A FOCUS ON SKILLS WILL ALLOW

AUSTRALIA TO REAP FRUITS OF ITS LABOUR

PROFESSOR JEFF BORLAND SUGGESTS HOW AUSTRALIA CAN RE-SKILL
ITS
WORKFORCE, AND BUSTS some MYTHS ON IMMIGRATION AND
JOBS
any economic commentators with an interest in

labour markets seem bedevilled by a bogeyman:

the rise ofAsia.
Whatever the problem that has arisen in labour markets

employment in Australia. Only within a subset of St

that use labour-intensive production methods
as textiles, clothing and footwear ~ can relatively

adverse employment effects ofgrowing competitior

imports be seen.

in Australia in the past 20 years, the elfect of increasing

integration with Asia has usually been the explanation

that is reached for First.
Declining real earnings for lowskilled workers? Well,
that must be the efiect of more imports produced using
lowwage labour in China.
Higher rates of unemployment? Mmm, that could
only be happening because of higher rates of Asian
immigration.
Falling employment of clerical workers and middle
managers? Surely that has to be the result ofolf-shoring
jobs to the Indian IT sector.

WHERE'S THE EVIDENCE?

IMMIGRANTS DON'T TAKE JOBS

The story with immigration has been similar
Junankar and Glenn Withers showed in a series ofres

papers written in the 19905 that immigration has

net effect on the labour market in Australia. An
immigrant may mean an extra job is needed, but 2

means an extra source of demand for goods and se

produced in Australia. So, the effects on labour de

and labour supply largely wash out.

And while stores ofcall-centre and IT processin
being sent offshore to Asia may make interesting re
For the supplement sections ofour weekend newsp;

it just doesn't seem that the magnitude of these e

In some ways, this focus on Asia is understandable.

Signs of our closer integration with Asia are all around

are substantial enough to make a big difference to 14

markets. Instead, it is technological change that ap

population, in all the talk ofa mining boom, every time

we buy a whitegood. Yet for all the concern, there is very

administrative jobs.

us in the changing composition of the Australian

little evidence that integration with Asia is having the

dire effects often described.
Studies of international trade undertaken by the
Reserve Bank and Productivity Commission have

24 E Australia's Fnoaoempni with Am

to be the main driver ofthe decline in clerical and

FIRST PRINCIPLES
The story of Australias increasing integration
Asia, in fact, seems to be very much as you would pi

from a knowledge of rstyear economics.

Ir(Inr I... (--Z.L

Jll

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