New Study Suggests Demographics, Not Policy, Could Drive Growth in South African Job Sectors

Experts from the University of Adelaide’s SA Centre for Economic Studies (SACES), led by Honorary Research Fellow, Associate Professor Michael O’Neil, have published their latest findings about the effect of the state’s demographic drivers.

“There has been considerable attention paid to future skill requirements across the South Australian labour force, most notably because of the contract for the nuclear-powered submarines and other defence work,” said Associate Professor O’Neil.

“However, often neglected is the realisation that demographic trends, most notably the growth in the ageing adult population in parallel and association with higher rates of chronic disease and growth in the disability industry, will drive employment growth in the health care and social assistance sectors.”

The SACES has published their findings in the report Demography: Driving Employment in South Australia. Are we prepared?

“Between 2010 and 2020 both the Healthcare sector and the Social Assistance and Personal and Other Services sector collectively contributed around a net 26,000 jobs, or 64 per cent of total net jobs growth in South Australia,” said Associate Professor O’Neil.

“The collective share of total employment in these two sectors of the labour force increased from 15 per cent in 2010 to 17.4 per cent in 2020 of the entire labour force. That has increased further to 19.4 per cent in 2022/23.”

The report details implications of these findings:

• Productivity gains: Along with measures to increase labour force participation, there should be a focus on how stronger productivity growth can be achieved in the Healthcare and Social Assistance and Personal and Other Services sectors. Higher productivity as at least a part substitute for forecast workforce increases could help to sustainably raise wages and service standards.
• Share of migration: South Australia will also rely heavily for population and labour force growth from overseas migration and will need to increase its share which is currently hovering around 6 per cent. This also has implications for housing supply.
• Policy adjustments: Several issues raised in the Intergenerational Report 2023 (IGR), released on 24 August by the Federal Treasurer, and the Annual Jobs and Skills Report 2023, released on 3 October by Jobs and Skills Australia (JSA), point to a need for more focus by South Australian policymakers and business leaders on industry policy; regulation design and load, particularly in land supply and housing; and labour force productivity.
• Skilled jobs: The big question remains about the impact of the expected growth in employment in Healthcare and Social Assistance and Personal and Other Services sectors to meet the needs of an ageing population. What will be the impact of the likely expected continued growth in NDIS-related demand; and expected increased service standards, which will largely require increased and more skilled labour inputs, as foreshadowed in the Aged Care and Disability Royal Commissions?

The SACES report has been made available to South Australia’s business leaders and government decisionmakers.