Mike's Minute: Why the increased cost of labour will hurt our economy

The Mike Hosking Breakfast

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21h ago 2:18

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In America at the moment there is a lot of talk about the “K” shaped economy.

Car dealers see it. If you have a good, safe job, good income and you're in the markets invested in AI (before it all pops) you are feeling good.

You are the upward bit of the “K”. You're buying a flash new car with carbon add-ons.

If you've been laid off, or about to be by a robot, you hate AI because you never earned enough to buy stock anyway and your SNAP payment hasn’t come through because of the shutdown and you're holding onto your car, not to mention sweating on making ends meet, you are the downward bit of the “K”.

It looks like we have a similar story here. Recruiters Robert Walters are already warning of the increased cost of labour in the recovery because people with the skills that are going to be in demand can charge more.

Why?

Because we are short of them. Why? Because the others are in Australia.

In ideal times, as an economy recovers you hoover up those who have lost their jobs when times were tight.

This time anyone who was marketable left and what we have, sadly, are a group of people who it would appear are not available to take part as growth returns.

Yes, there are plenty of unemployed – 5.3% as of last week. Not to mention a growing number of so-called "underutilised". But as far as skills go, that’s where we have an issue.

Not everywhere or everyone of course. But it's becoming increasingly obvious that there are too many under-skilled, under-qualified people in this country.

That is sadly what eventuates when you have system that spits kids out at 15, 16, or 17-year-old without a pathway to success.

When times are good any number of people get swept up for bits and pieces-type jobs that lots of employers can afford to fork out on.

But they are also the first to go. And when the rest of the talent bails, the ones without the skills aren't the ones to fill the growth areas, hence we will once again rely on imported labour, which this time around may or may not be available depending on whether they see us as a cool place to be.

If they don’t, that weighs on recovery and the speed at which we pick up.

Robert Walters seem to suggest it's an issue.

For those who stayed and have the skills though, you will be in a new car before you know it.

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Mike's Minute: Why the increased cost of labour will hurt our economy

The Mike Hosking Breakfast

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published 21h ago