tag:theconversation.com,2011:/au/topics/skilled-labour-2874/articlesSkilled labour – The Conversation2024-01-18T20:47:15Ztag:theconversation.com,2011:article/2205272024-01-18T20:47:15Z2024-01-18T20:47:15ZEmployers should use skill-based hiring to find hidden talent and address labour challenges<figure><img src="https://images.theconversation.com/files/568966/original/file-20240111-21-gkyv31.jpg?ixlib=rb-1.1.0&rect=62%2C26%2C5928%2C3961&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Employers can address qualification inflation by implementing skill-based recruitment and selection practices.</span> <span class="attribution"><span class="source">(Shutterstock)</span></span></figcaption></figure><iframe style="width: 100%; height: 100px; border: none; position: relative; z-index: 1;" allowtransparency="" allow="clipboard-read; clipboard-write" src="https://narrations.ad-auris.com/widget/the-conversation-canada/employers-should-use-skill-based-hiring-to-find-hidden-talent-and-address-labour-challenges" width="100%" height="400"></iframe>
<p>A concerning trend known as qualification inflation has been plaguing hiring practices for years. Qualification inflation — also known as degree inflation — refers to the growing number of employers requiring degrees and extensive experience for jobs.</p>
<p>As highlighted in a <a href="https://www.hbs.edu/managing-the-future-of-work/Documents/dismissed-by-degrees.pdf">2017 Harvard study</a>, job listings now often demand that applicants have degrees and experiences that were previously unnecessary, with some job requirements even surpassing the qualifications of current employees.</p>
<p>Of the 11.6 million jobs created between 2010 and 2016, three out of four required a bachelor’s degree or higher, and one out of every 100 required a high school diploma or less.</p>
<p>This qualification inflation increases employer costs through longer recruitment times and wage premiums, and makes it more difficult to create diverse workplaces, <a href="https://www.hbs.edu/managing-the-future-of-work/Documents/research/hiddenworkers09032021.pdf">another Harvard study</a> found. This study showed that marginalized people, women and younger people were less likely to have the required degrees and experience. </p>
<p>In addition, <a href="https://hbr.org/2014/08/why-women-dont-apply-for-jobs-unless-theyre-100-qualified">women are less likely to apply</a> for jobs if they don’t have all of the listed qualifications. Because of this, having unnecessary requirements may disproportionately discourage them from applying to jobs.</p>
<p>The origins of qualification inflation can be traced back to the rise of online application platforms and <a href="https://hbr.org/2022/02/skills-based-hiring-is-on-the-rise">the 2008-09 financial crisis</a>, both of which resulted in larger job applicant pools. Economic and <a href="https://www.hbs.edu/managing-the-future-of-work/Documents/research/hiddenworkers09032021.pdf">technological shifts</a> have also given rise to new roles that require unique skills. </p>
<p>Some employers adapted to these changes by adding qualifications to job listings without removing outdated ones, leading to qualification inflation. While this has been an ongoing issue for years, it is becoming increasingly urgent as <a href="https://www150.statcan.gc.ca/n1/pub/11-621-m/11-621-m2023009-eng.htm">many Canadian businesses are reportedly grappling with</a> recruitment and retention challenges.</p>
<h2>Job analysis and advertising</h2>
<p>There are ways for employers to address qualification inflation, namely by implementing skill-based recruitment and selection practices to hire qualified and diverse employees. To begin with, organizations should conduct thorough job analyses before posting listings by determining a job’s core skills and characteristics.</p>
<p>Open-source resources like <a href="https://www.onetonline.org/">the Occupational Information Network</a> and <a href="https://noc.esdc.gc.ca/">the National Occupational Classification</a> can provide a good starting point for companies. However, manager and employee involvement is also necessary to ensure jobs are aligned with organizational needs.</p>
<figure class="align-center ">
<img alt="A magnifying glass hovering over a newspaper page that says 'Jobs Wanted.'" src="https://images.theconversation.com/files/569674/original/file-20240116-15-rv23m2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/569674/original/file-20240116-15-rv23m2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/569674/original/file-20240116-15-rv23m2.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/569674/original/file-20240116-15-rv23m2.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/569674/original/file-20240116-15-rv23m2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/569674/original/file-20240116-15-rv23m2.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/569674/original/file-20240116-15-rv23m2.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Organizations should conduct thorough job analyses before posting listings by determining a job’s core skills and characteristics.</span>
<span class="attribution"><span class="source">(Shutterstock)</span></span>
</figcaption>
</figure>
<p>To create a compelling job advertisement that also incorporates accurate skill and qualification needs from job analyses, <a href="https://doi.org/10.1007/s10869-014-9353-x">our research</a> shows that ads should explain how the job will meet applicants’ psychological needs (autonomy, variety and purpose). </p>
<p>We also recommend job postings state that applicants will be considered if they have transferable skills from different job families or industries. Providing a list of example job titles with potentially transferable skills is a helpful addition.</p>
<h2>Skill-based screening</h2>
<p>Another way employers can address qualification inflation is by using skill-based screening. These assessments are designed to evaluate the skills of a job applicant to determine if they are the right fit for a role.</p>
<p>Asking applicants to self-report their proficiency levels for certain skills during the application process is one screening approach employers can take, but it should be managed cautiously. As <a href="https://doi.org/10.1007/s10869-022-09847-7">our research shows</a>, some applicants may exaggerate their skill level if they are in the midst of a lengthy job search.</p>
<p>We found that applicants inflated their self-assessments of behavioural skills (e.g., customer service) compared to technical skills (e.g., programming) because behavioural skills can be difficult to verify. Because of this, focusing self-reports on technical skills may mitigate applicant exaggeration and help identify talented applicants without degrees.</p>
<figure class="align-center ">
<img alt="A person holds two resumes up beside one another" src="https://images.theconversation.com/files/569671/original/file-20240116-17-67v872.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/569671/original/file-20240116-17-67v872.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/569671/original/file-20240116-17-67v872.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/569671/original/file-20240116-17-67v872.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/569671/original/file-20240116-17-67v872.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/569671/original/file-20240116-17-67v872.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/569671/original/file-20240116-17-67v872.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Skill-based assessments are designed to evaluate the skills of an applicant to determine if they are the right fit for a role.</span>
<span class="attribution"><span class="source">(Shutterstock)</span></span>
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<p><a href="https://doi.org/10.1037/apl0000463">Our research</a> also shows that overclaiming assessments — a type of questionnaire that asks applicants to rate their familiarity with both real and fictitious skills — can identify applicants who are faking responses, as well as those who are providing more accurate self-assessments.</p>
<p>Forced-choice competency and skill assessments, which usually require applicants to rank equally-desirable statements about their job-relevant skills, <a href="https://doi.org/10.1037/apl0001099">can also reduce faking and exaggeration</a>.</p>
<h2>Skill-based hiring</h2>
<p>After identifying a shortlist of qualified applicants, employers can then use more in-depth assessments. The first type of assessments are job knowledge or skill tests. Many off-the-shelf tests have been developed for a wide variety of technical skills, ranging from knowledge of Microsoft Word to contract law.</p>
<p><a href="https://doi.org/10.1037/apl0000994">Research shows that work sample assessments</a> — providing applicants with a sample of the actual work performed on the job — are one of the most valid selection procedures. However, employers should ensure assessments are not too time-consuming so applicants don’t feel like they’re doing free work for the company.</p>
<p>Personality assessments can provide a more holistic picture of the applicant. Validated, forced-choice personality assessments can reduce applicant faking or exaggeration, which is a significant concern when applicants are responding to a personality assessment for a job they really want.</p>
<p>Finally, structured interviews, where the same set of job-relevant questions are posed to each candidate and detailed scoring guides allow interviewers to reliably assess candidate responses, can provide valid information about the candidate’s skills. </p>
<p>Interviews are probably <a href="https://doi.org/10.1037/0021-9010.86.5.897">best suited to evaluate behavioural skills</a>. If an interviewer has already used some of the technical skill assessments suggested in this piece, they can devote most of the interview to assessing an applicant’s behavioural and social competencies.</p>
<p>Skill-based hiring can help address problems associated with qualification inflation, while revealing previously hidden talent and providing diverse applicants with access to quality jobs that were once out of reach.</p><img src="https://counter.theconversation.com/content/220527/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Joseph Schmidt receives funding from the Social Sciences and Humanities Research Council of Canada. </span></em></p><p class="fine-print"><em><span>Joshua Bourdage receives funding from the Social Sciences and Humanities Research Council of Canada. </span></em></p>Job listings now often demand that applicants have degrees and experiences that were previously unnecessary, with some job requirements even surpassing the qualifications of current employees.Joseph Schmidt, Professor of Human Resources and Organizational Behaviour, University of SaskatchewanJoshua Bourdage, Associate Professor, Department of Psychology, University of CalgaryLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1902052022-09-26T19:37:43Z2022-09-26T19:37:43ZCanada needs to encourage more youths to pursue skilled trade jobs<figure><img src="https://images.theconversation.com/files/484432/original/file-20220913-4062-4ytg9a.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C7951%2C5285&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Students are being urged to enter the skilled trades as the industry faces labour shortages.</span> <span class="attribution"><span class="source">(Shutterstock)</span></span></figcaption></figure><iframe style="width: 100%; height: 100px; border: none; position: relative; z-index: 1;" allowtransparency="" allow="clipboard-read; clipboard-write" src="https://narrations.ad-auris.com/widget/the-conversation-canada/canada-needs-to-encourage-more-youths-to-pursue-skilled-trade-jobs" width="100%" height="400"></iframe>
<p>You may have noticed lately that it can take weeks to book a technician to look at your furnace, or that scheduling an appointment to fix your car means waiting longer than you’re used to. </p>
<p>These are tangible signs that we are experiencing <a href="https://www.cbc.ca/news/canada/ottawa/students-urged-to-go-into-trades-as-industry-faces-labour-shortage-1.6165774">a shortage of skilled tradespeople</a> — a problem that is set to worsen unless it is addressed immediately.</p>
<p>It’s easy to overlook the importance of skilled trade jobs. Unless someone works in trades, or knows someone who does, the reason why there are fewer plumbers still working might not be so obvious — that is, until the faucet starts leaking or a pipe bursts.</p>
<p>We rely on tradespeople to keep our utilities running, fix our appliances, build and maintain our roads and many other things that are central to our everyday lives. Among the many issues contributing to the crisis in the travel industry, for example, is a shortage of <a href="https://www.reuters.com/business/aerospace-defense/aviation-sector-faces-hiring-headache-mechanics-shortage-looms-2022-07-15/">pilots and mechanics</a>.</p>
<h2>Recovering from COVID-19</h2>
<p>More insidious and threatening than longer wait times is the corrosive impact the trade shortage is having on businesses. Many are not only struggling to grow without an adequate number of workers, but are also finding it hard just to keep up with demand.</p>
<p>An <a href="https://cme-mec.ca/initiatives/2021-business-outlook-and-labour-skills-survey/">October survey of 445 companies by Canadian Manufacturers and Exporters</a> found that the worker shortage has significantly impeded the trade sector’s recovery from COVID-19. </p>
<p>Forty-two per cent of respondents reported their companies had lost or turned down contracts, or paid late delivery penalties because of a lack of workers. About 17 per cent of respondents said that their company was considering moving outside of Canada to find workers. Seventy-seven per cent of companies said attracting and retaining quality workers was their biggest concern.</p>
<p>The scarcer tradespeople become, the harder it will be to keep things running, and <a href="https://betterdwelling.com/canada-faces-a-huge-trade-worker-shortage-and-its-going-to-cost-you-more/">the more expensive it is to pay for their work when we can find them</a>. Those issues, in turn, make it harder to attract businesses to Ontario and Canada.</p>
<h2>Trade worker shortage</h2>
<p>In part, the shortage is a matter of demographics. The baby boomers who built, fixed, maintained, baked and helped keep communities functioning <a href="https://www.cbc.ca/radio/costofliving/speaking-out-from-the-ceo-s-office-starbucks-and-spending-by-seniors-1.5429339/ok-boomer-the-future-for-canada-s-soon-to-retire-demographic-1.5429640">are retiring</a>, and there are more waves of retirement to come in the years ahead. BuildForce Canada projects that, by 2027, <a href="https://www.buildforce.ca/en/terms">approximately 13 per cent of the construction sector will reach retirement age</a>.</p>
<p>The problem isn’t just that these workers are retiring, <a href="https://www.hrreporter.com/focus-areas/recruitment-and-staffing/3-in-4-canadians-say-theyd-never-pursue-career-in-skilled-trades/368190">but that they are not being replaced</a>. The <a href="https://globalnews.ca/news/8815809/construction-retirement-homebuiliding/">stigma that has developed around being a tradesperson</a> is one reason why this is.</p>
<figure class="align-center ">
<img alt="A woman fixing a sink in a bathroom." src="https://images.theconversation.com/files/484430/original/file-20220913-4004-jl9ts0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/484430/original/file-20220913-4004-jl9ts0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/484430/original/file-20220913-4004-jl9ts0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/484430/original/file-20220913-4004-jl9ts0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/484430/original/file-20220913-4004-jl9ts0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/484430/original/file-20220913-4004-jl9ts0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/484430/original/file-20220913-4004-jl9ts0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">It’s possible to be successful and entrepreneurial as a tradesperson.</span>
<span class="attribution"><span class="source">(Shutterstock)</span></span>
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<p>Even though many skilled tradespeople can <a href="https://www150.statcan.gc.ca/n1/pub/11-627-m/11-627-m2022002-eng.htm">make far more money than many so-called professionals</a>, most children grow up seeing university as the best, most respectable post-secondary option, and community colleges and trade schools are viewed as second-tier fallbacks. </p>
<p>Immigration — a potential source of new tradespeople — is not making up the gap, either. There are <a href="https://www.theglobeandmail.com/canada/article-for-many-newcomers-canadian-experience-remains-a-barrier-to-meaningful/">barriers that prevent newcomers from taking up the trades</a> they learned in their home countries and practising them in Canada.</p>
<p>In addition, as the supply of tradespeople continues to shrink, the next generation of tradespeople will find it more difficult to line up apprenticeships because there will be fewer mentors available to train them.</p>
<h2>Closing the gap</h2>
<p>Fortunately, there are some tactics that can help fix the current shortage of tradespeople. These strategies include:</p>
<ul>
<li><p>Removing obstacles to women and minorities entering the trades, including fostering workplace cultures that welcome them and help them to adapt. </p></li>
<li><p>Providing more hands-on learning, starting earlier in life, to foster interest in the trades and demonstrate how it is possible to be successful and entrepreneurial as a tradesperson.</p></li>
<li><p>Highlighting role models to show how rewarding a career in the trades can be. </p></li>
</ul>
<p>Ontario, through its <a href="https://www.ontario.ca/page/skills-development-fund">Skills Development Fund</a>, has committed <a href="https://www.canada.ca/en/employment-social-development/news/2022/07/government-of-canada-invests-to-help-canadians-enter-skilled-trades.html">$200 million to connect job seekers with the skills and training</a> they require for well-paying jobs. Much of this fund focuses on the skilled trades by supporting pre-apprenticeship training programs. </p>
<p>As employment researchers, we studied one such program, the <a href="https://toolsinthetrades.ca/">Tools in the Trades Bootcamp</a>, presented by Support Ontario Youth <a href="https://news.ontario.ca/en/release/1000339/ontario-helping-youth-explore-careers-in-the-skilled-trades">on behalf of the Ontario Ministry of Labour, Training and Skills Development</a>.</p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1569744212362686465"}"></div></p>
<p><a href="https://www.supportontarioyouth.ca/insight/support-ontario-youth-tools-in-the-trades-bootcamp-report/">The program featured</a> 59 intensive, one-day bootcamp sessions across Ontario from September 2021 until March 2022. It included 46 sessions for high school students and 13 for targeted adults, focusing on trades in construction, industry, service and transportation. </p>
<p>Participants reported an improved appreciation for working in the trades, and a heightened intention of pursuing a career in the field. They also established new contacts with peers of similar interests, potential mentors and prospective employers.</p>
<p>While our analysis shows promising outcomes to combat the shortages in skilled trades, these bootcamps are only the start of addressing the issue. More initiatives and programs, both provincially and federally, and from both public and private sectors, are needed to educate and reduce barriers for individuals entering the skilled trades.</p><img src="https://counter.theconversation.com/content/190205/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Mojan Naisani Samani has previously received funding from the Ontario government and McMaster University. She has been contracted by the Support Ontario Youth (SOY) to undertake an independent evaluation of the Tools in the Trades Bootcamps, a program funded by the Ontario Ministry of Labour, Training and Skills Development.</span></em></p><p class="fine-print"><em><span>Rick Hackett receives funding from Support Ontario Youth (SOY), as provided by the Skills Development Fund, Ontario Ministry of Labour, Training and Skills Development.</span></em></p>Canada is facing a critical shortage of skilled tradespeople, only doomed to get worse with retirement rates. Our only hope is to attract more workers before it’s too late.Mojan Naisani Samani, PhD Candidate, DeGroote School of Business, McMaster UniversityRick Hackett, Canada Research Chair, Organizational Behaviour & Human Performance, McMaster UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1090942018-12-19T19:06:29Z2018-12-19T19:06:29ZUK’s new post-Brexit immigration plan is surreal and cynical<p>The publication of the British government’s <a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/766465/The-UKs-future-skills-based-immigration-system-print-ready.pdf">white paper</a> for a post-Brexit immigration system is long overdue. But coming so late in the day, with such uncertainty continuing about what Brexit will look like, much of what’s being proposed feels quite surreal.</p>
<p>The UK’s immigration system is currently a malfunctioning mess. It’s overly complicated, opaque and weighed down with political and social expectations that cannot be met. It’s been <a href="https://publications.parliament.uk/pa/ld201617/ldselect/ldeucom/82/82.pdf">consistently castigated</a> by senior legal figures for being so labyrinthine that even immigration lawyers have difficulty navigating it. It’s expensive, intrusive, and places unreasonable burdens on citizens, including landlords, health service workers and lecturers, to act as if they were <a href="https://theconversation.com/compliant-environment-turning-ordinary-people-into-border-guards-should-concern-everyone-in-the-uk-107066">employed as border guards</a>. The current system can also end up <a href="http://www.irr.org.uk/news/the-windrush-scandal-exposes-the-dangers-of-scaremongering-about-illegal-immigrants/">unfairly discriminating</a> by ethnicity. </p>
<p>Many of these shortcomings are acknowledged in the Home Office’s white paper, and the potential clarity the eventual publication of this document brings to the debate on the UK’s future immigration policy is welcome. </p>
<p>In the immediate aftermath of the white paper’s publication, much was made of the absence of a numerical target <a href="https://www.reuters.com/article/us-britain-eu-immigration-javid/uks-post-brexit-immigration-system-will-not-include-net-migration-target-idUSKBN1OI0OI">for net migration</a>. But this is a red herring. The target has been politically dead in the water since before the 2016 referendum. </p>
<h2>Devil in the detail</h2>
<p>There are other, rather more fundamental changes in the government’s new plans for both migrants and employers. The resident labour market test will be scrapped, meaning employers can recruit directly from outside the UK without having to advertise in the UK first. Migrants on “skilled-employment” visas will also be able to stay for five years, and bring dependants with them. A system of new temporary visas will be created that are not tied to a single employer, enabling migrants to move between employers in precarious and flexible sectors of the labour market. At the same time, these temporary migrants will be prevented from renewing their status or continuing their employment even if they and their employers would prefer it. </p>
<p>What happens to these proposals as they are consulted on, translated into legislation, and then into guidance and Home Office practices will be key. </p>
<p>In UK immigration policy, the devil is always in the detail. Restrictions often become clear in the non-legislative detail of immigration paperwork and key questions must await those technical documents. How high will the health service fee be for migrants on temporary visas? What will the level of the <a href="https://www.gov.uk/uk-visa-sponsorship-employers/immigration-skills-charge">“skills charge</a>” be to employers? What checks on prospective qualifications of employees will employers have to make in order to employ someone on a skilled visa?</p>
<p>Nonetheless, the policy outlined in the new white paper has three striking characteristics that shed light on its overall weaknesses. It is in turns, rather surreal, cynical and in places, potentially quite sinister.</p>
<h2>Problems with an earnings threshold</h2>
<p>There is much weight given within the white paper to the <a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/718237/EU_Settlement_Scheme_SOI_June_2018.pdf">settlement scheme</a> for EU citizens currently living in the UK that will be in place until the end of the Brexit “implementation period” in December 2020. Yet without parliament’s approval of the Brexit withdrawal agreement, which includes a reciprocal arrangement with the EU on the rights of citizens, the political basis for that scheme is void. That means the proposals in the white paper might be dead by March if there is a no-deal Brexit – at least as far as EU citizens are concerned.</p>
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Read more:
<a href="https://theconversation.com/brexit-draft-withdrawal-agreement-experts-react-107027">Brexit draft withdrawal agreement – experts react</a>
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<p>Much is made in the white paper of the “skills” basis for the new immigration system. Yet the skilled employment route has two problems. First, it’s likely such a route will be tied to an earnings threshold. The government will consult on a proposal, <a href="https://www.gov.uk/government/publications/migration-advisory-committee-mac-report-eea-migration">made by the independent Migration Advisory Committee</a> (MAC) in September, to set that threshold at £30,000 a year, just above median earnings. This is politically contentious as there are many skilled workers who earn well below this. Second, it treats “skilled employment” as if this is an objectively measurable attribute – it isn’t. </p>
<p>The policy proposals are also pretty cynical. The MAC report found <a href="https://theconversation.com/what-eu-migration-has-done-for-the-uk-103461">little evidence</a> of large effects of migration on employment and wages. Yet it explicitly made reference to such pressures when it proposed keeping the £30,000 per year earnings threshold for skilled employment, arguing that such a high level might encourage employers to pay their skilled workers – librarians, care workers, physiotherapists, teachers – more. For the same reason, it opposed lowering the income threshold for public sector workers, on the grounds that upward pressure on their wages would be a good thing. </p>
<p>Yet, under current public expenditure levels, skilled public sector workers will not have wage increases to match these requirements. In the face of <a href="https://www.theguardian.com/politics/2018/dec/02/cbi-warns-low-skill-visa-cap-carolyn-fairbairn">employer complaints</a>, the government has explicitly invited employers to discuss the rate at which the threshold will be set in a year-long consultation. It’s likely the threshold will go down, directly undermining the MAC’s rationale for having it at all, and continuing to endorse the UK’s low-wage economy. Meanwhile, the <a href="https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/bulletins/genderpaygapintheuk/2018">gender pay gap</a>, and the differential treatment of skills in typically male and female employment, means that women migrants are less likely to meet whichever threshold is set. </p>
<h2>Selecting ‘immigrants’</h2>
<p>One of the rather understated, but politically telling, elements of the Home Office’s plans is that they permit two possible divergences from the new employment visa regimes they are proposing. First, new trade agreements after Brexit may open new routes for migrants from preferred countries and the UK will <a href="https://theconversation.com/how-the-special-migration-rules-in-free-trade-deals-work-103709">trade access to its labour market</a> for those willing to do a deal. Yet it’s unclear how this constitutes “taking back control”, being open, or having a skills-led immigration policy.</p>
<p>The second, is that immigration policy may diverge in future if more immigration routes are closed on the basis of “risk”. “Low-risk nationalities” and “low-risk countries” will have access to the UK. Migrants – however skilled – that do not conform to this “risk” assessment are always vulnerable to exclusion. “Risks” can be defined in many ways and give governments wide powers to select which countries the skilled migrants may come from. And the government is specifically proposing to automate such assessments. This opens the possibility for a return to the outright discriminatory and racist immigration policy of the past. </p>
<p>Overall, the timing of the white paper’s publication is surreal, it presents proposals that rather cynically reproduce existing inequalities in the UK’s precarious labour market and its casts a rather sinister light on how the government thinks about selecting “immigrants” after Brexit.</p><img src="https://counter.theconversation.com/content/109094/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Emma Carmel received funding from the Economic and Social Research Council and European Union for a research project, TRANSWEL, completed in July 2018.</span></em></p>The British government’s immigration plans may be long-awaited, but they have not come at a good time.Emma Carmel, Senior Lecturer, Department of Social and Policy Sciences, University of BathLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/785652017-06-01T08:59:57Z2017-06-01T08:59:57ZYoung people are right to feel hard done by – pay discrimination for under 25s is legal<figure><img src="https://images.theconversation.com/files/171688/original/file-20170531-25664-o8qzvo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Young people don't have a right to equal pay. </span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/duncan/7645920232/sizes/l">duncan/flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc/4.0/">CC BY-NC</a></span></figcaption></figure><p>Many of the university students graduating in the coming months are likely to feel short-changed when they start looking for jobs. Until they reach their 25th birthdays, and regardless of their qualifications, the minimum hourly rate they can be paid is £7.05 gross. That is 45p an hour less than the absolute minimum payable to someone 25-years-old and over, for the same job. The rates are even lower for those under 21 and under 18. </p>
<p>This is because the <a href="http://www.legislation.gov.uk/ukpga/2010/15/schedule/9">law</a> allows age discrimination in minimum wages – but only for the low-paid. The exemption doesn’t apply if the person is earning over the National Living Wage (NLW) – introduced by the Conservatives in 2016. Yet, <a href="https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/604442/A_rising_floor_-_the_latest_evidence_on_the_National_Living_Wage_and_youth_rates_of_the_minimum_wage.pdf">as of April 2017</a>, 8.5% of the workforce is on one of the minimum rates. </p>
<p>A National Minimum Wage was introduced in 1998 by the Labour government to fulfil a <a href="http://www.politicsresources.net/area/uk/man/lab97.htm">manifesto pledge</a> to tackle low pay and poverty. From the outset, distinctions were made for rates for apprentices, but the adult rate applied to those over 21 and not in full-time education.</p>
<p>When, in the face of a mounting campaign for a higher living wage, the Conservative government introduced the NLW in 2016, it decided to exclude under 25-year-olds and create a new age band for 21-24 year olds. Those over 25 saw an increase of 4.3% in the minimum wage while under 25s saw 3.2%. The NLW is a <a href="https://www.gov.uk/government/news/summer-budget-2015-key-announcements">commitment</a> to phase in a significant wage increase for those above 25 with a target of £9 an hour by 2020. </p>
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<h2>Where the parties stand</h2>
<p>Three of the main parties have picked up the issue in their election campaigning. The <a href="http://www.labour.org.uk/index.php/manifesto2017/fair-deal-at-work">Labour Party manifesto</a> promises to raise the minimum wage to the level of the NLW for all workers over 18. The <a href="https://www.greenparty.org.uk/green-guarantee/our-promise-to-young-people.html">Green Party</a> will proceed by scrapping age-related wage bands and raising the national minimum wage to living wage levels for all. The <a href="https://www.snp.org/manifesto">Scottish National Party</a> manifesto is the most far-reaching and supports the Real Living Wage of <a href="https://www.livingwage.org.uk/what-is-the-living-wage">£8.45</a> for all adults over 18. </p>
<p><a href="http://www.libdems.org.uk/liberal-democrats-manifesto-2017-general-election-launch">The Liberal Democrats manifesto</a> vows to promote the adoption of the living wage but is silent on the exclusion of under-25s from it. <a href="https://www.conservatives.com/manifesto">The Conservatives</a> have pledged to increase the NLW to 60% of median earnings by 2020 and thereafter by the rate of median earnings – but there is no proposal to include under-25s. <a href="http://www.ukip.org/manifesto2017">The UKIP Manifesto</a> says it will enforce the living and national wages and increase the number of minimum wage inspectors. It says nothing about the under-25 exclusion. </p>
<h2>Is the discrimination justified?</h2>
<p>Although it has not yet faced a legal challenge, the under-25 exclusion could yet be challenged in court for unjustified age discrimination. An EU <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32000L0078:en:HTML">equality directive</a> on this issue is still applicable while the UK remains part of the EU. It allows countries to legislate for age discrimination, but only where the discrimination fulfils a legitimate aim. Justification of discrimination must be specific and based on evidence.</p>
<p>In his July 2015 budget speech, the then-chancellor, George Osborne, gave no reason for the NLW applying only to working people over 25. <a href="https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/482910/BIS-15-481-NMW-interim-evidence-2015.pdf">A government evidence document</a> published that autumn was more specific and justified excluding workers under 25 in “order to maximise the opportunities for younger workers to gain … experience”. </p>
<p>The government receives annual advice about pay from the <a href="https://www.gov.uk/government/organisations/low-pay-commission">Low Pay Commission</a> which considers evidence from the labour market. In its <a href="https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/575634/10583-LPC-National_Living_Wage_WEB.pdf">autumn 2016 report</a>, the commission found that the NLW had started to have an inflationary effect on median pay but that this effect was less pronounced for the under-25s. While noting an increase in employment for the 21 to 25 age group, it said that more younger workers were being hired. It didn’t explicitly say so, but it’s possible that this is because they were cheaper for employers to hire. </p>
<p>Since the Brexit vote, there are already <a href="http://uk.businessinsider.com/indeed-com-fall-eu-citizens-looking-for-work-britain-2017-3">reports</a> of fewer takers for low-pay jobs that had previously been sought by young EU citizens. If this continues, it’s possible that a less crowded labour market may actually remove one of the arguments in favour of a lower minimum rate – because there will be fewer young workers competing for jobs, though this would depend in turn on the state of the economy. </p>
<p>Labour market policy generally and justifications for discrimination specifically must be constantly reviewed in light of changing social conditions. The exclusion does not look cogent and the evidence underpinning it could well change. <a href="https://www.eurofound.europa.eu/sites/default/files/ef1703en.pdf">In Europe,</a> only Greece and the UK draw the line at 25. </p>
<p>Since the election was called, 1.05m 18- to 24-year-olds <a href="http://www.telegraph.co.uk/news/2017/05/19/important-young-people-vote/">have registered to vote</a>. Equal access to the NLW for those among them in low pay or risking it may not be the only issue they consider at the ballot box on June 8, but it may be one of them.</p><img src="https://counter.theconversation.com/content/78565/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Sandhya Drew does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Until you reach 25, employers can pay you less than your older colleagues.Sandhya Drew, Associate Tutor in Public, Employment and Equality Law, University of SurreyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/661732017-02-08T07:39:02Z2017-02-08T07:39:02ZIn debates about migration, we ignore a huge proportion of highly skilled women<figure><img src="https://images.theconversation.com/files/148522/original/image-20161204-25682-14kv22t.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">from www.shutterstock.com</span></span></figcaption></figure><p>Migration is one of the most important factors shaping the world we live in today. In our increasingly mobile society, anxieties about migrants persist in much of the Global North – one only has to look at <a href="https://theconversation.com/global/topics/seven-country-ban-35413">Donald Trump’s visa ban</a> for evidence. </p>
<p>Generally, when we think of the people who leave the developing world to set themselves up in the developed, we think of men. But leaving women out of the picture is a mistake, and it could be leading to a gender brain drain for source countries.</p>
<p>The United Nations Population Division’s statistics show that in 2015, globally, women made up <a href="http://www.un.org/en/development/desa/population/migration/data/estimates2/estimates15.shtml">48% of all international migrants</a>.</p>
<p>Other statistics demonstrate that today women exceed men in international migrant stock in Europe and North America. The <a href="http://www.un.org/en/development/desa/population/migration/data/estimates2/estimates15.shtml">number of female migrants</a> surpasses the number of male migrants in 57 destination countries and in emigration from 80 nations.</p>
<p>Historical statistics reveal that women were also an important part of 19th and 20th century mass migrations. In 1870, women already accounted for 46% of the total US immigrant population, and since the early 1960s, they have <a href="https://www.census.gov/population/www/documentation/twps0081/tables/tab07.xls">outnumbered their male counterparts</a> in the US.</p>
<h2>Putting women in the picture</h2>
<p>Today, scholars have succeeded in bringing women migrants out of the shadows, and placed gender at the centre of the study of transnational migration. </p>
<p>But the picture is still unclear. When they are studied, women migrants are <a href="http://search.proquest.com/docview/1023235138?pq-origsite=gscholar">often depicted</a> as the victims of exploitation and human trafficking, or employed in low-wage, low-skilled jobs. This is no doubt part of the story of women’s migration in the 21st century, but making generalisations based on these characteristics perpetuates the stereotype that women migrants are all low-skilled and uneducated.</p>
<p>A <a href="https://www.msd.govt.nz/documents/about-msd-and-our-work/publications-resources/journals-and-magazines/social-policy-journal/spj32/32-pages-152-180.pdf">recent study</a> found that equal numbers of Chinese and Japanese women and men enter New Zealand under the skilled/business migration category. Women migrants also predominate in flows from the Philippines and Thailand.</p>
<p>On a global scale, a study of 12 OECD countries found that the proportion of female international migrants in highly skilled occupations <a href="http://www.oecd-ilibrary.org/social-issues-migration-health/international-migration-outlook-2006_migr_outlook-2006-en">exceeds 36% in 12 countries</a>. Consistent with this, in 2010, 37% of US foreign-born migrants with science and engineering degrees <a href="https://www.census.gov/prod/2011pubs/acsbr10-06.pdf">were female</a>. </p>
<h2>Ignoring women’s skills</h2>
<p>Eleonore Kofman and Parvati Raghuram have <a href="http://www.sciencedirect.com/science/article/pii/S0016718504000636">identified the main factors</a> behind this gender bias in how we think of migrants.</p>
<p>Our understanding of skilled migration has focused mainly on occupations associated with highly skilled jobs in which migrant men are over-represented, for example in science and technology. The different occupations in which migrant women are over-represented, such as teaching or nursing, are skilled, but not recognised as “high-skilled”. </p>
<p>Much of the research on migrant women employed in the domestic or caring spheres have only paid attention to their low-skilled roles. But often these women are highly qualified, despite working in low-skill jobs. The loss of these qualifications for their countries of origin are thus hidden. </p>
<p>Another overlooked factor is that many women emigrate on family reunification visas. Again, in research we only see their visa categories, and ignore the fact that a significant proportion of women who migrate on these visas are highly skilled and well-educated.</p>
<p>Despite numerous cases studies focusing on individual countries or on specific occupations, the lack of large-scale, reliable and comparable data that is broken down by gender has long <a href="http://onlinelibrary.wiley.com/doi/10.1111/j.1728-4457.2009.00277.x/abstract">prevented a comprehensive assessment of high-skilled migrant women</a>. </p>
<h2>Highly educated women are more likely to move</h2>
<p>My <a href="http://www.iab.de/en/daten/iab-brain-drain-data.aspx">research</a> shows that half of all international tertiary educated immigrants living in the OECD are women. This proportion is much higher in emigration from developed countries (52%) and the Latin America and Caribbean region (53%).</p>
<p>Even in the regions where women are under-represented, they still account for a sizeable proportion of tertiary-educated migrants. In the Arab states and Africa, 44% of migrants with a degree are women. This share has increased strongly over the past three decades in every region of origin. </p>
<p>Globally, the proportion of university-educated women migrants <a href="http://www.iab.de/en/daten/iab-brain-drain-data.aspx">increased by six percentage points between 1980 and 2010</a>. Remarkable increases were observed in Sub-Saharan Africa (12 percentage points), Asia (10), and the Arab states (10). Skilled women are increasingly on the move, and in almost all regions in the world, the growth rate for tertiary-educated women is higher than for tertiary-educated men.</p>
<p>These statistics confirm that highly educated women are the most mobile international migrants. In general, low-educated women are less likely to emigrate than both their male counterparts and tertiary-educated women.</p>
<p>Tertiary-educated women are 1.3 times more likely to emigrate from Sub-Saharan Africa than tertiary-educated men. These findings confirm the conclusion reached by an <a href="http://onlinelibrary.wiley.com/doi/10.1111/j.1728-4457.2009.00277.x/abstract">earlier study</a>, based on a different data set.</p>
<p>A study of UK University graduates that found that female graduates migrate more than male graduates. Why? The authors <a href="http://onlinelibrary.wiley.com/doi/10.1111/j.1467-9787.2007.00518.x/abstract">argue</a> that one explanation lies in the fact that migration can be used as a partial compensation mechanism for gender discrimination in the labour market. If women are discriminated against in their home country, they will simply take their skills elsewhere.</p>
<p>More recent studies have begun to explore this <a href="http://econpapers.repec.org/paper/cesceswps/_5f5572.htm">association</a> between gender discrimination and international migration. One such <a href="http://www.tandfonline.com/doi/abs/10.1080/13504851.2010.503928">study</a> found that gender bias in access to economic opportunities has a significant impact on the emigration of highly skilled women relative to that of men. </p>
<p>It seems that the gender biases that have caused us to ignore women migrants for so long are the same biases that often cause them to migrate in the first place.</p><img src="https://counter.theconversation.com/content/66173/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Abdeslam Marfouk does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>If educated women are discriminated against in their home country, they will take their skills elsewhere.Abdeslam Marfouk, International Migration Researcher, Université de LiègeLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/688052016-11-21T23:38:57Z2016-11-21T23:38:57ZTrump’s immigration policy would push legal US workers down the occupational ladder<figure><img src="https://images.theconversation.com/files/146688/original/image-20161121-32267-60o1o2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The 8 million illegal workers currently in the US workforce contribute to US output, mainly in low-skilled jobs.</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>US President-elect Donald Trump has proposed deporting millions of undocumented immigrants, which proved appealing to large blocs of US voters in key states. Many voters appear to believe that deporting illegal immigrants would boost job opportunities and wages for US workers. </p>
<p>But <a href="http://onlinelibrary.wiley.com/doi/10.1111/j.1465-7287.2010.00208.x/full">economic</a> <a href="http://create.usc.edu/sites/default/files/publications/restrictingemploymentoflow-paidimmigrants.pdf">modelling</a> we carried out for the US departments of Commerce, Homeland Security and Agriculture suggest different conclusions. </p>
<h2>Fewer jobs for legal residents</h2>
<p>The <a href="https://www.numbersusa.com/news/pew-8-million-illegal-aliens-us-workforce-2014">8 million illegal workers</a> currently in the US workforce contribute to US output. They do this mainly by working in low-skilled jobs, in roles such as farm labourers, construction workers, and landscape gardening.</p>
<p>If all the illegal workers left the US, our modelling found, then the US economy would be <a href="http://onlinelibrary.wiley.com/doi/10.1111/j.1465-7287.2010.00208.x/full">3% to 6% smaller</a>. </p>
<p>A smaller US economy would need fewer workers in all occupations. The US would employ fewer public servants, fewer teachers, fewer economists, fewer journalists, fewer farm labourers and fewer construction workers. </p>
<p>And fewer public service jobs would mean fewer public service jobs for legal US residents. This is because the departure of the illegals would not open up vacancies for legal workers in the public service. Why? Undocumented workers can’t get jobs in the US public service, so there are no illegal workers in the public service to be deported. </p>
<p>It is a similar story with teachers, economists and journalists, all of whom work in industries usually closed off to undocumented workers.</p>
<h2>A different story for lower-paid jobs</h2>
<p>But the story is different with farm labourers and construction workers. Although there would be fewer jobs overall in these occupations, there would be more jobs for legal US residents. This is because deporting illegal workers would open up vacancies. </p>
<p>For example, there are 1 million farm labourers in the US, of which about <a href="http://www.ers.usda.gov/topics/in-the-news/immigration-and-the-rural-workforce.aspx">500,000</a> are illegal workers.</p>
<p>If illegal workers were deported, then there would be plenty of vacancies for legal workers. Perhaps not 500,000, but plenty nonetheless. The 3% to 6% shrinkage in the size of the US economy and increases in labour costs to farmers might reduce total employment of agricultural labourers to around <a href="https://ajae.oxfordjournals.org/content/94/2/477.full">800,000</a>. That still leaves 300,000 vacancies to be filled by legal residents. </p>
<p>In general terms, eliminating illegal workers from the US workforce would change the structure of employment for legal workers away from skilled occupations towards low-skilled, low-wage occupations. This effect is akin to shuffling down a ladder – moving from a higher tier in the jobs market to a lower one. </p>
<h2>Shuffling down the occupation ladder</h2>
<p>How does this ladder-shuffle look in practice? Would we see trained economists switching industries to become farm labourers?</p>
<p>Not quite – the transfer of individuals from one occupation to another is not really the right picture. The people most affected by this shift would be new entrants to the jobs market, and people returning to work after a spell of not working (after an illness or caring for children or elders, for example).</p>
<p>As illegal workers leave, vacancies open up at the low end of the labour market and close off at the high end. New entrants and people returning to the labour market are then faced with a less favourable mix of vacancies. This is what produces a shuffle down the occupational ladder. </p>
<p>Young people hoping to become police officers may find that the only vacancies are for security guards. Those hoping to become chefs might wind up as fast-food cooks, and people wanting to be teachers may settle for positions as administrative assistants. </p>
<p>In this way, the inevitable deterioration in the occupational mix of the legal residents takes place with no one actually switching occupation.</p>
<p>Migration-induced changes in the occupational mix of incumbent workers has happened before. As described by US policy analyst <a href="https://www.cato.org/publications/free-trade-bulletin/immigrants-move-americans-move">Daniel Griswold</a>, an influx of low-skilled migrants in the early 20th century changed the occupational mix of incumbent US workers towards skilled occupations, driving them <em>up</em> the occupational ladder. </p>
<p>What Trump now advocates would generate the opposite experience. Departure of low-skilled immigrants would send legal residents down the occupational ladder.</p>
<h2>How should the US handle illegal immigrants?</h2>
<p>As Trump has pointed out, the Obama administration <a href="http://www.politifact.com/truth-o-meter/statements/2016/oct/21/donald-trump/trump-right-deportation-numbers-wrong-talks-about-/">deported many millions</a> of undocumented immigrants. </p>
<p>The Obama administration also proposed a broader approach to undocumented immigrants, which had four key elements. </p>
<p>First, most of the existing illegals should be legalised. </p>
<p>Second, border security should be tightened to control future supply of illegals. </p>
<p>Third, employers of illegals should be stringently prosecuted to control demand. </p>
<p>Finally, flexible temporary work visas should be used to deal with shortages of unskilled workers in agriculture. Unfortunately, these measures couldn’t get through the US Congress.</p><img src="https://counter.theconversation.com/content/68805/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Peter Dixon has conducted for the U.S. Departments of Commerce and Homeland Security. He has also undertaken research for the Cato Institute and is affiliated with the Centre of Policy Studies, Victoria University.
</span></em></p><p class="fine-print"><em><span>Maureen Bleazby has conducted research for the U.S. Departments of Commerce and Homeland Security. She has also undertaken research for the Cato Institute and is affiliated with the Centre of Policy Studies, Victoria University. </span></em></p>Many US voters appear to believe that deporting illegal immigrants would boost job opportunities and wages for US workers. But economic modelling suggests different conclusions.Peter Dixon, Professor, Centre of Policy Studies, Victoria UniversityMaureen Rimmer, Professor, Centre of Policy Studies, Victoria UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/665782016-10-05T13:26:42Z2016-10-05T13:26:42ZSouth Africa’s economy would take a knock if starved of new graduates<figure><img src="https://images.theconversation.com/files/140493/original/image-20161005-14240-1yt1ijz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">South Africa's economy will be hit hard if universities can't finish the year.</span> <span class="attribution"><span class="source">Cornell Tukiri/EPA</span></span></figcaption></figure><p>There is a <a href="http://www.bloomberg.com/news/articles/2016-10-05/student-protests-threaten-to-close-south-african-universities">real risk</a> that some of South Africa’s universities will not see out the 2016 academic year which ends in November. The ongoing “fees must fall” <a href="https://theconversation.com/why-student-protests-in-south-africa-have-turned-violent-66288">protests</a> have seen classes disrupted at some institutions, and there are fears that exams won’t be written.</p>
<p>What might a total shutdown mean for the country’s labour market in 2017? To find out, we conducted an analysis using <a href="http://www.copsmodels.com/models.htm">a model</a> designed for economic research by the University of Pretoria in collaboration with the global <a href="http://www.copsmodels.com/">Centre of Policy Studies</a>.</p>
<p>The model allowed us to isolate and measure the impact of a large reduction in graduates entering the labour market in 2017 against a “business as usual” baseline scenario.</p>
<p>The results were extremely worrying. In one simulation – the worst case scenario – assumed in our modelling to be a 90% reduction in graduates entering the labour market, 2017 would be a bleak year. South Africa’s Gross Domestic Product (GDP) would fall dramatically, with the economy shedding around R5.6 billion. Investments would plummet. </p>
<p>South Africa produces around <a href="http://mg.co.za/article/2016-05-17-black-graduate-numbers-are-up">80 000 graduates</a> a year. But this excludes other non-degree qualifications like diplomas and certificates, which may also produce new skilled labour market entrants. In our model’s database, the relevant number worked out to be little lower – around 50 000 – since we assumed that some graduates also take up lesser-skilled jobs. They can move from there into skilled categories in later years.</p>
<p>Our analysis showed that a 90% reduction in skilled labour (graduates) entering the labour market in 2017 would have a negative impact on virtually every macroeconomic indicator. If it were accompanied by negative productivity or a loss in business confidence, the effects across the economy would be exacerbated and GDP could fall even further.</p>
<p>The results also suggest that inequality would deepen. Unemployment would rise and real wages for less skilled workers would fall. The only real winners in this scenario would be incumbent skilled workers, who would benefit from higher real wages.</p>
<h2>How the analysis worked</h2>
<p>Our economic modelling involved two simulation runs. The first generated a business as usual baseline projection for the economy. The second introduced the “shock” under investigation – in this case, a reduction in graduates entering the labour market in 2017. The results of the two simulations were then compared and the percentage change between the two runs calculated for each variable. </p>
<p>In conducting our analysis, we made a number of simplifying assumptions:</p>
<p>We made no explicit assumption about the potential impact of the shutdown on productivity, business confidence or any other naturally exogenous variables in the policy run. For the scenario discussed here, those variables are assumed to remain on their baseline path.</p>
<p>We also did not consider the cost of damages to institutions during the protests. For the purpose of this conversation, we restricted our analysis to 2017 – though it’s worth mentioning that the picture for 2018 remains bleak, even allowing for a bumper year of graduates entering the market.</p>
<h2>A bleak outlook</h2>
<p>Results for some of the key macroeconomic variables confirmed our worst fears. </p>
<p>The reduction of skilled labour supply in the economy resulted in a drop in employment of 0.29%. This led to a fall in real GDP of 0.14%, or around R5.6 billion in 2017. That’s equivalent to <a href="https://www.enca.com/south-africa/saa-losses-rocket-to-r56-billion">the loss</a> that national carrier South African Airways reported for the 2014/15 financial year. </p>
<p>On the back of reduced economic activity, and by implication, lower income generated, private and public consumption would fall by 0.2%. This is not good news, since the ability to consume is a proxy for welfare: the level of an individual’s consumption is an indication of how wealthy that individual is. In this scenario, as the economy adjusts to requiring a lower equilibrium amount of capital – a result of less skilled labour in the economy – investment spending would fall by over 0.8% in 2017.</p>
<p>Our results show that the average real wage rate in the economy would rise. The anticipated real wage increase would, of course, be restricted to skilled labour categories on the back of the skills scarcity created by the lack of new graduates. For lesser skilled labour categories, average real wages would fall slightly because of the shrinking economy and the associated shrinking of demand for labour.</p>
<p>Industries that are skilled labour intensive in their production process would, in our scenario, experience more damage. The biggest losers would include the education and health sectors. Their production would fall 0.25% below base. Given its strong link to the investment sector, the construction industry could be expected to shrink by 0.75%, shedding many jobs.</p>
<h2>Dire consequences</h2>
<p>Higher education has never been more important to the process of building human capital – poverty’s kryptonite. This is evidenced by the high return it yields to graduates. In South Africa and other developing countries the return on education is <a href="http://siteresources.worldbank.org/INTDEBTDEPT/Resources/468980-1170954447788/3430000-1273248341332/20100426_16.pdf">much higher</a> relative to other countries. The historical shortage of skills in the economy has made a degree, a diploma or any other proof of skills a valuable asset for everyone and a ticket into a better life. </p>
<p>The immediate economic impact of a national shutdown of universities should not be ignored or neglected. It would have significant, and potentially dire, consequences down the line – especially for those who are most in need.</p>
<p><em>The views expressed here are the authors’ alone and are not necessarily those of the organisation they are affiliated with.</em></p>
<p><strong>Editor’s note: This article was updated after publication to clarify the impact of various scenarios on GDP.</strong></p><img src="https://counter.theconversation.com/content/66578/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Roula Inglesi-Lotz receives funding from the National Research Foundation (NRF) South Africa. The views expressed here are those of the author, and not any of the funders.</span></em></p><p class="fine-print"><em><span>Heinrich Bohlmann has received funding from the National Research Foundation. The views expressed here are his own. </span></em></p>Economic models suggest that South Africa’s GDP would fall, inequality would deepen and unemployment would rise if university graduates don’t enter the labour market in 2017.Roula Inglesi-Lotz, Associate Professor of Economics, University of PretoriaHeinrich Bohlmann, Senior Lecturer, University of PretoriaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/594502016-05-16T04:02:23Z2016-05-16T04:02:23ZWe can’t have a strong economy without a strong university sector, warns VC<figure><img src="https://images.theconversation.com/files/122612/original/image-20160516-12583-1nmdegz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">University graduates are vital to creating new jobs, technologies and industries.</span> <span class="attribution"><span class="source">from www.shutterstock.com</span></span></figcaption></figure><p><em>The following is an edited extract taken from a speech by Barney Glover at the Futureproof 2016 conference in Sydney on 16 May, around the essential role of universities in shaping the Australian economy.</em></p>
<hr>
<p>We are in a very different place than we were three years ago.</p>
<p>During the 2013 election campaign, I think it is fair to say that neither side of politics made higher education, nor for that matter research, a particularly prominent issue. Each of them went to that poll with relatively modest detail in their policy platforms.</p>
<p>And yet, during the last parliamentary term, we witnessed perhaps the greatest divergence for quite some time in the views of the two major parties on their policy objectives for higher education.</p>
<p>Having <a href="https://theconversation.com/federal-budget-2016-education-experts-react-58592">withdrawn their plans </a>for the full deregulation of student fees in the recent budget, the Coalition has now floated a <a href="https://docs.education.gov.au/documents/driving-innovation-fairness-and-excellence-australian-education">series of policy options</a> for consultation. </p>
<p>However, cuts of $2.5 billion remain in the budget papers from 2018 onwards.</p>
<p>Labor, meanwhile, is heading to this election with the most detailed higher education policy framework produced by an opposition in quite a while. </p>
<p>Despite the detail, there are still elements of their position that warrant discussion. </p>
<p>The sector well remembers that Labor in government also made sizeable cuts. Their current policy, however, pledges an increase on current funding levels.</p>
<p>Whatever the election outcome, Universities Australia will test proposed shifts from current policy settings against the major policy statement we launched late last year - <a href="https://www.universitiesaustralia.edu.au/news/policy-papers/Keep-it-Clever--Policy-Statement-2016#.VzkWEfl96Uk">Keep It Clever</a>. </p>
<p>It called for sustainable and sustained public investment in universities, measures to lift industry-research collaboration, and policies that will enable us to help Australia meet the workforce needs of the future.</p>
<p>It is on the theme of economic transition where the views of both major parties converge; an idea that has dominated the political landscape in recent times.</p>
<h2>What does economic transition require?</h2>
<p>Let’s think about the challenge of how we move from an economy heavily reliant on mining and construction to one in which skills and knowledge become our most precious commodities. </p>
<p>That task simply cannot be achieved without a strong university sector; one that produces a highly skilled workforce and generates new jobs and new industries to replace the ones that are disappearing.</p>
<p>And yet, how clearly does the Australian public see that direct connection between universities and prosperity? In people’s busy lives, they don’t always join those dots.</p>
<p>We want to remind all Australians - and all candidates and political parties - of the enormous contribution that universities make to almost every aspect of Australia’s economic and social wellbeing.</p>
<p>Many Australians would know that Australia’s university researchers and graduates were <a href="https://theconversation.com/five-ways-science-can-lead-the-innovation-debate-50838">responsible for inventions</a> such as the Cochlear implant, and that they contributed to the development of Wifi at CSIRO, the realisation of the ground-breaking cervical cancer vaccine, Gardasil and many others.</p>
<p>But what may not be so top of mind is how a high-quality university system touches their lives in so many other ways. </p>
<p>The highly-skilled teachers in their child’s primary school classroom? Educated at a university. The doctor who treats their elderly parent? Educated at a university. The engineer who designed the bridge they drive over safely every day. The forensic scientist who helps solve crimes and makes their communities safer. The IT programmers who engineered the technology in their smartphone. </p>
<p>The people who designed banking security systems to keep their money safe. The people who came up with GPS, who keep planes in the sky, and the plant scientists who are developing more drought-resistant crops. All university educated.</p>
<p>University graduates are vital to creating new jobs, new technologies, and new industries. Many of them also save lives, lift wellbeing, and enrich our community. A strong university sector creates benefits for all Australians.</p>
<h2>40% of jobs predicted to disappear in ten years’ time</h2>
<p>According to last year’s, <a href="http://www.fya.org.au/2015/08/23/the-new-work-order-report/">New Work Order report</a>, “70% of young Australians currently enter the workforce in jobs that will be radically affected by automation”.</p>
<p>Over the next ten to 15 years alone, the report estimates that 40% of existing jobs will disappear.</p>
<p>For people entering the workforce now, the notion of a linear career narrative or even steady progression is over. </p>
<p>Young people are expected to have an average of 17 different occupations over the course of their working lives.</p>
<p>Universities will be even more essential to help people reskill, upskill and reinvent their jobs.</p>
<h2>University graduates create jobs for non graduates</h2>
<p>Disruption is not a distant rumble. It is upon us.</p>
<p>Although no one can be completely future proofed from the negative aspects of unforeseen and seismic change, Australia’s universities provide our students with the critical thinking, problem solving skills, knowledge and adaptability to help them, not only cope with such change, but lead and excel.</p>
<p>And it is not only our graduates who benefit.</p>
<p><a href="https://www.universitiesaustralia.edu.au/Media-and-Events/media-releases/-The-graduate-effect---having-more-graduates-grows-jobs-and-wages#.VzkhHpN95Bw">Modelling</a> by economic consultants Cadence Economics highlights the role of universities in increasing the number of jobs and lifting the wages and living standards of Australians and the Australian economy overall.</p>
<p>It shows that for every 1,000 university graduates who enter the Australian workforce, 120 new jobs are created for people without university degrees.</p>
<p>The analysis also finds that having more graduates in the economy lifts the wages of workers who do not have degrees, by $655 a year or $12.60 a week.</p>
<p>Australia cannot achieve an economic transition without a strong university sector.</p>
<h2>Budget “savings” impossible to accept</h2>
<p>We’ve seen in the government’s implementation of several of the major recommendations of the Watt Review that policy evolution is possible. </p>
<p>Changes to block grants and the infusion of the National Innovation and Science Agenda with structures to facilitate deeper collaboration with industry are further indications of the possibilities of progressive reform, if targeted at the right areas, and if properly resourced.</p>
<p>In contrast, other reforms and adjustments rationalised as “savings” in the context of the budget are impossible to accept, namely the $2.5 billion in cuts.</p>
<p>The cut of $152 million from the Higher Education Participation and Partnerships (HEPP) programme was also disappointing for an initiative that is so critical in improving access to higher education for people from disadvantaged and marginalised backgrounds. </p>
<p>As was the <a href="https://theconversation.com/innovation-in-learning-and-teaching-is-too-important-to-cut-58629">abolition of the Office for Learning and Teaching</a>, a program that drove innovation and excellence in teaching, which is vital to student retention and satisfaction.</p>
<p>Fortunately, the budget also included some positive announcements for higher education; such as the reversal of the efficiency dividend, originally applied in 2014, on programs where legislation has not been passed. </p>
<p>The allocation of $10 million for the Tertiary Education Quality and Standards Agency (TEQSA) and $8 million to improve the Quality Indicators for Learning and Teaching (QILT) website were welcome additions.</p>
<p>Australia’s universities rate relatively highly by international standards but that standing is not to be taken for granted; particularly not when competitor nations are investing at a far greater scale and rate than we are in this critically important economic driver.</p>
<p>• <em>The full speech can be <a href="https://www.universitiesaustralia.edu.au/Media-and-Events/media-releases/Universities-are-essential-to-economic-transition#.VzkYjZN95Bx">read here</a>.</em></p><img src="https://counter.theconversation.com/content/59450/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Barney Glover is chair of Universities Australia and vice chancellor of Western Sydney University. </span></em></p>Over the next ten years, 40% of jobs are predicted to disappear. Universities will be essential to helping people reskill, upskill and reinvent their jobs.Barney Glover, Vice-Chancellor, Western Sydney UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/420152015-05-26T06:16:35Z2015-05-26T06:16:35ZWe can’t blame the loss of mid-level jobs purely on robots<figure><img src="https://images.theconversation.com/files/82094/original/image-20150518-25422-sa1qtn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Friend or foe to the job-seeker?</span> <span class="attribution"><span class="source">Robot with pencils by Kirill__M/www.shutterstock.com</span></span></figcaption></figure><p>Several developed countries including the US, UK and Germany have seen their labour markets polarised in recent decades as the number of middle-skilled jobs has declined relative to that of low and high-skilled ones. Technology has been singled out as the main culprit: computers and automation have reduced the demand for mid-level skilled workers in production lines as well as offices, increasing that for high-skilled managers, professionals and technicians. But there has been little or no impact on the demand for low-skilled service occupations. </p>
<p>There is a perception that the range of tasks that can be automated is rapidly expanding thanks to fast technological development. This has exacerbated concerns on the impact of technology on <a href="http://www.lrb.co.uk/v37/n05/john-lanchester/the-robots-are-coming">the quantity and quality of jobs</a>. But does the evidence support the view that the future of the labour market is entirely in the hands of the robots?</p>
<p>In the simplest version of this story, as advancements in technology lead firms to demand fewer workers in mid-skill occupations, these jobs should see both employment and wages decline relative to low and high-skill jobs. This should show up in economic data as what we might call “double polarisation”: when both employment and wages grow more in high and low-skill occupations than they do in middling ones. This double polarisation was indeed what happened in the US in the 1990s, but it <a href="http://www.epi.org/publication/technology-inequality-dont-blame-the-robots/">did not continue into the 2000s</a>. More broadly, wage polarisation has generally not been detected in <a href="http://qje.oxfordjournals.org/content/124/2/843.short">other countries</a> that have experienced job polarisation, such as Germany and the UK. </p>
<p>The simple story blaming technology alone for taking mid-skilled jobs cannot explain what we see in the data. Other factors are likely to have played an important role, as I have explored in my <a href="https://sites.google.com/site/econsalvatori/polarisation">ongoing research</a> on the situation in the UK.</p>
<h2>UK boom in high-skilled jobs</h2>
<p>The UK has seen a steady decline in middling occupations since at least 1980. As the graph below shows, growth in top occupations exceeded that in bottom ones in each of the last three decades. This has resulted in a substantial shift of employment from middling to top occupations: out of 100 employees, 19 fewer could be found in middle-skill occupations in 2012 than in 1979. Of these, 16 had moved to higher-skill occupations and only three into lower-skill ones.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/82550/original/image-20150521-1001-15viou9.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/82550/original/image-20150521-1001-15viou9.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/82550/original/image-20150521-1001-15viou9.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=282&fit=crop&dpr=1 600w, https://images.theconversation.com/files/82550/original/image-20150521-1001-15viou9.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=282&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/82550/original/image-20150521-1001-15viou9.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=282&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/82550/original/image-20150521-1001-15viou9.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=355&fit=crop&dpr=1 754w, https://images.theconversation.com/files/82550/original/image-20150521-1001-15viou9.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=355&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/82550/original/image-20150521-1001-15viou9.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=355&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Job polarisation in the UK.</span>
<span class="attribution"><span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>This is noticeably different from the US experience, where growth at the bottom has progressively outpaced that at the top, culminating in the 2000s when <a href="http://dept.econ.yorku.ca/%7Ebmsand/Great-Reversal_v6b.pdf">employment growth was concentrated in</a> low-skill occupations. </p>
<p>A distinctive change that took place in the UK since the early 1990s is the expansion in university education which led to a threefold increase in the share of graduates among employees. The expansion of graduates in this way is different to the US, which saw no comparable increase in the share of graduates over the past 20 years. This increase in the educational attainment of the UK workforce accounts for the entire growth in top-skilled occupations and a third of the decline in middling occupations. </p>
<p>There is no indication that wages in middling occupations have been decreasing in the UK, as one would expect if demand was declining due to the spread of automation. It is instead the performance of wages in high-skill occupations that has deteriorated over time relative to middling ones. It was the worst in the 2000s when wages in the 10% highest-paid occupations grew 10% less than those in median occupations. </p>
<p>During this period, the supply of graduates in the UK continued to grow at the same time as the growth of top occupations in other similarly developed countries such as <a href="http://dept.econ.yorku.ca/%7Ebmsand/CanadianPolarization-v10.pdf">the US and Canada</a> stalled. This stalling elsewhere suggests that there may have been a wider <a href="http://dept.econ.yorku.ca/%7Ebmsand/Great-Reversal_v6b.pdf">slow down</a> in the (technology-led) demand for high-skill occupations in the 2000s. </p>
<p>These facts are highly suggestive that the improvement in the education of the workforce has contributed significantly to the reallocation of employment from mid- to high-skill occupations in the UK.</p>
<h2>Clerical wages going up</h2>
<p>But the evidence from the UK also highlights another possible limitation of the story in which technology simply replaces mid-skilled workers. Since the 1990s, the share of mid-level, clerical jobs in the UK has indeed slowly declined, consistent with the idea that technology reduces the need for people in these occupations.</p>
<p>However, over the same period the wages of clerical workers have grown at a rate similar to that of professional occupations, such as lawyers and doctors, a fast-growing group whose real wages increased by about 64%. Similarly, other studies have also found that <a href="http://economics.mit.edu/files/1474">in the US</a>, clerical occupations have seen their wages increase in spite of the decline in their relative number.</p>
<p>One of the early proponents of the idea that computers displace mid-skilled workers, MIT scholar <a href="http://economics.mit.edu/files/9835">David Autor</a>, has argued that, within the same occupation, technology might replace workers in certain tasks while complementing them in others which are more cognitive and difficult to automate – or even expand the range of tasks they can perform. So, while much of the filing work once done by secretaries might now be done by computers, the remaining secretaries are supported by computers in their other tasks and perform a range of new organisational ones that were once the domain of managerial staff.</p>
<p>While there is no doubt that technology is a major force at play in the labour market, the differences in experiences across countries suggests other factors play an important role as well. For the UK, several pieces of evidence indicate that the expansion in university education has contributed to changing the occupational structure of the labour market. </p>
<p>Across countries, there is generally little evidence to support the idea that automation has been dramatically disrupting the labour market in recent times. Instead, there are clear indications that the story is likely to be a nuanced one, where the complex interaction between changes in the skills of the workforce, technology and the way different tasks are bundled into jobs means that the fate of those occupations that might appear most at risk might not be quite sealed yet.</p><img src="https://counter.theconversation.com/content/42015/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Andrea Salvatori receives funding from the Economic and Social Research Council and has previously received funding from the Department of Work and Pensions and the Low Pay Commission. </span></em></p>An increasing number of high-skilled graduates, rather than technology, could be to blame for a decline in the UK’s mid-paying jobs.Andrea Salvatori, Research Fellow, Institute for Social and Economic Research, University of EssexLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/395692015-04-20T01:16:55Z2015-04-20T01:16:55ZCould a robot do your job? Short answer: yes<figure><img src="https://images.theconversation.com/files/78363/original/image-20150417-27259-dnfz93.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Could they be after your job?</span> <span class="attribution"><span class="source">Peyri Herrera/Flickr</span>, <a class="license" href="http://creativecommons.org/licenses/by-nc-nd/4.0/">CC BY-NC-ND</a></span></figcaption></figure><p>Here’s a game to play over dinner. One person names a profession that they believe can’t be taken over by a machine, and another person has to make a case why it’s not so future-proof. We played this game on an upcoming episode of SBS’s <a href="http://www.sbs.com.au/news/insight">Insight</a> on the topic of the future of robots and artificial intelligence.</p>
<p>The first profession suggested was musician. An argument often put forwards against artificial intelligence (AI) is that computers can’t be creative. But there are plenty of examples to counter this argument. For instance, computers can take plain sheet music and turn it into an <a href="http://www.newscientist.com/article/mg15721212.300-bird-lives--charlie-parker-could-soon-be-playing-in-your-living-room.html">expressive jazz performance</a>, as my colleague Ramon Lopez de Mantaras <a href="http://www.iiia.csic.es/%7Emantaras/AIMag23-03-006.pdf">has shown</a>. </p>
<p>So, jazz musicians watch out. Your jobs might not be safe from robot incursion.</p>
<p>The next option was police officer. It’s often said that computers can’t or won’t behave ethically. Unfortunately, Hollywood has already painted a very dystopian picture here in movies like Robocop and Terminator. And, as the current UN campaign to ban autonomous weapons demonstrates, we could easily end up there if we aren’t careful. </p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/78357/original/image-20150417-27263-1gkryqq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/78357/original/image-20150417-27263-1gkryqq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/78357/original/image-20150417-27263-1gkryqq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=600&fit=crop&dpr=1 600w, https://images.theconversation.com/files/78357/original/image-20150417-27263-1gkryqq.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=600&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/78357/original/image-20150417-27263-1gkryqq.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=600&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/78357/original/image-20150417-27263-1gkryqq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=754&fit=crop&dpr=1 754w, https://images.theconversation.com/files/78357/original/image-20150417-27263-1gkryqq.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=754&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/78357/original/image-20150417-27263-1gkryqq.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=754&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The future of policing?</span>
<span class="attribution"><span class="source">Dave Sag/Flickr</span>, <a class="license" href="http://creativecommons.org/licenses/by-nc-sa/4.0/">CC BY-NC-SA</a></span>
</figcaption>
</figure>
<p>The third profession put forward was human resources. Naturally, this came from an HR consultant worried for her future job prospects. However, the bureaucratic side of HR is already easily automated. Indeed, we spend much of our lives on the phone already talking to machines. Can I speak to a real person, please? </p>
<p>On the other hand, the more human-facing side of HR is likely to be harder to automate. But as we argue in the next answer, it’s not clear that this will be impossible. </p>
<p>The fourth challenge was psychiatrist. Again, the human-facing nature of this would seem to offer significant resistance to automation. Nevertheless, there’s an interesting historical precedent. </p>
<p>A well known computer program called <a href="http://www.manifestation.com/neurotoys/eliza.php3">Eliza</a> was the very first chatterbot. It unintentionally passed itself off as a real <a href="http://en.wikipedia.org/wiki/Person-centered_therapy">Rogerian psychotherapist</a>.</p>
<p>Eliza was not very smart. Indeed, the program’s author, Joseph Weizenbaum, meant it more as parody than as therapist. However, his secretary <a href="http://www.alicebot.org/articles/wallace/eliza.html">famously asked</a>
to be left alone so she could talk in private to the chatterbot. </p>
<p>So, shrinks watch out. Your jobs might not be safe.</p>
<p>The final challenge was Prime Minister.</p>
<p>On the one hand, this is a good answer, as one assumes there’s little routine to being Prime Minister but a lot of tough high level decision making that would be tough for a machine to handle. On the other hand, it’s a poor winner of our little game. It may be the only job in the whole country that’s safe from robots.</p>
<p>In one final, beautiful irony, this forthcoming episode of Insight has the robots up on the stage. We, the supposed expert commentators were in the audience. So, even TV pundits should watch out. Your jobs might not be safe too. </p>
<h2>Net effects</h2>
<p>What this discussion highlights is that the middle classes are likely to be increasingly squeezed by machine labour. Professions that we used to think were quite safe – like doctor, lawyer or accountant – will be increasingly automated.</p>
<p>Whenever technology takes away jobs, it tends to make new jobs and industries elsewhere. For example, printing removed the need for scribes but created the vast publishing industry in its stead. And publishing went on to create many other jobs in the industries that grew out of all the knowledge passed on in printed material. </p>
<p>More recently, computers have taken away many traditional jobs in the printing industry, like <a href="https://gettingpublished.wordpress.com/2010/01/22/what-is-typesetting/">type setters</a>. But we now see many new jobs in areas like self-publishing and web design.</p>
<p>Economists continue to argue over the <a href="http://www.pewinternet.org/2014/08/06/future-of-jobs/">net effects of technology</a>. Does technology create more economic activity so we are all better off? Or does it put more people out of work, concentrating wealth in the hands of the few?</p>
<p>One thing seems sure. It requires us to adapt. And for this, we need an educated, high tech workforce. This brings the conversation back to higher education and the stalled reforms that now trouble this sector in Australia. </p>
<p>If there is one policy we need to get right, to future-proof Australia against machines and other disruptions, I would argue, this is it.</p><img src="https://counter.theconversation.com/content/39569/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Toby Walsh receives funding from the Australian Research Council, the Department of Communications, and the Asian Office of Aerospace Research and Development.</span></em></p>There are very few jobs that are can’t be done in principle by robots and artificial intelligence. What will you do when a robot takes your job?Toby Walsh, Professor, Research Group Leader, Optimisation Research Group , Data61Licensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/347412014-12-17T10:35:09Z2014-12-17T10:35:09ZUS seen losing its share of world’s highly skilled migrants<figure><img src="https://images.theconversation.com/files/67397/original/image-20141216-14147-1ioac6h.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">These documents have become less sought after among the ranks of the world's highly skilled migrants. </span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>The United States has always been known as a nation of immigrants and a top destination for scientists and other highly skilled professionals. That ability to attract the world’s most educated and innovative people to its shores has often been credited with powering the US economy. </p>
<p>But strikingly, a <a href="http://zagheni.net/uploads/3/1/7/9/3179747/migration_professionals_linkedin.pdf">new study of worldwide migration patterns</a> suggests the US is losing its reputation as a mecca for professionals as its global share of the most highly educated migrants declines. The result raises the question of whether the country can remain competitive in attracting top talent in an increasingly globalized economy.</p>
<p>Colleagues and I analyzed recent trends in international migration of highly skilled workers – those with bachelor’s degrees or higher – using a data set of unprecedented detail, extracted from <a href="https://www.linkedin.com">LinkedIn</a>, the social networking website for professionals. </p>
<p>LinkedIn counts more than 200 million members in more than 200 countries and territories. People typically use their LinkedIn profiles to post their employment and educational history. That information provides the most comprehensive and up-to-date picture of the international flows of highly skilled migrants. </p>
<p>Respecting the privacy of LinkedIn’s members was a primary concern for us. We removed all personally identifiable information from our data set before conducting the study and only analyzed data in aggregate.</p>
<p>The study leveraged various aspects of <a href="http://economicgraphchallenge.linkedin.com">LinkedIn’s Economic Graph</a> – a digital map of the world economy based on member profiles – to understand trends in migration patterns. The research is the result of a collaboration between Bogdan State, who at the time was a Sociology PhD student at Stanford University, Mario Rodriguez, a Senior Data Scientist at LinkedIn, Dirk Helbing, a Professor at ETH Zurich and Emilio Zagheni, an Assistant Professor at the University of Washington, Seattle. </p>
<h2>A topic ignored</h2>
<p>Most of the public discussion on immigration reform has focused on the issue of undocumented immigrants living in the US and the potential consequences of highly-skilled immigrations on jobs and wages of Americans. Less attention has been paid, however, to the changing position of the United States as a destination of the world’s most sought after migrants. </p>
<p>Our study, which comes at a time when the country is mired in a divisive fight over such reform, counters conventional wisdom that the US is the incontestable top choice for professionals migrating from other countries. </p>
<p>We tracked the proportion of migrants whose destination was the United States, out of all migrants observed during a particular calendar year, covering the period from 1990 to 2012. In our sample of LinkedIn users, we observed a slight increase of the fraction of migrants who went to the US during the 1990s, followed by a sharp downward trend after the year 2000. </p>
<p>While 27% of migrating professionals chose the US in 2000, just 13% did in 2012. The decline was seen across education levels, from bachelor’s to doctorates. The biggest drop was among those in the science, technology, engineering and math fields, from 37% to 15%. </p>
<p>The biggest beneficiaries of the change were Asian countries, which witnessed the highest increase in professional migrants, attracting a cumulative 26% in 2012, compared with just 10% in 2000.</p>
<h2>Increasing opportunities or a drop in demand?</h2>
<p>The patterns that we observed could be tied to a variety of factors from improved career opportunities across the globe to a drop in demand for highly skilled migrants in the US or inefficiencies in its immigration system. </p>
<p>During the first decade of the 21st century, for example, the US experienced two major economic crises: the collapse of the “<a href="http://www.nethistory.info/History%20of%20the%20Internet/dotcom.html">dot-com bubble</a>” from 1999 to 2001 and the financial crisis of 2008. These crises adversely affected opportunities for immigrants in the US. </p>
<p>Nonetheless, our findings indicate more than a reaction to short-term crises. Long-term structural changes are taking place in the global system of employment-based, highly skilled migration. </p>
<p>Skilled immigrants have been a source of innovation and economic strength for the United States. One of the implications of the study is that, in the increasing global competition for talent, the US will have to work harder to attract and retain the world’s best and brightest. That may be an issue Americans will have to ponder as they debate the best way to implement immigration reform.</p><img src="https://counter.theconversation.com/content/34741/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Emilio Zagheni does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The United States has always been known as a nation of immigrants and a top destination for scientists and other highly skilled professionals. That ability to attract the world’s most educated and innovative…Emilio Zagheni, Assistant Professor of Sociology, University of WashingtonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/238652014-03-03T16:30:21Z2014-03-03T16:30:21ZHow to return the UK to growth and solve the productivity puzzle<p>The latest <a href="http://www.ons.gov.uk/ons/rel/icp/international-comparisons-of-productivity/2012---final-estimates/stb-icp0214.html">data from the ONS</a> show that the UK’s productivity gap with other G7 nations is at its widest since 1992. This bad news comes against the backdrop of increased optimism as the economy seems finally to have returned to growth. Unfortunately, this growth seems to be generated by Britain’s <a href="http://http:/www.bankofengland.co.uk/publications/Pages/inflationreport/2014/ir1401.aspx/www.bankofengland.co.uk/publications/Pages/inflationreport/2014/ir1401.aspx">usual suspects</a>: consumer spending and a booming housing market (stoked by government subsidies like <a href="http://www.economist.com/blogs/freeexchange/2013/07/britains-recovery-0">Help To Buy</a>) rather than from exports and investment. The danger is that a recovery without underlying productivity growth is unsustainable.</p>
<p>Is the modicum of good news a vindication of the chancellor’s austerity policies? Au contraire, George. The recovery (the slowest on record for the UK) has been in spite of, rather than because of, such policies. What is needed is renewed focus on raising productivity. Business investment is a crucial ingredient, and the government can do more to support this.</p>
<h2>Illuminating the productivity puzzle?</h2>
<p>The latest ONS figures show that in 2012 labour productivity as measured by output per hour was 21% below the G7 average (Figure 1, below) – the widest gap for 20 years. In output per worker terms, the gap was 25%. Moreover, output per hour in 2012 was 3% lower than in 2007, a full 16% below the level it would have been if long-term pre-2007 trends had continued. This lacklustre productivity performance since the financial crisis has been dubbed the “Productivity Puzzle” because such a fall has been unprecedented in post war UK history.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/42777/original/gznc4f6x-1393697578.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/42777/original/gznc4f6x-1393697578.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/42777/original/gznc4f6x-1393697578.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=410&fit=crop&dpr=1 600w, https://images.theconversation.com/files/42777/original/gznc4f6x-1393697578.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=410&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/42777/original/gznc4f6x-1393697578.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=410&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/42777/original/gznc4f6x-1393697578.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=515&fit=crop&dpr=1 754w, https://images.theconversation.com/files/42777/original/gznc4f6x-1393697578.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=515&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/42777/original/gznc4f6x-1393697578.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=515&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Notes: Current price GDP per hour worked from ONS data, release date February 2014. Average refers to G7 average, excluding UK.</span>
<span class="attribution"><span class="source">John Vanreenen</span></span>
</figcaption>
</figure>
<p>For many “supply-side pessimists”, this indicates a large and permanent loss to productivity. According to this view, output is very close to potential and so monetary and fiscal policy must be tightened.</p>
<p>The flipside of the puzzle of low productivity is a jobs conundrum. Given that GDP growth has been so poor, it is remarkable that unemployment is not higher. Central to understanding this is the fact that UK real wages are far more flexible than in past recessions due to weakened union power and welfare reforms. In response to low demand, real wages have fallen by 8% since Lehman’s collapse (based on <a href="http://www.ons.gov.uk/ons/rel/elmr/an-examination-of-falling-real-wages/2010-to-2013/art-an-examination-of-falling-real-wages.html">data to October 2013</a>). This has helped keep labour costs low for employees and sustained higher employment. However, low wages and rising costs of capital due to banking dislocation have deterred business investment, as has high uncertainty and the disastrous decision to slash public investment by half. Figure 2, below, shows how real investment has collapsed since 2008.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/42778/original/g8ksrgmr-1393697784.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/42778/original/g8ksrgmr-1393697784.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/42778/original/g8ksrgmr-1393697784.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=429&fit=crop&dpr=1 600w, https://images.theconversation.com/files/42778/original/g8ksrgmr-1393697784.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=429&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/42778/original/g8ksrgmr-1393697784.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=429&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/42778/original/g8ksrgmr-1393697784.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=539&fit=crop&dpr=1 754w, https://images.theconversation.com/files/42778/original/g8ksrgmr-1393697784.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=539&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/42778/original/g8ksrgmr-1393697784.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=539&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">ONS data, release date December 2013.</span>
<span class="attribution"><span class="source">John Vanreenen</span></span>
</figcaption>
</figure>
<p>Lower investment can depress the amount of capital per worker and so will reduce labour productivity. Less machines per employee imply less output per employee. This “capital shallowing” is not a fundamental loss of efficiency – as demand improves and credit markets return to normal, productivity should rebound. <a href="http://cep.lse.ac.uk/pubs/download/special/cepsp31.pdf">A close inspection of the data</a>, reveals that most of the fall in labour productivity can be accounted for by the fall in effective capital per worker (and to a smaller extent the fall in hours per worker). What remains is a measure of efficiency (sometimes called Total Factor Productivity or TFP), for which the trend is not so different compared to other severe recessions (see Figure 3, below).</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/42779/original/thggnqvv-1393697912.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/42779/original/thggnqvv-1393697912.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/42779/original/thggnqvv-1393697912.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=444&fit=crop&dpr=1 600w, https://images.theconversation.com/files/42779/original/thggnqvv-1393697912.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=444&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/42779/original/thggnqvv-1393697912.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=444&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/42779/original/thggnqvv-1393697912.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=557&fit=crop&dpr=1 754w, https://images.theconversation.com/files/42779/original/thggnqvv-1393697912.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=557&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/42779/original/thggnqvv-1393697912.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=557&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">1970s and 1980s derived from EU KLEMS data. 1970s recession is 1973-1978; 1980s recession is 1979-1984; Current is 2007-2012. 2000s authors’ estimates in Pessoa and Van Reenen (2013)</span>
<span class="attribution"><span class="source">John Van Reenen</span></span>
</figcaption>
</figure>
<p>Other factors may also matter for the recent productivity puzzle. They include the misallocation of capital due to forbearance (postponement of loan payments granted by lenders), mis-measurement of <a href="http://www.investopedia.com/terms/i/intangibleasset.asp">intangible assets</a> and labour quality deterioration. But the underutilised resources caused by low demand and capital shallowing due to changes in the prices of labour and capital seem to explain a large chunk of the mystery. </p>
<p>The LSE Growth Commission has shown that there <a href="http://cep.lse.ac.uk/conference_papers/15b_11_2011/CEP_Report_UK_Business_15112011.pdf">is underlying strength in the UK economy</a> built up since the early 1980s when the UK reversed a century of relative economic decline. Productivity growth in the three decades leading up to the crisis was broad based with finance only contributing around a tenth of the improvement. Much of these improvements were due to policy reforms strengthening competition in product and labour markets, the benefits of which are unlikely to suddenly evaporate.</p>
<h2>Unbalanced recovery</h2>
<p>So the story of the supply-side pessimists doesn’t stack up.</p>
<p>If the demand side is important, then excessive austerity may have led to a slower recovery with the risk of permanent structural damage. Regardless of how we may quantify this lost growth (for example the <a href="http://www.nber.org/papers/w19414">Jorda and Taylor estimates</a>), the important fact is that we could have done a lot <a href="http://cep.lse.ac.uk/pubs/download/special/cepsp27.pdf">better</a>. </p>
<p>Business investment has stayed flat: the latest ONS data show that while business investment rose 2% in Q3 2013 compared to the previous quarter – it was 5.3% lower than Q3 2012.</p>
<p>Distortions with our financial sector still remain – <a href="http://www.bankofengland.co.uk/publications/Documents/other/monetary/trendsjanuary14.pdf">lending to companies has not picked up</a>, despite favourable credit conditions and lower funding costs for banks. Banks are attempting to rebuild their balance sheets, which has made them reluctant to lend, and enforce covenants over bad loans. The result: insufficient capital is flowing to high growth potential enterprises.</p>
<h2>Long term, pro-growth policies</h2>
<p>Most of the recent falls in productivity are due to temporary factors such as weak demand and financial sector turmoil. Poor fiscal policy and a failure to adequately address banking problems has exacerbated these problems, but cannot hold back the rebound indefinitely.</p>
<p>This should not make us complacent over productivity. There was a significant gap with our peers prior to the crisis which held back living standards as can be seen in Figure 1. We need to focus on strengthening the foundations of the UK through long-run investments in infrastructure, skills and innovation along the lines set out by the <a href="http://www.lse.ac.uk/researchandexpertise/units/growthcommission/home.aspx">LSE Growth Commission</a>. </p>
<p>Cutting public investment in a depression is bad short-term macro policy as well as foolish long-term growth policy. In political terms it made sense – cuts in investment are bruises that are not usually seen in public. That is, until many years later or, in the case of <a href="http://www.theguardian.com/environment/2014/feb/25/government-flood-spending-uk-statistics-authority">flood defences</a>, when the rain starts falling.</p><img src="https://counter.theconversation.com/content/23865/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The latest data from the ONS show that the UK’s productivity gap with other G7 nations is at its widest since 1992. This bad news comes against the backdrop of increased optimism as the economy seems finally…John Van Reenen, Director, Centre for Economic Performance, London School of Economics and Political ScienceAnna Valero, Research Assistant - Productivity and Innovation, London School of Economics and Political ScienceJoao Paulo Pessoa, Research Assistant - Productivity and Innovation, London School of Economics and Political ScienceLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/225272014-02-07T03:10:07Z2014-02-07T03:10:07ZGovernments play flawed ‘skilled jobs’ guessing game<figure><img src="https://images.theconversation.com/files/40839/original/b2nf6vtw-1391644021.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Hairdressing was once on the Migration Occupation in Demand List, which is again under scrutiny.</span> <span class="attribution"><span class="source">Alan Porritt/AAP</span></span></figcaption></figure><p>Governments in most countries, including Australia, often feel the need to predict which skills will be in demand and match them with increased supply largely through education planning and migration. </p>
<p>It’s a desire that has caused recent controversy, following <a href="http://www.theaustralian.com.au/higher-education/accountant-glut-prompts-skilledmigrant-list-rethink/story-e6frgcjx-1226812384269">calls</a> by the Employment Department for changes to the Skilled Occupation List (SOL).</p>
<p>While intuitively it seems a useful thing to do, workforce planning has a chequered history, particularly with respect to formal modelling, of not being particularly successful. </p>
<p>As my colleague <a href="http://www.awpa.gov.au/publications/Documents/NILS-Additional%20Material.pdf">Sue Richardson</a> of Flinders University has pointed out, even predictions by the Australian Bureau of Statistics (ABS) of the total labour force, which is the measure of total supply, have been found to be quite inaccurate. </p>
<p>In 1999 the ABS forecast the total size of the Australian labour force up to 2008. ABS estimates were short by 750,000 people. If we can’t accurately forecast the total labour supply, how is it possible to actually project individual occupations within the labour market? </p>
<p>Also, there is not a great deal of matching between qualifications, skills and occupations, apart from certain exceptions such as medicine. In most of the skilled occupations only a minority pursue a lengthy career in their field of qualification. Even graduates from the most vocational courses, such as the trades, do not tend to stay in the associated occupation for the whole of their career. </p>
<h2>Choice matters</h2>
<p>The labour market is characterised by a great deal of substitution between occupations and mobility of people between jobs, which makes trying to match people with qualifications to jobs in demand impossible even if the projections of demand were right.</p>
<p>In a democratic society people choose what to study or what job to accept. Governments may feel they know best what’s best for people, but I would argue most people have a fair idea of which courses suit them and of their career aspirations. Take for example the push to make more people do science courses. Students are quite aware that a career in science for most is poorly paid with poor career prospects while a much less “useful” commerce course offers better rewards, and so they vote with their feet. </p>
<p>Although some tradespeople earn high incomes (in line with the urban myth), the average tradesperson’s income is about the same as the average worker and many have lower incomes. The best returns to education and training are, on average, by gaining a university degree.</p>
<h2>Migration needs a long-term focus</h2>
<p>Skilled people wishing to migrate permanently to Australia, with recognised qualifications and English language competency, usually have good career prospects in Australia even if they don’t get work in the exact field they want to on arrival. Adding a particular occupation to the Skilled Occupation List (SOL) is not a bad indicator of where there will be a labour surplus by the time you arrive.</p>
<p>Education, training and permanent migration should be about the long run. The Australian economy has undergone significant structural change over the past three decades. Industries have also embraced new technologies and have become increasingly involved in the global economy. </p>
<p>Much of the changing composition of employment can be attributed to changing industry mix away from “industrial” jobs to the service sectors. Changes in industry composition have combined with technological change to systematically change the demand for skills. It has allowed for, or even driven, a restructuring of occupations within industries. Less skilled workers are more vulnerable, as are manual, younger and older workers. More cognitive, generic and interactive (people) skills are required. </p>
<p>We have experienced the debacle under the old Migration Occupation in Demand List (MODL) of a flood of overseas students (particularly from India) seeking to take IT and accounting courses because it allowed easy access to a permanent visa. </p>
<p>The popularity of vocational courses such as hairdressing and cookery increased dramatically with overseas students since enrolling in a vocational course rather than a Commerce or IT degree became the most cost-effective and assured pathway to permanent residency given another change to the MODL. </p>
<p>Recent changes to the skilled migration program include a new points test, along with a more frequently revised and narrower SOL replacing the much wider and general MODL. The changes are designed to ensure that no one factor alone will guarantee success to potential migrants, but rather a combination of skills, qualifications and experience are required to clear the new pass mark of 65. </p>
<p>Now, failure to meet English language requirements and or work requirements greatly diminishes the prospects of residency. The current system with the SOL list, while an improvement, still has the potential to wreak havoc in Australia’s education export industry because student decisions are driven by migration considerations.</p>
<p>Short-run skill shortages are best met by temporary migration such as working holiday-makers and people on 457 visas. Employers are the best people to know where it is difficult to meet labour shortages through local recruitment and hire people from overseas with relatively quick and cheap immigration processing. </p>
<p>Basing permanent migration on short-term shortages, such as for skilled tradespeople during a mining boom, is precisely what the economy doesn’t need. </p>
<p>Perhaps it’s time to drop the SOL and base permanent migration on recognised qualifications (in general rather than specific areas) and English language competence – the best indicators of employability.</p><img src="https://counter.theconversation.com/content/22527/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>During his career, Phil Lewis has received funding from many private and public sector organisations including most recently the ARC, NCVER, DEEWR and the AFPC.</span></em></p>Governments in most countries, including Australia, often feel the need to predict which skills will be in demand and match them with increased supply largely through education planning and migration…Phil Lewis, Professor of Economics, University of CanberraLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/201362013-12-29T20:13:35Z2013-12-29T20:13:35ZFactCheck: are Australian apprentices ‘disappearing’?<figure><img src="https://images.theconversation.com/files/37745/original/gt5mkwwv-1386913834.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Are traditional trade apprenticeships on the decline?</span> <span class="attribution"><span class="source">AAP Image/Julian Smith</span></span></figcaption></figure><blockquote>
<p><strong>“The previous government oversaw changes to apprenticeship policy and cuts in employer incentives that led to huge drops in the numbers of young people starting an apprenticeship.” - Australian Chamber of Commerce and Industry, <a href="http://www.acci.asn.au/Research-and-Publications/Media-Centre/Media-Releases-and-Transcripts/Growing-Youth-Non-Participation-Highlights-Need-fo">media release</a>, October 30.</strong></p>
</blockquote>
<p>The Australian Chamber of Commerce and Industry has blamed the former government for a fall in the number of young people starting an apprenticeship.</p>
<p>The decline has been <a href="http://www.theaustralian.com.au/national-affairs/policy/labors-legacy-the-disappearing-trainee/story-fn59noo3-1226757692221#sthash.L6OsXoHU.dpuf">labelled</a> in The Australian as “the disappearing trainee” – a legacy of the Labor government linked to its decision to remove employer incentives.</p>
<p>So are Australian apprentices really disappearing?</p>
<h2>Disappearing act</h2>
<p>There are two types of Australian apprentices. There are those who are learning the skills listed on the <a href="http://www.australianapprenticeships.gov.au/national-skills-needs-list">National Skills Needs List</a> – like plumbers, hairdressers and electricians – and those who aren’t. </p>
<p>The National Skills Needs List identifies the areas that are experiencing a national skills shortage.</p>
<p>In October 2012, the Labor government <a href="http://www.australianapprenticeships.gov.au/news/2013-03-12-000000/changes-australian-apprenticeships-incentives-program">reduced the employer incentives</a> for part-time apprentices in non-skills shortage areas. But in August 2013, Labor <a href="http://www.australianapprenticeships.gov.au/news/2013-08-02-000000/august-2013-economic-statement-changes-australian-apprenticeships-incentives-program">removed the financial incentives</a> to non-skills shortage apprenticeships entirely. </p>
<p>This meant there were no longer incentives for apprenticeships in retail positions in food, clothing, information technology, horticulture, printing and for dental assistants. </p>
<p>The thinking was that these areas did not need incentives for formal apprenticeships because, by and large, on the job training would suffice.</p>
<h2>Facts and figures</h2>
<p>The last two years have seen a drop overall in the number of new apprenticeships. But there has been barely any drop in the traditional trade apprenticeships with skill shortages.</p>
<p>Using figures from the <a href="http://www.ncver.edu.au/publications/2693.html">National Centre for Vocational Education and Research (NCVER)</a>, in the first nine months of 2012, there was a reduction in apprenticeships overall from 263,500 to 185,300 in the same period in 2013.</p>
<p>As the first chart below shows, the number of new apprentices dropped by 30% this year when combining the total trade and non-trade apprenticeship figures. </p>
<p>But the drop in “trade” apprentices was not nearly as severe. In fact, it was not severe at all when comparing 2012 to 2013. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/37730/original/xq8v3834-1386911201.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/37730/original/xq8v3834-1386911201.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/37730/original/xq8v3834-1386911201.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=286&fit=crop&dpr=1 600w, https://images.theconversation.com/files/37730/original/xq8v3834-1386911201.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=286&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/37730/original/xq8v3834-1386911201.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=286&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/37730/original/xq8v3834-1386911201.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=359&fit=crop&dpr=1 754w, https://images.theconversation.com/files/37730/original/xq8v3834-1386911201.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=359&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/37730/original/xq8v3834-1386911201.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=359&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">New apprenticeships, trade and non-trade broken down by month for the year to date 2013 and for 2012.</span>
<span class="attribution"><span class="source">NCVER</span></span>
</figcaption>
</figure>
<p>The trade apprentice commencement figures show a decline of a mere 1,900 commencements in the first three quarters of 2013 (71,700), when compared with the first three quarters of 2012 (73,600). </p>
<p>In 2012, the total number of traditional trade apprentice commencements was 95,600. If the December quarter for this year sees another 23,900 traditional trade apprentice commencements, which is feasible, then there will be no downturn in traditional trades. </p>
<p>This graph also shows that the number of apprentices from non-traditional trades – the ones Labor’s changes targeted – were on the decline before the first policy shift in 2012. This tells us that the government’s actions are unlikely to be the sole reason behind the decline in these types of apprenticeships.</p>
<h2>Youth and apprenticeships</h2>
<p>The focus on young people being associated with apprenticeships is a recurring but inaccurate view. The majority of all apprentices (50.27%) were aged 25 years or older in 2012 according to NCVER data. </p>
<p>A little under half are classified as youth. The 2013 figures are not available but this trend is not unusual. </p>
<p>So young school leavers were not particularly affected by the overall downturn in apprenticeships, any more than those over 25 were.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/37744/original/7qkb72d9-1386913742.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/37744/original/7qkb72d9-1386913742.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/37744/original/7qkb72d9-1386913742.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=342&fit=crop&dpr=1 600w, https://images.theconversation.com/files/37744/original/7qkb72d9-1386913742.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=342&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/37744/original/7qkb72d9-1386913742.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=342&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/37744/original/7qkb72d9-1386913742.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=430&fit=crop&dpr=1 754w, https://images.theconversation.com/files/37744/original/7qkb72d9-1386913742.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=430&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/37744/original/7qkb72d9-1386913742.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=430&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The proportion of apprenticeship commencements by age group.</span>
<span class="attribution"><span class="source">NCVER/Author</span></span>
</figcaption>
</figure>
<h2>Verdict</h2>
<p>Under Labor’s watch, there has been a drop in apprentice commencements but only for non-trade apprenticeships. These were on the decline before the employer incentives were withdrawn by Labor, while traditional trade apprentice commencements have remained steady.</p>
<hr>
<h2>Review</h2>
<p>This article is helpful and a fair examination of the evidence. The <a href="http://www.australianapprenticeships.gov.au/publications/shared-responsibility-apprenticeships-21st-century">report</a> of the Expert Panel into Apprenticeships for the 21st Century provides the research behind the policy shift discussed. <strong>- John Buchanan.</strong></p>
<p><div class="callout"> Ever seen a “fact” that doesn’t look quite right? The Conversation’s FactCheck unit asks academic experts to test claims and see how true they really are. We then ask a second academic to review an anonymous copy of the article. You can request a check at checkit@theconversation.edu.au. Please include the statement you would like us to check, the date it was made, and a link if possible.</div></p><img src="https://counter.theconversation.com/content/20136/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>“The previous government oversaw changes to apprenticeship policy and cuts in employer incentives that led to huge drops in the numbers of young people starting an apprenticeship.” - Australian Chamber…Alan Montague, Lecturer, management, RMIT UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/203522013-12-02T03:35:13Z2013-12-02T03:35:13ZSolving Big Data’s big skills shortage<figure><img src="https://images.theconversation.com/files/36074/original/n9skdq9r-1385420255.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The skills required to tap Big Data include statistics, mathematics, computer science and engineering.</span> <span class="attribution"><span class="source">Shutterstock.com</span></span></figcaption></figure><p>According to analyst firm <a href="http://www.gartner.com/newsroom/id/2575515">Gartner</a>, <a href="https://theconversation.com/big-data-and-big-business-its-what-you-do-with-it-that-matters-20543">Big Data</a> is at the portion of the hype cycle called the “peak of inflated expectations”. </p>
<p>The business world is awash with all sorts of claims about the magic of Big Data and how it will transform industries by increasing productivity and profits and opening up opportunities that nobody even knew existed. </p>
<p>But this will only happen if companies are able to hire enough people who actually understand what Big Data is, how to collect it, and preserve it. Computing and analytical skills are also required to get Big Data to reveal its hidden secrets and visualise it in novel ways. And there unfortunately, is the rub. There are just not enough data scientists, people with the required skills to satisfy this unmet demand.</p>
<p>The shortfall in Big Data experts is set to rise and in the UK alone, one digital industries employer body has <a href="http://cloudtimes.org/2013/11/14/new-report-reveals-huge-skills-shortage-for-big-data-specialists/">predicted</a> there will be a need for 69,000 of these experts in the next five years. This claim is not original. Back in 2011, McKinsey & Co was <a href="http://www.mckinsey.com/insights/business_technology/big_data_the_next_frontier_for_innovation">claiming</a> a US shortfall in Big Data experts of 140,000 - 190,000 by 2018.</p>
<p>The shortfall in Big Data experts is being manifested in a number of ways. The first and most obvious is through recruiters casting an ever-widening net in their search for appropriate talent. </p>
<p>There is some agreement that Big Data analysis and data visualisation requires skills in computing as well as statistics and mathematics. This has meant that university graduates with statistics, computer science and engineering have been the main source of potential employees. <a href="http://au.finance.yahoo.com/news/big-data-jobs-outpace-general-030104809.html">Lately</a> this has widened to include subject areas such as astrophysics and computational chemistry.</p>
<p>The demand for Big Data experts has driven a more direct approach to tackling the shortfall problem with industry partnering with universities to create courses, majors and degrees that focus on these specific skills. In Australia, Macquarie University <a href="http://www.itnews.com.au/News/345242,universities-join-race-for-big-data-riches.aspx">will offer</a> a Master’s degree in Data Science. In the US there are a <a href="http://www.informationweek.com/big-data/big-data-analytics/big-data-analytics-masters-degrees-20-top-programs/d/d-id/1108042?">number</a> of universities that offer postgraduate degrees in disciplines that cover skills required for Big Data professionals.</p>
<p>Even MOOC provider Udacity has partnered with Big Data database provider Cloudera to put on <a href="http://finance.yahoo.com/news/cloudera-udacity-partner-address-big-133000137.html">specific courses</a> on Big Data. Rival MOOC provider Coursera, has <a href="https://www.coursera.org/courses?orderby=upcoming&search=big%20data">three</a> Big Data related courses available.</p>
<h2>Think first</h2>
<p>In the midst of the Big Data hype, some clear notes of sanity have come from an unexpected quarter. UK supermarket giant Tesco has <a href="http://www.v3.co.uk/v3-uk/news/2302366/tesco-dismisses-big-data-skills-shortage-as-uk-universities-churn-out-talent">claimed</a> it has no problems hiring graduates with the right skills. Basically its strategy is to look for smart people who may be mathematicians, scientists or engineers. </p>
<p>Surprisingly enough, this vindicates the long-held belief that universities should first and foremost produce graduates who are equipped with the ability to think, apply those thoughts and solve problems. </p>
<p>Although over-emphasised by some in industry, product or technology specific skills are largely useless. By the time universities mobilise to refactor their courses to the latest hyped technology and graduate students with those skills, the world will have moved on to the next “Big” thing.</p>
<p>Big Data is real and some of the challenges it poses will need to be solved by scientists and engineers and mathematicians in the coming years. Setting aside truly massive data being generated by radio astronomy and some other fields of science, we are actually mostly there in terms of having techniques and technology that allows us to process and make sense of Big Data. Underlying this all however are the general skills required to handle and make sense of all data, big and small. These skills still rely on knowledge of basic mathematics, statistics, science and computing.</p>
<p>What the interest in Big Data has done is to highlight to companies the importance of data generally. It’s not as though companies have never looked at data analytics before, they simply may not have recognised its central importance to the business, nor understood what the data has been trying to say for years. The task is to convince them that universities are already producing graduates with the right skills and answers, industry only needs to ask the right questions.</p><img src="https://counter.theconversation.com/content/20352/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>David Glance works for a university that benefits from the provision of graduates to industry.</span></em></p>According to analyst firm Gartner, Big Data is at the portion of the hype cycle called the “peak of inflated expectations”. The business world is awash with all sorts of claims about the magic of Big Data…David Glance, Director, Centre for Software Practice, The University of Western AustraliaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/64282012-04-26T04:10:30Z2012-04-26T04:10:30ZManaging the mighty structural forces unleashed by the mining boom<figure><img src="https://images.theconversation.com/files/9927/original/dv7r645f-1335252823.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Australia's mining boom is both a boon and a bane to our economic development.</span> </figcaption></figure><p>Australia’s stark comparative advantage in mining is both a boon and a bane to our economic development. Investment in the mining industry as a share of Australia’s GDP has already reached unprecedented levels and looks set to double in coming years. </p>
<p>The mining industry is almost single-handedly responsible for Australia experiencing close to trend annual growth while the rest of the developed world languishes.</p>
<p>Yet the mining boom unleashes mighty structural forces that bear down on the Australian economy. A strongly appreciating Australian dollar - driven by high commodities prices and strong demand for Australian mineral exports - undermines the competitiveness of non-mining export activities, including manufacturing and services exports, and encourages local consumers to prefer imports over locally-sourced goods and services.</p>
<p>Shortages of skilled labour – in fact, any labour at all – in mining regions drives wages and salaries to stratospheric levels, in turn bidding up prices for accommodation, food and local services. This makes life very difficult for individuals and families who do not benefit directly from inflated incomes and yet also face inflated prices for basic goods and services in regions affected by the mining boom.</p>
<p>Broadly speaking, investment has moved from the south and east of Australia, where most people live and work, to the north and west of the continent, where most of the mineral wealth lies. There is a parallel movement of capital away from low-productivity sectors like manufacturing and retail trade towards high-productivity mining and related services. This is not only to be expected but also welcomed, as Australia struggles with declining average productivity levels.</p>
<p>How we cope with the changing pattern of demand for labour, especially skilled labour, will determine how well we manage the mining boom. Ways must be found simultaneously to meet the needs of the mining sector and to ensure that the non-mining sector realises improvements in efficiency and productivity sufficient to allow it to survive the boom.</p>
<p>Indeed, this is the non-mining sector’s best hope: that productivity levels can be raised so that labour is released to serve the mining industry without harming output levels in the rest of the economy.</p>
<p>It’s not only the economic fabric that is stressed and strained by the booming sector “problem”. Social challenges also arise when investment and jobs move away from where people live and community life is established. One trend is the rapid take-up of “fly in/fly out” (FIFO) employment patterns. </p>
<p>One respondent to a recent Senate inquiry expects FIFO employment to increase six-fold over the next 20 years, while relocation and local recruitment will barely double.
FIFO might represent a handy way to avert the cost of relocating workers and their families to remote regions, but it comes at a cost to family relationships and community life more broadly. </p>
<p>It also stymies the broader economic development of the regions blessed - or cursed - with mineral wealth. It is the equivalent at a local level of wholly imported capital and labour working the mines in Africa, leaving local residents with little if anything to show for their “development” apart from higher food prices.</p>
<p>There are numerous alternatives to FIFO as a means of closing the geographic and skills gaps opened up by the mining boom. In a recent report entitled <a href="http://www.deloitte.com/view/en_AU/au/news-research/luckycountry/whereisyournextworker/index.htm">Where’s your next worker?</a>, Deloitte explored twelve alternative strategies for bringing workers to jobs and jobs to workers.</p>
<p>Promoting the use of shared services is clearly one of them. This includes but is not limited to offshoring. “Near-shoring” - that is, accessing shared services providers located interstate within Australia rather than overseas - can often be a more competitive alternative when full account is taken of management costs and cultural differences. Either way, there is a pressing need for productivity improvements in the non-mining sector as there is for services to be supplied to the booming mining sector, and shared services models help to satisfy both needs.</p>
<p>Beyond shared services, there are other ways to augment the supply of skills without moving local workers around so much. Boosting skilled migration must continue as a priority and, in this vein, the government’s recently announced US–Australia Bilateral Employment Initiative is to be welcomed. Here is a way of tapping unemployed or underemployed tradespeople in the United States for short-term employment in Australia, where demand outstrips supply.</p>
<p>“Crowd-sourcing” skills is yet another and more innovative solution. Digital communications and social media are in their infancy, yet the potential for tapping expertise over the internet is huge. Australian internet start-up, <a href="http://www.kaggle.com/">Kaggle</a>, is just one example of what is possible, where technical problems are thrown to the crowd with little more than the thrill of the challenge offered by way of motivation.</p>
<p>Other solutions include enhancing opportunities for retirees, home-based carers, people with disabilities and indigenous Australians to participate more actively in the paid workforce. In the case of indigenous Australians, at least one of the gaps – the geographic gap – is generally already closed. But others, including skills and disadvantage, still loom large.</p>
<p>More can be done to improve employee engagement as well as re-engineering jobs so that workers are more effective in what they do. </p>
<p>Delivering more and better skilled labour is not just about moving workers around, although this will be part of any solution. </p>
<p>Importantly, measures which improve the productivity of the existing workforce, including at a distance from the workplace, will help resolve the tensions born of our prodigious mineral endowment.</p>
<p>The measure of how successfully we manage the mining boom is how well we respond to the resulting structural pressures placed on labour markets.</p>
<p><em>Ian Harper is a Partner at Deloitte and a director of Deloitte Access Economics Pty Ltd. This formed part of an address Ian gave at the <a href="http://www.sharedservicesweek.com.au/Event.aspx?id=570294">Shared Services & Outsourcing Convention</a> in Melbourne.</em></p><img src="https://counter.theconversation.com/content/6428/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ian Harper is a Partner with Deloitte Access Economics.</span></em></p>Australia’s stark comparative advantage in mining is both a boon and a bane to our economic development. Investment in the mining industry as a share of Australia’s GDP has already reached unprecedented…Ian Harper, Professor Emeritus, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.