at least in the
medium-term.
It might be argued that the influx of migrant job seekers at a time
when there is no net growth in employment is a temporary phenomenon.
However, it appears that the response of many employers has been to
reduce hours of work for their employees, rather than to simply lay
workers off. The data examined in Table 2, which show significant growth
in part-time work, are consistent with this view. So are the data the
ABS has published on the reduction in the aggregate number of hours
worked over the past year (a reduction of 2.3 per cent between July 2008
and July 2009). (7) The ABS has emphasised how exceptional such a
reduction is in stating: 'Over the last 24 years, aggregate monthly
hours worked has generally trended upwards, with the notable exceptions
observed in 1990-92, 2000-01 and 2008-09'. (8) In these
circumstances, when the economic recovery commences the rate of increase
in the employed workforce is likely to be low while the under-utilised
capacity of persons already employed is drawn on. (9) If so, young
people in Australia will face an extended period of severe job
competition for entry level jobs.
At present, the Labor Government's immigration and labour
market policy settings are in conflict. The Government claims that its
economic policy is directed at protecting Australian jobs, yet it
appears to be unwiilling to address this issue.
References
(1) E. Healy, 'Population ageing and the employment surge
among older Australians', People and Place, vol. 17 no. 2, 2009,
pp. 1-15
(2) ibid.
(3) Labour force survey data for July 2008 to July 2009 with
required detail were not available at the time of writing.
(4) Education and Work, Australian Bureau of Statistics (ABS), May
2008, Table 20
(5) 'Migration rules set for a revamp', The Age, 31
August 2009, p. 1
(6) Breakfast Program, Interview with the Minister for Immigration
and Citizenship, Senator Chris Evans, Radio National, 1 September 2009
(7) Labour Force Australia, Catalogue no. 6202.0, ABS, July 2009
(8) 'Recovery at work?', The Age, 14 August 2009, p. 15