Creative Innovation 2017 (Ci2017)

Unskilled and highly skilled are doing well, not so those in the middle

Monday, 7 May 2018

The Australian
Bernard Salt

Parents take note: the growth area in jobs is for knowledge workers.

There are few more important parts of the census than the questions that relate to work. And the reason is simple enough. For many Australians, quality of life is largely determined by the income-effort equation that comes with work. The more skilled a person is, the higher the income; the less skilled, the lower the income.

The boffins at the Australian Bureau of Statistics have classified all 1300 occupations that comprise the Australian workforce into five skill levels.

The highest requires years of technical and/or academic training and includes, for example, doctor and engineer. The lowest requires no formal training and includes, for example, cleaner and sales assistant.


The highest number of workers (31 per cent) fit into the second lowest skill level, which includes truck driver and barista. The fewest workers (14 per

cent) fit into the second highest category, which includes police officer and chef. In the five years to the 2016 census the number of Australians in the workforce (as measured by the census) increased by 620,000 in net terms.

About 46 per cent of job growth (290,000 jobs) during this period was in the highest category.

Knowledge workers and highly skilled workers comprise less than one-fifth of the workforce, yet this skill set commandeers almost half of all new jobs.

If ever evidence was required to show the way disruption is skewing the workforce towards knowledge work, it is the accompanying table showing job growth by skill category.

The top two skill categories (levels one and two) captured 59 per cent of job growth in this period. The two lowest categories (levels four and five) captured 39 per cent of net new jobs. This leaves middle-ranking occupations (level three, including electrician and butcher) to soak up the remaining 1 per cent of job growth.

Here is evidence of the polarisation of the workforce or perhaps of the hollowing out of job options for middle Australia. The message is clear:

skill up or subside into a world of low skills and poor remuneration . The median income for full-time jobs classified as skill 1 at the 2016 census was $89,000, almost double the equivalent figure for skill level 5 jobs ($46,000).

The point is that there is fast growth in jobs at both ends of the skills spectrum. At the upper end the number of jobs for nurses (surgical and critical care) and chief information officers almost doubled between the censuses. This shift in the minutiae of occupations highlights our ageing, as well as our embrace of health and wellness and of all things data driven.

At the other end of the spectrum there are rapidly expanding opportunities for domestic cleaners (maybe cleaning the houses of skill level 1 workers) and kitchen hands. The demand for low-skilled jobs increased by 130 per cent between the censuses in the case of domestic cleaners and by 17,000 jobs in the case of kitchen hands.

It would seem that the prosperity and success of skill level 1 is creating opportunities for work among skill level 5. Busy skilled people hire domestic cleaners and they support kitchen hands by eating out at cafes. The working rich and the working poor do, in fact, meet in the home of well-to-do cleaning clients and in the fashionable cafes that are popping up in shopping strips across Australia.

The really confronting aspect of this perspective of the census is that there is no discernible difference between the hours worked by full-time workers at each end of the skill spectrum. Skill level 1 workers work 45 hours a week while skill level 5 workers work just two hours less a week for little more than half the income.

But this is confronting only if the workers at the lowest end of the skill spectrum are aged 30-plus and are trying to support a family. Here are crystallised the full-time working poor, defined as workers working 40-plus hours a week for a median income of barely $46,000 a year. And this would be the situation for some of the 1.7 million workers in this category.

But there is another perspective to the apparent hollowing out of the Australian workforce. And that’s the theory that the skill stratification of jobs enables young workers to come into the workforce and transition across time into more skilled jobs. It’s the trickle-up effect where workers steadily improve their position and prospects. Every job teaches something — including working as a kitchen hand, which teaches young workers to turn up on time, to get along with colleagues and to do a job to a required standard.

The problem is where some workers end up being trapped within the precarious world of low-skilled work. A 22-year-old university student working parttime as a kitchen hand is a very different proposition to a 45-year-old immigrant with poor English skills working as a kitchen hand by necessity. It is also possible that some low-skilled workers — say domestic cleaners — use their modest incomes to augment a household income primarily supported by a higher skilled partner. In this situation the kitchen hand or domestic cleaner job funds the luxuries that give great pleasure to middle-Australia households.

There is another lens through which this skill stratification of the workforce can be viewed. And that’s by geography. Canberra and Sydney, as well as other capitals to a lesser degree, have the highest proportion of skill-level 1 jobs: 41 per cent in Canberra, 36 per cent in Sydney. These cities are a world away from places such as Murray Bridge and Lithgow, where the highly skilled level 1 jobs are held by between 13 per cent and 16 per cent of the workforce.

Low-skill level 5 jobs peak in places such as Griffith, Colac and Murray Bridge, where between 28 per cent and 32 per cent of jobs fall into this classification.

Regional cities that attract a relatively high proportion of highly skilled (level 5) workers include Gisborne near Melbourne and Bowral near Sydney (both are retreats for professionals), as well as places such as Ballina

(lifestyle) and Broome and Orange (public sector towns). Low-skilled workers cluster in towns where the public sector is largely absent and which are not recognised as lifestyle destinations.

The world of work can be sharply divided between the skilled and the unskilled, the city and the regions, the public and private sectors, and the well remunerated and the battlers. But this world of work also is being reshaped by powerful external forces that are demanding more and increased levels of skills.

I am tempted to recommend to every parent that the best thing they can do for their kids is to ensure they complete some form of further education or technical training. But this is self-evident and it is the way the workforce is skewing anyway. The thing that I think the future workforce needs

— in addition to skills — is the ability and the adaptability to learn new skills. And to this mix of ideal skills required by the future worker I would add a dash of ambition and a dollop of resilience.

And that’s because there is a pathway to a good quality of life in Australia for workers from average or even humble backgrounds

— it’s the ability to come into the workforce at skill level 5 and work your way up to skill level 1.

That takes persistence, hard work, training, resilience and the ability to identify and adapt to new circumstances and opportunities.

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