Who loses the most when a professional labour market is enduring both poor economic conditions and a significant oversupply of labour? As insight into the answer can be obtained from the annual professional employment survey by The Australasian Institute of Mining and Metallurgy (AusIMM). In June 2016, the AusIMM surveyed its members and received responses from 2,472 of them. The break down of respondents by occupation was: geoscience professionals: 40.3% mining engineers: 32.7% met/chem/mat engineers: 15.8% others: 6.9% Of the Australian-based members (who were 81.8% of respondents), 14.1% were unemployed and 6.8% were underemployed. Of the mining engineers who responded to the survey, 12.6% were unemployed, while among metallurgical/chemical/materials engineers the unemployment rate was 11.3%. Unemployment was not distributed evenly across age groups (see the figure below). On the contrary, professionals over the age of 50 had a disproportionately high rate of unemployment. Of the total who were unemployed, 42.4% were long-term unemployed, ie. they had been actively looking for work for more than 12 months. Of the long-term unemployed, two-thirds were aged over 50. See: https://www.ausimmbulletin.com/feature/the-ausimm-professional-employment-survey-2016/ and http://www.ausimmbulletin.com/app/uploads/2015/01/Professional-Employment-Survey-2016-Charts.pdf Unemployment can be damaging at any age, and long-term unemployment can be financially and psychologically corrosive. Many experienced professionals find that their working life over the age of 50 is a period when they can focus on saving to fund their own retirement. Being unemployed, or forced to take lower-skilled, lower-paid employment, impairs their ability to save for the future and heightens the probability that they will need to rely, at least in part, on a government-funded pension in retirement. Every year the Australian Government’s Department of Education and Training (DE&T) updates the Medium and Long-term Strategic Skills List (MLTSSL). Prior to April 2017 this was known as the Skilled Occupation List (SOL). The current application and composition of this list in relation to engineering occupations is described in the News post of 6th August 2017. The DE&T submits the list to the Minister for Immigration and Border Protection, who has the final say over which occupations are included or excluded. The DE&T also maintains a separate list of occupations which are ‘flagged’ for potential future removal from the MLTSSL. Until this year, the first criterion for ‘flagging’ an occupation was when there was emerging evidence of excess supply in the labour market. The ‘flagged’ list consisted of occupations in this category identified by DE&T, as well as occupations which were recommended for removal from the SOL by DE&T, but whose removal was rejected by the Minister for Immigration and Border Protection. In 2017, the first criterion for ‘flagging’ an occupation changed, so that occupations are now 'flagged' when there is emerging evidence of excess supply in the labour market in the medium-to-long term. This is a nonsensical criterion, as there is no way to accurately determine the labour market supply or demand for an individual occupation in the medium-to-long term, which was most recently defined by DE&T as five-to-ten years into the future. The Minister for Immigration and Border Protection still has the final say on which occupations are included on the MLTSSL, and the ‘flagged’ list still includes occupations which the DE&T has recommended should be removed from the MLTSSL, but whose removal has been rejected by the Minister. The table below shows the recent history of engineering Unit Groups which were flagged for removal from the SOL and, for 2017-18, the MLTSSL. Given the enormous increase in the supply:demand ratio for each of these Unit Groups since 2011-12, they should have been removed from the SOL/MLTSSL years ago. As noted in the News post of 7th May 2017, ‘2333 Electrical Engineers’ has never been flagged, which is an unjustifiable situation given that this Unit Group has been among the most heavily oversupplied for several years. The DE&T’s list of ‘flagged’ occupations for 2017-18 is available at: https://www.education.gov.au/flagged-occupations-MLTSSL Note 1: Only ‘233111 Chemical engineer’ has been flagged for removal.
Note 2: ‘2336 Mining Engineers’ was removed from the SOL for 2016-17. Note 3: ‘2336 Mining Engineers’ was excluded from the MLTSSL for independent and family nominated migrants, and for State and Territory Government nominations. However, this Unit Group was included on the MLTSSL for employer nominations for permanent and temporary visas. Note 4: One occupation in this Unit Group, namely ‘233999 Engineering professionals (not elsewhere classified)’ was excluded from the MLTSSL for independent and family nominated migrants, and for State and Territory Government nominations. However, this occupation was included on the MLTSSL for employer nominations for permanent and temporary visas. As described in the News post of 8 July 2017, the Federal Government now maintains three different versions of the Medium and Long-term Strategic Skills List (MLTSSL) and the Short-term Skilled Occupation List (STSOL). There is a fourth version for a training visa, but this is not considered here.
This use of several different versions of the lists has complicated the understanding of how they are used, while potentially providing the Government with the flexibility to remove occupations from one version while keeping them on the others. In the case of the 21 occupations in the ANZSCO Minor Group ‘233 Engineering Professionals’, none are listed on any version of the STSOL, indicating that the Government does not think there is any current or near term shortage of engineers. Rather, 18 of 21 engineering occupations are on the Medium and Long-term Strategic Skills List (MLTSSL) that applies to independent and family nominated migrants, as well as to migrants nominated by State and Territory Governments. All 21 engineering occupations are on the MLTSSL for employer nominated permanent and temporary visas. The Government uses its ‘stockpiling theory’ to justify the inclusion of oversupplied engineering occupations on the various versions of the MLTSSL (see pages 30 and 31 of the report, and Item 1 under the ‘Corruption’ tab on this website). With the MLTSSL, the strategy is to bring migrants into the country now in case there is an upturn in the labour market, and therefore demand for their skills, in 5-10 years’ time. This is the ‘stockpiling theory’ – that professionals can be brought into a labour market now and still be available to satisfy skills shortages in 5-10 years’ time regardless of whether or not they are able to secure employment in their occupation in the meantime. In the vastly oversupplied engineering labour market, some of these migrants are placed into jobs ahead of Australian jobseekers, and the Australian engineers are then also faced with the daunting prospect of trying to return to the engineering labour market after a prolonged, enforced absence. Employers are ruthless in their selection of recruits, and an absence of two years or more makes a return to engineering very difficult. This reality of employer recruitment practices is acknowledged by the Productivity Commission, the Australian Human Rights Commission, and Engineers Australia. It is supported by data collected by the Australian Bureau of Statistics. In April 2017 the Federal Government announced changes to the subclass 457 visa, and its eventual replacement by the Temporary Skills Shortage (TSS) visa, to be completed in March 2018. One of the big selling points of the changes was that employers would be required to undertake market testing before any subclass 457 or TSS visa could be granted to a migrant. Market testing requires employers to ‘test’ the market to see if any suitable Australian candidates can be found, and only if no local candidates are available can a migrant be granted a visa and working rights. At the same time, in a partial acknowledgment of the oversupply of the engineering labour market, the following engineering occupations were excluded from employer and State and Territory Government visa nominations (see News post of 24 April 2017). These were, and still are, among the most heavily oversupplied engineering occupations: 233111 Chemical engineer 233112 Materials engineer 233411 Electronics engineer 233511 Industrial engineer 233513 Production or plant engineer 233612 Petroleum engineer. These occupations were therefore only available on the MLTSSL for independent and family nominated visas. The Government announcements about 457 visas led to well-publicised and furious lobbying from vested interests, with the result that the Government openly stated that it was prepared to reconsider aspects of its changes. Now it turns out that not all occupations will be subject to labour market testing under the subclass 457/TSS visa regime. The Government recently published its list of those occupations for which labour market testing is required: https://www.border.gov.au/visas/Pages/general-guide-to-457-programme-occupations-which-are-not-exempt-from-labour-market-testing.aspx. Those not on the list are exempt from labour market testing. Fourteen of the 21 engineering occupations are on the list, and therefore require employers to undertake market testing for any vacancies. The following seven engineering occupations are not on the list, and are thus exempt from market testing: 233111 Chemical engineer 233112 Materials engineer 233213 Quantity surveyor 233411 Electronics engineer 233511 Industrial engineer 233513 Production or plant engineer 233612 Petroleum engineer. The six engineering occupations which were excluded from employer and State and Territory Government nominations in mid-April 2017 because they are oversupplied are now available for visa nominations from these sources. Furthermore, employers who wish to bring in migrant engineers in one of these occupations on a four year 457 visa can do so without any labour market testing. This is clear evidence that the skilled migration program is not driven by labour market conditions but, in this case, by the lobbying of vested interests. Australian engineering jobseekers continue to be treated like cannon fodder. |
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November 2018
CategoriesAuthorJim Oakley |