Labour Market Module
SA Business Vision 2010
The labour market in South Australia is shaped by a variety of forces, which, in conjunction with demographic trends, determine the job prospects and living standards of the state's residents. It was the aim of this discussion paper to consider the likely future impacts on the labour market of historical changes in the workforce together with alternative scenarios for SA's future development provided by Blandy, O'Malley & Walsh (2003).
To look forward and make useful projections, we integrated historical data (on employment, skill supply and demand, working hours, and earnings) with three alternative scenarios envisaged by Blandy, O'Malley & Walsh (2003), and our own insights about probable developments and possibilities for change.
Our paper had three main sections. In the first, we examined in detail the past fifteen years of the labour market and discussed where we have been heading. We showed that, among other things, the most significant trends have been:
• zero growth in fulltime employment, with all the net employment growth being in part-time jobs, and rising "under-employment" of the available working age population;
• a shift in employment away from the lowest and trades jobs to associate professional, professional and managerial jobs and intermediate service and production workers;
• a shift away from continuing jobs to contingent employment;
• growth in service jobs (especially business services) and decline in manufacturing, mining and utilities employment.
In section two we considered how the future might break with these patterns, by exploring in greater depth each of Blandy et al's "alternative scenarios". While accepting that population ageing will cause a substantial loss of productive workers (particularly from the more highly skilled areas of the workforce), we argued that, for various reasons, subsequent labour shortages may not be as severe as is elsewhere anticipated. There is great scope for increasing labour supply, even with a decline in the rate of growth (and later the absolute size) of the working age population. In our view, additional labour supply would come from:
• an increase in labour force participation, particularly of older workers and those currently "discouraged" by a lack of jobs, or "marginally attached" to the labour force;
• an increase in labour productivity, as workers access jobs that use their skills;
• a shift in the structure of employment, from lower to higher skill jobs, also resulting in higher productivity - the changing "skills mix" alone could contribute up to $11 billion in extra GSP per year;
• an increase in hours worked, reducing the under-employment of at least 100 thousand workers who currently have involuntary short hours, and;
• a cessation of emigration of the working age population from SA, with the potential for a reversal of this trend if there were abundant jobs (especially better career pathways for young people who see a brighter future for themselves in the Eastern states).
Building on the point about migration flows, the third section of our paper deals explicitly with the question of how to attract more of the annual international migrant stream to settle in South Australia.
Sue Richardson, Josh Healy
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