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WA's labour market in dire straits ahead of national Jobs and Skills Summit

Australia has the second worst labour shortage in the world behind Canada, according to June OECD figures, and it's arguably the hardest to find workers in Western Australia.

Retail workers, general admin clerks, and nurses are the most advertised positions across the country.

It's the same in WA, but things look a little different beyond the top three.

Metal fitters, mechanics and electricians are the next most advertised occupations in the state.

But these figures don't paint the whole picture.

More than four out of five businesses indicated they were struggling to find workers, the June Business Confidence report from the Chamber of Commerce and Industry WA (CCIWA) revealed.

Among them, resources, retail and agriculture businesses were most likely to report skills shortages as an issue.

Health and medical workers are also in high demand, making up 46 of the 106 recent additions to the state's skilled migration occupation list.

Despite the skills crisis, only seven of the 146 attendees at the national Jobs and Skills Summit will be from WA.

WA resilience now a challenge

Western Australia walled itself off for much of the past two and a half years, allowing it to fend off early waves of the COVID-19 pandemic.

The state's economy continued to grow, but with a sealed border, it had cut off its access to workers.

Bankwest Curtin Economics Centre Director Alan Duncan will be one of the seven West Australians with a seat at the summit table. 

He said WA's resilience through COVID-19 had created the country's tightest labour market.

"The state is facing, probably, higher challenges in filling vacant positions than any other state in the country," he said.

How do we fix the labour shortage?

"One of the missing parts of the story for me is around productivity, and how we drive productivity gains," Professor Duncan said.

Instead of just trying to get more workers to fix the skills shortage, he argued we should invest more in upskilling our workers.

The Committee for Perth identified a "skills mismatch" among recent graduates as a significant issue in its Race to the Top report analysing WA's workforce.

"There remains a sizeable proportion of the labour market working in jobs that do not match their skills and education," the report found.

In a Conversation article that surveyed 50 leading Australian economists on fixing the skills shortage, the consensus was that addressing education and skills would bear the most fruit.

But education and training take time, and having a skills shortage 'crisis' would imply a lack of said time.

Luring workers to WA

The state government has been trying to tempt interstate and overseas workers with a slew of temporary initiatives as a more immediate measure.

It's now cheaper to apply for a skilled migrant visa, and there's less red tape involved with reduced requirements for work experience, language and funds.

But even if every one of the state's 8,140 skilled migration placements were filled, it's only a drop in the bucket.

In the mining and resources sector alone, the Chamber of Minerals and Energy WA last year reported a potential shortage of up to 40,000 workers by mid-2023.

That's just one sector, and the labour market has only tightened since.

Professor Duncan said he expected the Jobs and Skills Summit to have a strong focus on migration, and said it was important that it did.

But he and other leading economists around the country agreed that fixing the skills shortage wasn't as simple as throwing more bodies at the issue.

Latent labour, and changing jobs

Accessing the under-utilised areas of WA's workforce could work, but may be difficult too.

It's harder to find people in WA that want to work more, or in a higher skilled job, than most of Australia.

The underemployment rate in WA is 5.4 per cent, compared to the national figure of 6 per cent.

But even if you don't want to work more, if you've ever wanted to change your career, this may be the time to do it.

The Committee for Perth found greater labour mobility, or the number of people moving across different occupations, would be key to addressing future workforce demands.

There is no single or simple fix to the labour crisis, which the Jobs and Skills Summit hopes to address.

Despite WA having played a critical role in keeping Australia's economy afloat throughout the pandemic, the state will have a relatively small representation at the summit.

"Whilst the Western Australian labour market has done well, that has brought some really significant challenges when it comes to the shortage of skills."

Professor Duncan, who will be one of the attendees, is hoping for a holistic agenda.

"I don't want to see the oxygen of the summit taken up with very specific measures [like] what the size of the migration cap should be," he said.

"My wish is that the summit lays out a really coherent and full agenda to respond to the challenges that we're facing ... not just now, but into the future."

He said addressing the cost of childcare, gender barriers to employment, and housing shortages, all need to be considered.

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