Crisis in the making: Labour shortages hit all sectors of the economy
Labour shortages and inflation are converging to create a perfect storm. Neos Kosmos reached out to Greek Australians in the business and service sector who expressed serious concern.
Fotini Kypraios, Chair of the Hellenic Australian Chamber of Commerce and Industry (HACCI), said that her members are “suffering from a lack of staff.”
“There is major stress on business in terms of staff and skill shortages, our members are unable to get workers, and that ranges across services, retail food industry, factories, the building industry, everywhere,” Ms Kypraios said to Neos Kosmos
Ms Kypraios added that the lack of workers “has impacted on industries’ ability to meet demands and is causing delays.”
The Chair of HACCI has called on the Australian government to rapidly increase the number of inbound workers and migrants.
Ms Kypraios has identified the absence of migration over the last two years due to COVID and border closures as the key issue by business, commerce, and human services.
“We need to lift immigration restrictions and open up, so industry and the commercial sector can recruit from skilled migrants,” Ms Kypraios said.
Debbie Papadimitriou who runs the food processing factory Olympian Foods in Melbourne’s north cannot find workers.
“In the past I would put an ad in Seek and I would receive 100 applications, now I’d be lucky to get 50, and many are applying just so they can show they applied for jobs to get their unemployment benefits, when you ring them, they don’t answer,” a frustrated Ms Papadimitriou said to Neos Kosmos.
Ms Papadimitriou wants an increase in migration, because “locals don’t want to work.”
To add salt to the wound when Ms Papadimitriou finds someone local, they ask for $50 an hour for what is effectively factory work.
“We were paying the standard award wage $25 an hour, and the casual rate was $27.00 an hour, so paying double makes it impossible to run a business.”
She said her business is distressed from “the increased costs of materials, transport, and delivery.”
“We have a need for skilled bakers, and they are impossible to find, restaurants and cafes can’t wait till migration ramps up,” Ms Papadimitriou said to Neos Kosmos.
Mary Koukounakis who runs North Seafood and Grill echoed Ms Papadimitriou’s sentiments and said, “workers are asking ludicrous prices like $40 and $50 per hour due to labour shortages and these bloated rates are causing inflation – you just can’t run a business.”
“We don’t underpay our staff, our staff are our number one priority, I’ve always done the right thing from the beginning,” Ms Koukounakis said to Neos Kosmos.
She has been running the business for three years but said that “it is not making money because of COVID lockdowns over the last two years, staff shortages and bloated wages.”
“Prices are going higher when you’re paying inflated labour costs, add to that $10 for a head of lettuce and doubling of fish prices what are you supposed to sell? If you double your prices, you won’t have a business,” an exasperated Ms Koukounakis said to Neos Kosmos.
The Greek Australian director of a construction company working on government projects, provided comment to Neos Kosmos, on the grounds of anonymity.
“There are simply not enough people, skilled or unskilled,” the developer said to Neos Kosmos.
“The issue is critical, supply chain and inflation pressure, combined with an absence of construction workers will send many of those in the industry teetering on the edge off the precipice.
“This will compound the problem further and create more significant economic issues,” the developer said.
He called for an “immediate rethink on incentives and an increase in immigration by this government.”
The labour shortage crisis is not limited to commerce. Faye Spiteri OAM, the CEO Fronditha Care, a leading age care provider in Melbourne is also suffering from a lack of staff.
Ms Spiteri OAM said that over 1.3 million Australians receive aged care services in their home, or as residential services.
“Fronditha Care provides services to over 1500 people and the demand far outweighs our current capacity to meet community needs due to workforce shortages,” she said to Neos Kosmos.
The Fronditha CEO said that she wants to balance the growing demand to provide culturally specific services and where possible “to employ Greek speaking staff.”
“With the restrictions placed on migration due to the global pandemic and border closures it has become a major challenge and we are reviewing our current labour agreement to increase our capacity to sponsor people who want to work in aged care,” Ms Spiteri OAM said.
She added that it is “critical” to access an overseas workforce “to meet community expectation and service demand.”
Jason Zaikos a migration agent working at Migration Ways Australia has businesses as his main clients.
“Businesses are struggling to fill places, and there’s a few key areas such as building and construction which encompass the trades, in particularly carpentry, painting, welding, and metal fabrication, they are suffering severe shortages of labour,” Mr Zaikos said.
The shortage according to him has become “more severe and have been exacerbated by the pandemic given the borders were closed for two years.”
Mr Zaikos said that many sectors, such as hospitality and IT contact him regularly.
“Restaurants want chefs, managers, and staff, it’s a real crisis, and businesses want IT specialists, they are all struggling to stay afloat; they want to rebound after the crisis, and they can’t rebound because of staff shortages,” Mr Zaikos said to Neos Kosmos.
George Giannakodakis, Founder and Chair of InfraPlan an engineering firm, and PointData a tech-data company in Adelaide, is deeply concerned over the lack of immigration. Mr Gianakoudakis said that in the pre COVID period, his companies relied on professional and tech staff from India and China, who have been in short supply due to the two years of lockdown.
“For example, a mid-level $140,000 per year data scientist, is approaching a salary of $190,000 to $200,000 per year, due to the workforce shortage.
“Employees are vying for the same pool of staff, and poaching has increased, pushing salaries up,” Mr Giannakodakis said to Neos Kosmos.
The engineer, urban development, population, and transport expert – who has worked on a range of government projects – is very aware of the impact migration has on Australia’s economy.
“If we don’t lift immigration soon there will be a 1.1 million backlog by next year, and that will add to the upward pressure on wages, on top of interest rate impacts on businesses – at some point it all becomes unsustainable,” Mr Gianakoudakis said.
He argued that the unemployment rates which dropped from around 5.5 percent pre COVID are, now down to 3.9 percent, but said the fall is not due to more jobs but a serious labour shortage.
“When policy makers come out saying ‘oh look at our unemployment rate’ they should be clearer, at 5.5 per cent there’s enough tension in the market for people to compete for jobs. But, at 3.9 per cent, it simply means there’s not enough labour,” Mr Gianakoudakis said to Neos Kosmos.
Mr Gianakoudakis was sceptical about the push to lift wages “because house prices and rising interest rates.”
“The problem is if interest rates are going up, a business’ cost of borrowing also go up. Companies must pay higher overheads because of labour shortages, and it all becomes unsustainable,” Mr Gianakoudakis said to Neos Kosmos.
The population expert had a stark warning for Australia.
“If we don’t open our borders now, and if they don’t get immigration going now, we will face some serious economic challenges,” he said.
Neos Kosmos received comments from Andrew Giles, the Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs. Mr Giles has been in the job in the newly elected Labor government for just under three weeks and is dealing with issues that arose over the last two years.
The minister says he is aware of the backlog of applications for new immigrants and said that processing outstanding visa applications is a priority for this Government.
“This will fast track and bolster our economic recovery – supporting mobility for international workers and opportunities for Australian industry,” Mr Giles said to Neos Kosmos.
Mr Giles has raised his worries with the Department of Home Affairs and asked them to move the process along faster.
“I have raised my concerns with the current state of visa processing with the Department of Home Affairs, and we are committed to ensuring that visa applications are processed in a timely manner,” Mr Giles said.
Major labour shortages have impacted across all developed economies after two years of lockdowns, border closures, and disrupted supply chains. It seems the responsibility now rests with the new Labor government to rapidly increase the rate of immigration and temporary visa entrants. Otherwise, what is a challenge now will become a major crisis, if it is not already.