The Summit must make us change jobs. That would make the most…

(MENAFN – The Conversation)

This article is part of The Conversation series on the Labor Jobs Summit. Read the other articles in the series here.

After 20 years of declining education levels, as well as recent disruptions in migrant flows, talks at this week’s Jobs Summit will rightly emphasize the importance of developing skills.

But education policy reforms can take a long time to reap the benefits, and there is no guarantee that changes to migration policies can quickly return Australia to its pre-pandemic population.

This means discussions at the summit should focus not only on growing our talent stock, but also on allocating our existing talent more efficiently.

In a study titled Better Harnessing Australia’s Talent published this morning and prepared for the non-profit e61 Institute, we demonstrate that this is not happening yet.

e61 Institute

We see not enough people changing jobs, not enough new businesses being created, and not enough competition between businesses.

What we need is for Australians to resign from their jobs and seek new ones along the lines of the great resignation that would have taken place in the United States.

We find that the least dynamic industries (where there are fewer quits) are those where the rate at which productivity growth translates into wage growth has fallen the most, likely due to a decline in the power of worker negotiation.

The likelihood of the average Australian worker changing jobs has fallen from 12.8% in the mid-1990s to 9.5%.

Workers who change jobs get an average salary increase of 8%. And it’s better for their mental health. Going from an ill-suited job to a well-suited job gives a mental health boost said to be equivalent to marriage. Singles: Beware.

We also have fewer new businesses. The pace of new business creation fell from 13% in the mid-2000s to 11% in the mid-2010s.

Industry concentration has increased. The share of industry revenue going to the four largest companies has doubled since 2010.

Those at the top are safer than ever. The likelihood of a market leader being ousted from the top has fallen by about seven percentage points since the mid-2000s.

So what can we do to make Australia more vibrant? It must be easier to change jobs. There are a lot of things we could look at.

Easier job change

We could harmonize and reduce business licensing restrictions across all states (which the states and Commonwealth are working on) and remove taxes such as stamp duties that make relocation costly for people.

We could reduce the barriers that new businesses face. Non-competition clauses, planning and zoning laws and visa quotas are areas ripe for reassessment.

And we could shift our tax breaks for small business supports to new small businesses. Young employers, not small employers, create the most jobs. Former employers (taken together) destroy them.

Read more: Australia’s ‘big quit’ is a myth – we change jobs less often

Penalties for anti-competitive behavior and laws restricting mergers in already concentrated markets should be tightened, as Deputy Treasurer Andrew Leigh suggested last week.

But we must recognize that market momentum is not good for everyone.

Most workers benefit from dynamic markets, in terms of jobs, wages and choices. But more momentum would mean more workers would lose jobs and struggle to get new ones.

An improved safety net

The reported deterioration in mental health following job loss is equivalent to that following serious injury or illness. Lost income takes years to recover.

We need to consider reforming our income support system. Our current unemployment benefit system offers support, but not much assurance to workers considering changing jobs.

To meaningfully help workers, the summit will need a plan to fix Australia’s stagnant economy. Anything less will treat the symptoms, not the cause.

The opinions expressed in this article are those of the authors and do not necessarily reflect the views of the e61 Institute.

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About Vicki Davis

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