Australia is currently facing an unprecedented worker shortage crisis, with job vacancies increasing by 235 per cent between May 2020 and May 2023, and one in four businesses currently being unable to find enough workers.
To measure the severity of worker shortages, the Institute of Public Affairs (IPA) created the ‘Job Vacancy Crunch Rate’, which is the ratio of job openings to working age Australians not in the labour force. This captures the extent local employment must expand to meet the number of jobs available for immediate filling.
This paper adapts the Job Vacancy Crunch Rate to measure the severity of worker shortages across 35 geographic zones.
The analysis indicates regional Australia is disproportionately impacted by job shortages. Four of the five geographic zones most severely impacted by worker shortages are in regional Western Australia and Queensland.
Removing red tape and tax barriers preventing pensioners, veterans, and students who want to work from entering the workforce would potentially decrease job vacancies by at least 62 per cent in each geographic zone across the country.
The federal government’s temporary pension work bonus reform passed in November 2022 has been ineffective at addressing worker shortages. Between December 2022 and May 2023 the number of job vacancies declined by only three per cent, and the number of pensioners in the workforce has increased by only 0.1 per cent.