SYDNEY — Having grown up in a working-class suburb of Sydney, 20-year-old Brian Felice said, he never planned to follow in his father’s footsteps as a construction worker. Perhaps, he thought, he would join one of his three older brothers in the gleaming Sydney office towers from which they navigated the high-flying worlds of finance and banking.
But in Australia these days, finance just is not where the money is. A mining boom has lured thousands of workers into resource-related fields, leaving tourism, manufacturing and many other sectors short of skilled labor.
Mr. Felice set out for the state of Western Australia, home to a boom in resource production unrivaled since the great gold rushes of the 19th century. After two years building homes for miners in the sprawling camps dotting the western desert, he made enough money to buy a home of his own in Sydney’s notoriously expensive real estate market, with enough left over to put himself through college.
And just what is he studying? Construction, of course.
“I was getting, like, 27 dollars an hour in Western Australia, rather than maybe 15 dollars an hour in Sydney,” he said in a telephone interview. The wages are the equivalent of $29 and $16.
“I just couldn’t believe how much money it was. I’m an 18-year-old kid at the time,” he said, adding, “I just could not believe how hard it can be in Sydney for an 18-year-old.”
Australia’s economy is booming, thanks largely to soaring demand for its abundant deposits of coal and iron ore — not to mention natural gas and gold — which India and China have been gobbling up to fuel their own surging economic growth. Even during the global financial crisis, Australia, unlike many Western economies, registered modest growth, a trend that has since accelerated, as commodity prices have regained their footing.
But both Prime Minister Julia Gillard’s government and private sector economists have been increasingly vocal about what they fear is the dark side of that growth. Resource sectors, and related sectors like construction, are to a rising extent taking precedence over other industries, like tourism and manufacturing. The effect is a distorted economy, as the resource boom sucks up the already thin pool of skilled laborers and drives labor costs up across the board.
Australia is now facing a problem many Western countries would be happy to have: There simply is not enough skilled labor to fill all of the jobs being created by the hot economy, said Paul Bloxham, a former Australian Reserve Bank economist who is now HSBC’s chief economist for Australia and New Zealand.
“I think we’re moving to a world where the mining industry and all the associated jobs — in construction and in professional services — are going to be the main thing where there are skill shortages,” he said in an interview. “And that’s going to put upward pressure on those wages, and people will transfer across to those jobs from other industries.
“I suspect that’s the next problem we’re going to face: not enough labor on the supply side to meet the demand out there in terms of jobs that are being created in the mining industry.”
A report on the skill shortage issued recently by a government task force agrees, saying Australia will need to add 2.4 million skilled workers by 2015 to meet businesses’ growing needs. That is after allowing for the replacement of retiring baby boomers, as well as a drooping birth rate, problems that led Ms. Gillard to warn recently of a “yawning demographic deficit.”
Ms. Gillard began sounding the alarm in February in a speech to business leaders in Melbourne, calling the skill shortage “the biggest challenge arising from the boom.” The mining industry, with its high salaries promising even unskilled laborers the opportunity to get rich quick, was like “a magnet dragging iron filings towards it.”
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