Fabrizio Carmignani Associate Professor, BCom Programme Director (Nathan) Economics, Griffith Business School EMPLOYABILITY TRENDS
Plan of campaign Some background on employment projections Australia medium term economic outlook Employment outlook» By occupations» By sectors» Queensland Education and employability» Skill level requested by job market» Wage premia» The job market of bachelor degree graduates
Employment projections: some background Employment trends depend on two key dynamics:» Supply side: composition of labour force by size and skills» Demand side: activity of firms/sectors. In the current economic context, demand side dynamics play a critical role and are (probably) more difficult to predict than supply side dynamics For Australia, the medium-term economic outlook is still relatively solid Resilient demand side dynamics» While aggregate dynamics might look favourable, there are significant differences across sectors
Australia medium term economic outlook* Macroeconomic indicator Projection 2013-2018 (annual average) Real GDP growth 3.14% Inflation rate 2.5% Export growth 5.6% Unemployment rate 5.1% * Data from the World Economic Outlook of IMF (April 2003)
Employment outlook Consistently with the medium term economic outlook DEEWR projects employment to grow by 820,100 units (or 7.1%) over the five years to November 2017» This is equivalent to an average annual increase of 164,000 units and it is line with trends in employment growth since mid 1990s 14 Employment in millions 12 10 8 6 4 2 0 1980 1985 1990 1995 2000 2005 2010 2015 2020 Year
Employment outlook: occupations Increase in units by occupations - Nov 2012 to Nov 2017 Occupations Increase in 000s Labourers 49.8 Machinery Operators and Drivers 53.6 Managers 79.8 Technicians and trades workers 85.4 Sales Workers 90.4 Clerical and administrative workers 92.7 Community and personal service workers 121.0 Professionals 247.4
Employment outlook: occupations Top 10 growing occupations (in levels) Nov 2012 to Nov 2017 Occupation Increase in 000s Sales Assistants 45.5 Aged and Disabled Carers 31.3 Accountants 21.4 Advertising and sales managers 21.1 Receptionists 18.5 Contract, program, and project admin. 17.1 Office managers 16.2 Child carers 15.5 Inquiry Clerks 14.8 Primary School Teachers 14.3
Employment outlook: occupations Top 10 growing occupations (in percentage) Nov 12 to Nov 17 Occupation Increase in % Corporate Service Managers 111% Economists 90.2% Funeral Workers 84.6% Textile and footwear production machine operators 34.3% Information and organisation professionals 34% Multimedia specialists and web developers 33.2% Life Scientists 31.4% Special care workers 29.5% Aged and disabled carers 27.7% Driving instructors 27.4%
Employment outlook: sectors Economic dynamics significantly differ across sectors. These differences are reflected in sectoral employment trends Increasing demand for child care, the impact of the National Disability Insurance Scheme, and progressive ageing population make Health Care and Social Assistance the primary provider of new jobs over the short, medium, and long-term. Low interest rates and strong consumers confidence sustain domestic demand and lead to strong employment growth in the Retail Trade sector
Employment outlook: sectors Recovery in dwelling investment and high levels of consumers and business confidence will boost employment in Construction after five years of stagnation The increase in the domestic day-to-day use of cafes, restaurants, and takeaway food services causes a increase in demand for Accommodation and Food Services in spite of the strong Australian dollar (which somewhat reduces tourists demand for these services). On the other hand, structural changes and a strong Australian dollar weaken the pace of activity in Agriculture, Forestry and Fishing and (to a lesser extent) Manufacturing. These factors adversely impact on employment trends.
Employment outlook: sectors Industry Projected employment growth to November 2017 5 years to Nov 17 (%) 5 years to Nov 17 ('000) Agriculture, Forestry and Fishing 4.2 13.5 Mining 4.3 11.5 Manufacturing 1.5 14.2 Electricity, Gas, Water and Waste Services 2.2 3.3 Construction 10.1 100.2 Wholesale Trade 3.7 15.5 Retail Trade 8.9 109.1 Accommodation and Food Services 8.5 66.8 Transport, Postal and Warehousing 7.1 41.6 Information Media and Telecommunications 4.2 9.6 Financial and Insurance Services 3.8 16.1 Rental, Hiring and Real Estate Services 5.6 11.1 Professional, Scientific and Technical Services 6.9 62.8 Administrative and Support Services 6.6 26.1 Public Administration and Safety 6.3 43.2 Education and Training 7.2 64.5 Health Care and Social Assistance 13.0 177.8 Arts and Recreation Services 10.0 21.8 Other Services 8.5 38.5 All Industries 7.1 820.1
Employment outlook: Queensland DEEWR projects employment in Queensland to increase by 222,300 units in the period 2011-12 to 2016-17 Area Increase in employment ( 000s) QUEENSLAND 222.3 Brisbane 94.2 Brisbane City Inner Ring 29.0 Brisbane City Outer Ring 24.4 South and East Brisbane 19.0 North Brisbane 14.1 Ipswich City 7.7 Queensland Regional 128.1 Sunshine Coast 20.7 West Moreton 4.3 Gold Coast 23.7 Wide Bay-Burnett 12.8 Mackay-Fitzroy-Central West QLD 27.0 Darling Downs-South West QLD 16.5 Northern-North West QLD 15.5 Far North QLD 7.4
Employment outlook: Queensland In line with the national trends, the largest increase in employment is expected to occur in Health Care and Social Assistance and Construction. Other sectors that will experience a large increase in employment are: Mining, Professional, Scientific, and Technical Services; Transport Postal and Warehousing, Retail Trade, and Education and Training. A loss of jobs is instead expected in Manufacturing. Agriculture will do better than the national average (i.e. no loss of jobs), but still unable to generate any new jobs.
Employment outlook: Queensland Sector Increase in employment ('000s) Agriculture, Forestry and Fishing 0.3 Mining 28.9 Manufacturing -7.0 Electricity, Gas, Water and Waste Services 4.4 Construction 36.9 Wholesale Trade 3.1 Retail Trade 15.9 Accom and Food Services 6.6 Transport, Postal and Warehousing 16.5 Information Media and Telecomms 1.8 Financial and Insurance Services 4.1 Rental, Hiring and Real Estate Services 1.8 Professional, Scientific and Technical Services 25.1 Administrative and Support Services 6.9 Public Administration and Safety 6.5 Education and Training 15.1 Health Care and Social Assistance 52.4 Arts and Recreation Services -0.4 Other Services 3.5 All Industries 222.3
The job market value of education We all know that education is an investment The return on this investment is obtained along two dimensions: 1. Better employability opportunities 2. Higher wage Does the Australian job market recognize the value of education? the answer is probably YES
Education and employability DEEWR projects that employment growth between November 2012 and November 2017 is going to be larger for Skill level 1 DEEWR 2013 Projections Skill Level Definition Employment level November 2012 ('000s) Employment growth November 2012 to November 2017 ('000s) Employment growth November 2012 to November 2017 (%) Projected Employment Level November 2017 ('000s) Skill Level 1 Bachelor or higher 3455.6 286.4 8.3 3742.0 Skill Level 2 Advanced Diploma or Diploma 1310.8 108.3 8.3 1419.1 Skill Level 3 Certificate IV or III 1739.1 73.4 4.2 1812.5 Skill Level 4 Certificate II or III 2997.8 234.6 7.8 3232.4 Skill Level 5 Certificate I or sec. education 2031.9 117.5 5.8 2149.4
Wage premium on education A 2009 study of OECD estimates the wage premium on tertiary education and upper-secondary education for men and women in OECD countries The wage premium is defined as the difference between the wage from higher education level and wage from lower education level, in percentage of wage from lower education level. For, Australia, the study estimates the following premia: Tertiary vs. upper-secondary Upper secondary vs. lower Men 41.4% 20.7% Women 37.8% 21.9%
The job market of bachelor degree grads in Australia The 2012 Australian Graduate Survey of Graduate Careers Australia reveals that: 76.1% of bachelor degree graduates were in full-time employment within four months of completing their degrees» Another 15.3% were working on a part-time or casual basis while continuing to seek full employment» 8.6% were not working and still looking for full time employment The percentage in full-time employment increases to 80% for graduates from double degrees
The job market of bachelor degree grads in Australia Average % of graduates in full time employment by field Field of education In full time employment Agriculture 72.6% Architecture/Building/Planning 74% Humanities/Arts/Social Sciences 64.2% Commerce (Economics, Business, Accounting) 77% Education 66.9% Engineering 86.4% Medicine/Dentistry/Nursing 88.4% Law 76.5% Sciences 70.5% Veterinary 81%
The job market of bachelor degree grads in Australia The same survey reveals that the median starting salary of bachelor degree graduates in full time employment and aged less than 25 is $52,000» There is a difference between males ($55,000) and females ($50,000)» The median salary is highest ($56,000) for graduates employed in schools and lowest ($49,600) for graduates employed in industry/commerce (especially for females, $45,000) There are significant differences by field (see table)» Highest entry salary is in Dentistry ($80,000)» Other top performers include Medicine, Engineering, Earth Sciences.
The job market of bachelor degree grads in Australia Field Salary ($,000) Field Salary ($,000) Field Accounting 49 Earth Sc. 73 Medicine 60 Agricultural Sc. 50 Economics/ 48 Optometry 79 Business Architecture 48 Education 56 Paramedics 52 Art & Design 40 Engineering 63 Pharmacy 39 Biological Sc. 50 Humanities 45 Physical Sc. 55 Computer Sc. 52.5 Law 53 Psychology 49 Dentistry 80 Mathematics 57 Social Sc. 47 Social Work 50 Veterinary 45 Salary ($,000)
Conclusion The Employment outlook for Australia and Queensland is still relatively positive» Nothing like the gloomy outlook we have for European countries Health Care, Construction, and Retail Trade are particularly hot sectors There are significant advantages for bachelor graduates (e.g. wage premium) which could justify the investment in education Engineering and certain branches of Medicine/Dentistry guarantee highest entry salaries to young graduates
Conclusion Griffith University offers a coherent mapping of degrees to job market dynamics:» Single major» Double major» Double degree Stimulating learning environment, with focus on students learning needs and outcomes. University/job market links: lecturers with strong industry connections, opportunities for internships, study abroad programmes, career fairs
Conclusion And there is one very last thing that I would like to share with you: Beyond employment opportunities, starting salaries, and wage premium, I always remind students to follow their passion and choose degrees/majors/courses based on what they like. Sometimes it is difficult, but I am convinced that it always pays off. Thank you for your attention