Australia's migration system, long touted as a solution to the nation's skills shortages, is increasingly under scrutiny for failing to deliver the high-skilled workforce it promises. Despite the narrative of a persistent skills crisis, recent data and analyses reveal that the system is flooding the labour market with low-skilled workers, exacerbating issues like underemployment, wage suppression, and infrastructure strain, while doing little to address genuine skill gaps.

The Myth of the Skills Crisis

Earlier this year, claims of a skills crisis were amplified by reports such as the Hays 2025 Skills Report, which suggested businesses were struggling to find workers with the right expertise. However, recruitment data from Jobs & Skills Australia paints a different picture. Employers are now finding it significantly easier to recruit, particularly for low-skilled roles. Charts from economist Justin Fabo at Antipodean Macro illustrate that the difficulty in finding workers has nearly returned to pre-pandemic levels, with low-skilled workers in oversupply, while high-skilled workers remain relatively scarce.

This imbalance highlights a critical flaw in the migration system: the majority of so-called "skilled" migrants are not filling high-skill roles. Instead, many are employed in low-productivity sectors such as retail, hospitality, and service management, often in jobs well below their qualifications.

Underemployment and Wage Shortfalls Among Migrants

The Committee for Economic Development of Australia (CEDA) analysed census data and found that "skilled" migrants are persistently underemployed and underpaid. CEDA's senior economist, Andrew Barker, noted that recent migrants earn significantly less than Australian-born workers, with the wage gap worsening over time. Many migrants, despite being selected for their expertise, work in roles that do not utilize their skills. This underutilisation is a drag on productivity, with CEDA suggesting that the migration system may be contributing to Australia's sluggish productivity growth.

Deloitte Access Economics further quantifies the issue, estimating that 44% of permanent migrants, approximately 621,000 individuals, are working in roles below their skill level as of 2024. Of these, 60% (around 372,000) entered through the skilled migration stream, a program designed specifically to address labour shortages with qualified professionals. Similarly, the 2023 Migration Review found that 51% of overseas-born university graduates with bachelor's degrees were employed in unskilled jobs three years after graduation. Adelaide University's George Tan reported that 43% of skilled migrants on state-sponsored visas were not working in their declared occupations, often taking up low-skill jobs in retail and hospitality.

The Graduate Outcome Survey reinforces these findings, showing that international graduates earn less and face worse labour market outcomes than their Australian-born counterparts. These statistics paint a clear picture: Australia's migration system is failing to integrate skilled migrants into roles that match their qualifications.

Economic and Social Consequences

The influx of low-skilled workers through the skilled migration stream has broader implications. It contributes to wage suppression, particularly in low-productivity sectors, and exacerbates infrastructure and housing shortages. The environmental toll of mass migration, including urban congestion and resource strain, is also significant. Moreover, the system deprives developing nations of talent, as skilled individuals leave their home countries only to be underutilised in Australia, except for the demographic Great White Replacement.

The federal government's 2023 Migration Review and other reports, indicate that the current system is not delivering the promised economic benefits. Job advertisements, while still above pre-pandemic levels, have fallen sharply from their peak, and employers are increasingly cutting staff rather than expanding headcount. This suggests a cooling labor market, further undermining the argument for mass migration to address skills shortages.

A Path Forward: A Smarter Migration System

To address these structural flaws, Australia needs a migration system that prioritises high-skilled, high-income workers who can immediately contribute to the economy in their fields of expertise. Key reforms include:

Raising the Wage Floor: Set a minimum salary threshold for skilled visas well above the median full-time salary (currently around $90,000) to ensure migrants are employed in high-value roles.

Mandatory Employer Sponsorship: Require all skilled visas to be employer-sponsored, ensuring migrants are placed in jobs that match their qualifications from the outset.

Eliminating Non-Essential Visas: Abolish retirement visas, such as parental and "golden" tickets, which do not contribute to addressing skill shortages.

Reducing Overall Migration Numbers: Shift toward a smaller, more targeted migration program that prioritises quality over quantity.

Get some national pride and train locals, the superior option to migration.

Australia's migration system, as it currently operates, is not delivering the skilled workforce it promises. Instead, it is flooding the labor market with underutilised workers, contributing to low productivity, wage shortfalls, and infrastructure strain. By refocusing on high-skilled, employer-sponsored migrants and setting stricter income and employment criteria, Australia can create a migration system that truly addresses its economic needs while minimising social and environmental costs. The evidence is clear: a smaller, smarter migration program is the path to a more prosperous and sustainable future. The time to train local Aussies for the eternal skills shortage, pushed by the globalists, as an ideological justification for mass immigration for demographic replacement, is now!

https://www.macrobusiness.com.au/2025/07/australia-stuffed-full-with-low-skilled-workers/