Labour Shortages Vs Skills Shortages

June 17, 2016
Iain MacLeod

There have been some very interesting employment vacancy figures released this week that further illustrate the relative strength of the labour market in New Zealand.

According to the Ministry of Business, Innovation and Employment for May 2016:

  • Online vacancies increased by 2.4 per cent over all during the month.
  • Vacancies increased in all industry groups. The main contributors were hospitality and tourism (up 1.9 per cent) and education and training (up 1.7 per cent).
  • Vacancies increased in all occupation groups. The largest increases were for machinery drivers and operators (up 3.6 per cent), labourers (up 3.4 per cent), and technicians and trades (up 3.1 per cent).
  • Vacancies increased in all ten regions. The Bay of Plenty region saw the strongest growth (up 3.0 per cent). This on top of news that tourism has led to the country earning more money than it is spending, i.e. a trade surplus. That explains the ongoing growth in tourism and hospitality related jobs being created.

What is interesting from an immigration perspective is the disconnect between New Zealand’s labour market needs/labour shortages and ‘skilled’ migrant criteria for residence.

Simply having a job and filling a hole in the labour market is no guaranteed pathway to long term residence.

We are, for example, seriously short of Heavy Truck Drivers and it is possible to get a work visa to be one but not possible to qualify for residence under the skilled migrant ‘points system’ because Truck Drivers are not deemed to be skilled (yet ‘Dog Groomers’, inexplicably, are).

The dairy industry in Southland would collapse if it weren’t for hundreds of Filipino farm workers propping up the farms; yet they also do not qualify for residence because the (critical?) roles they fill are not skilled, despite paying taxes, being hard working and having long-term employment prospects. What they are filling are ‘labour’ shortages. No connection between that and a resident visa.

New Zealand has all sorts of low or semi-skilled occupational shortages and the roles are mostly filled by international students, many of whom have limited work rights of up to 20 hours per week and fulltime during academic holiday time, or are one of the tens of thousands of young Holiday Working Visa holders.

There are some policy (and political) tensions arising in relation to this.

On the one hand you cannot blame the transport companies, café owners, farmers or fruit growers for giving these jobs to ‘foreigners’ when there are no locals available or willing to do the work, but where are the locals?

We have in New Zealand an unemployment rate of 5.3%. As I explain at my seminars these people are largely young, unskilled or low skilled. I suspect also unmotivated.

The obvious question to ask is why are they not filling these roles?

It is a relatively complex situation but in my view the single largest contributor is an unwillingness to tell the unemployed who have low skills to get off their backsides and travel to areas where this work exists. It may not be close to home or family but the alternative is we, as tax payers, fund this choice so many are making.

There is little to no reason (beyond politics) for not giving these – particularly young and healthy people – a choice. Go where the work is or the tax payer will stop depositing an unemployment cheque in your bank account every week.

Too often we hear the whining of these people about the costs of going to some other part of the country for ‘low wages’.

Well, if it is okay for all those young Germans, Spanish, British, Singaporean, Malaysian, Brazilians and tens of thousands of other youngsters to do these jobs while travelling around the country, why do we expect any less of our own?

My own youngest son is now studying at the University of Otago in Dunedin. He trained as a Barista and worked all through last summer north of Auckland in a café to garner experience to bolster his employability once he got down to the South Island. He cannot find a job yet the cafes are full of Holiday Working Visa holders doing jobs he could be doing to support himself (and save me from footing the bill).

New Zealanders are starting to ask the question – should tens of thousands of young foreigners get these jobs ahead of young New Zealanders if the New Zealanders want them? Should Holiday Working Visa policy be a substitute for forcing the young and unemployed of New Zealand to get off their backsides and take up these jobs?

Given we require all those applying for ‘typical’ work visas on their pathway to a resident visa to prove they are not taking a job away from a New Zealander, are Holiday Working Visas a convenient excuse for employers locally to not be bothered trying to fill the vacancies with our own young job seekers?

I am all for young people coming into the country and having that local working experience while they travel around enjoying everything this wonderful country has to offer. We are all enriched by it culturally, if not economically, and these young people build bridges to the rest of the world. Some will use the Holiday Working Visa as a stepping stone to filling skilled roles and go on to secure residence. I often help skilled migrants return to New Zealand ten or more years after they spent a happy year on one of those Holiday Working Visas and we would never have been able to get the benefit of their skills had they not enjoyed their earlier trip.

I have some concerns however that successive Governments have lacked the political will to start forcing the more indolent among the local population to take up these jobs first.

Our own should be forced into these jobs or offered them before we offer them to foreigners. If they don’t want them don’t apply or lack the attitude and willingness to learn then by all means offer them to the travelling hordes of youngsters from overseas.

By not doing this, current policy opens the door to the politics of migrant bashing and we are not immune from a (tiny) minority of politicians who will exploit it. With an election next year those voices will get louder sure as the sun will rise on the morrow.

As I wrote last week immigration policy settings are under increasing pressure and the question has to be asked if it is delivering in the overall context of New Zealand’s social, cultural and economic developmental aims.

There is, at the very least, room for improvement.

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