Catch and skill our own

ONE of the fears you hear in the debate over asylum seekers is that Australia is being flooded by refugees. Well, fear not. Australia is being flooded by new arrivals but they're not refugees.

The people flooding into Australia are primarily foreign workers, being recruited here to fill skills shortages. Why? Because it's cheaper to bring in foreign workers who already have skills than to train our own.

Last year 508,000 people arrived to live in Australia as permanent residents, temporary workers or students. Just over 13,000 of them were refugees, or about one in 40. Even if all the asylum seekers arriving by boat were counted, the 2726 of them would make up about one in 200 of the arrivals.

There is a bigger issue here. In my view, it's also a simpler issue than what to do about asylum seekers (which, frankly, I think is one of the most difficult policy issues I've ever come across, with every option breaking one or other principle of good government).

That issue is Australia's policy of relying on importing foreign workers to provide us with the skills we need, rather than doing all it can to ensure that Australians are trained in the skills we need.

It has a parallel with our reliance on foreign capital. Australia is one of the richest countries in the Western world, yet one of the poorest savers. Despite our wealth, every year we are in the bottom half of the OECD in savings rates. That's why our net foreign debt is now $654 billion, and doubling every eight years. As the International Monetary Fund and many others have pointed out, our reliance on foreign borrowing is a risk to our economic future. But our reliance on foreign skilled workers is a risk to something even more important: our social fabric, and our sense of national unity.

For while Australia is importing hundreds of thousands of workers every year, Governments, both Liberal and Labor, have remained silent on the insidious slow growth of men dropping out of the workforce in the prime of their lives.

In the 1960s, the last decade in which we had full employment which, while some economists seem to have forgotten, means that more or less everyone who wants to work can find a job only 2 per cent of men aged between 25 and 54 were outside the workforce. Roughly speaking, 96 per cent of prime age men had a job, 2 per cent were unemployed, and 2 per cent were either unemployable or doing something else.

But in the 1960s, jobs were simple and wages were low. Married women were mostly tied to the home, so men faced less competition for jobs. Heroin was rare, expectations of life were simpler, and fewer people needed psychologists.

Fast forward to 2009. Bureau of Statistics figures show that last year almost 10 per cent of men in the prime of their working lives aged 25 to 54 were not even looking for work. Only 4 per cent were unemployed, but 14 per cent of those of prime age were not working.

Among women the same age, twice as many were not working: 28 per cent of all women aged 25 to 54. But no one asks the questions that would tell us how many of them were not working because they preferred to be full-time mothers, and how many had dropped out for reasons similar to the men. It seems safe to assume that the problem of people outside the workforce is as widespread among women as among men.

You think these are global problems? Yes, but a report released by the OECD last week suggests Australia has been handling them worse than other Western countries.

The OECD's Employment Outlook reports that in 2009, 21 per cent of Australians in that prime working age group were unemployed or outside the labour force. Of the 27 OECD countries the IMF terms "advanced" that is, part of the rich world Australia ranked 20th on that key indicator. Switzerland was top, with only 13 per cent of its prime working age people not in jobs.

Broadly speaking, over the past 10 years, employment rates have risen for older workers, but fallen for men of prime working age. But do you ever hear any minister talk about it? The Treasury? The Reserve Bank? The Productivity Commission? Why is no one in government asking why so many people in the prime of their working life are dropping out of the workforce and what we should do about it?

But that's not the only weakness in Australia's labour market. The OECD says that while Australia's unemployment rate last year was the eighth lowest among its 30 members (not the lowest, as ministers sometimes claim), "overall slack in the labour market is actually higher than the OECD average".

The reason is not only the millions of people not in the workforce, but also the more than 800,000 people the bureau classifies as underemployed part-time workers who want more work, usually full-time work.

"Even before the current downturn, Australia had amongst the highest rates of involuntary part-time employment in the OECD", the report points out. "More than 60 per cent of involuntary part-time workers have no post-school qualifications, and one-third of them are aged under 25."

These are young people falling through the cracks, without the skills to hold down a good job, and many may lack the desire or self-discipline to get them. These are the kids most at risk of joining those who have dropped out of the workforce.

Shouldn't this be the kind of issue our political leaders talk to us about? Shouldn't this be an issue they tackle?