The fixable problem that would boost wages and deliver $9b extra for economy

Almost half of Australia’s permanent migrants are working below their skill level and the failure to better utilise that knowhow is costing the economy $9 billion a year.

Despite the critical skill shortages in many sectors of the Australian economy, more than 620,000 permanent migrants are working in jobs that do not fully use qualifications obtained from their country of origin, according to Deloitte Access Economics research.

If migrants were able to get jobs that matched their skills at the same rate as Australian-born workers, it would boost annual gross domestic product by 0.5 per cent, or an average of $9 billion a year over the next decade, the modelling found. Discrimination against migrant workers was identified as one barrier to greater utilisation of knowhow.

About 44 per cent of permanent migrants are working below their qualification level, sapping the economic output of every state and territory.

‘I’m a little hurt inside’

Fatin Alrawi completed a bachelors degree in civil engineering in Iraq, a masters in civil engineering in Malaysia and was undertaking doctoral studies in her field when she migrated to Australia with her family in 2001. But she has never worked as an engineer in this country. After doing a bridging course that allowed her to practise in Australia, Alrawi spent five years unsuccessfully looking for paid work in her occupation.

She recalls being told “with your hijab, no one will hire you”.

Fatin Alrawi has not been able to use her engineering qualifications since migrating to Australia. Credit: Photo: Janie Barrett

Alrawi eventually gave up on engineering and is now employed as a community worker with Western Sydney MRC.

“I have a very rewarding job but when I think about engineering I’m a little hurt inside,” she said.

“It felt like having a hijab and an accent makes people judge you; it’s not about your qualifications, it’s about how you are looking or how you are talking ... I want people to know that an accent shows resilience, fortitude and determination. It means I can speak multiple languages. An accent is a sign of intelligence, not ignorance.”

Alrawi lives and works in western Sydney, a regional economy that would benefit disproportionately from unlocking the full skills potential of its large migrant population.

Reducing the barriers migrants face to fully utilising their skills “should be a national priority”, says the research commissioned by Settlement Services International, Allianz Australia, Business NSW, Business Western Sydney and LinkedIn.

Migrants often find it difficult to get their overseas qualifications recognised, and the report calls for improvements in the way these credentials are assessed.

The research says more investment is needed to build English proficiency among newly arrived professionals. It also calls for policies to reduce barriers to employment for female migrants, who experience higher rates of unemployment and lower rates of workforce participation than male counterparts.

Migrants frequently experience discrimination when looking for work. “Bias within the labour market is a key barrier that needs to be addressed,” the report says.

Business Western Sydney executive director David Borger said reforms to support migrants to work at their full potential would result in a more inclusive, prosperous and cohesive society.

“This isn’t just an economic issue; it’s a human one,” he said. “These are people striving for a better life, contributing to our communities, and dreaming of opportunities that match their capabilities.”

The human face of this issue: Fatin Alrawi trained as an engineer in Iraq.Credit: Janie Barrett

Borger said unlocking the full potential of migrant workers demanded a “unified effort from industry and government”.

Even though Australia’s permanent migration program focuses on attracting qualified professionals from overseas, the study found almost six in 10 underutilised permanent migrants had entered via that skilled stream.

The modelling found about 51,000 full-time jobs would be added to the economy if permanent migrants worked in jobs that matched their skills at the same rate as Australian-born workers. Wages would increase for migrant and non-migrant workers alike.

“Industries that would see the greatest increase in employment from harnessing the skills of
migrant workers are professional services, public administration and education,” the report says.

The economy of every state and territory would be boosted if migrant skills were better utilised.

Migrants working in retail, administrative and support roles and hospitality are the most likely to have skills that are underutilised.

Recent migrants are 1.7 times more likely than the Australian-born workforce to hold a university-level qualification. Of the permanent migrant intake over the past 15 years, 53 per cent had a higher education degree at bachelor level or above, compared to 32 per cent of the Australian-born working age population.