The job market is becoming increasingly challenging for Australian workers, with concerns that AI will further disrupt the landscape. For Lisa Seeger, a hairdresser and single parent, the struggle is real. With a sole income and a mortgage to pay, she's facing the reality of potentially selling her home if she can't secure a better-paying job. This is a common challenge for many Australians, as falling job mobility makes it harder to advance their careers and secure higher-paying positions.
The growing use of artificial intelligence (AI) is adding another layer of complexity to the job market. Ms. Seeger believes AI is playing a role in her struggle, as employers use it to weed out applicants without relevant experience. This is a concern shared by many, as the rapid growth of AI threatens a range of jobs, including radiologists, middle managers, and financial analysts.
The job market has changed significantly since the pandemic, with a big demand for labour followed by a slowdown. The unemployment rate has been on an upward trajectory for the past three years, and the number of jobs being advertised has dropped. Job mobility has also fallen for a second year in a row, with 7.7% of employed people changing their employer or business in the year to February 2025, compared to 9.5% in 2022.
There are several reasons for the decline in job mobility, including a slow-down in the economy and an aging population. With more older Australians less likely to change jobs, competition and business dynamism have also reduced, leading to more legacy firms staying around longer and fewer new startups.
The impact of the jobs market is not limited to Australia, as a tighter jobs market in New Zealand could also be having an impact. The New Zealand unemployment rate was at 5.3% for the September quarter this year, the highest rate in nine years. This has led to many Kiwis looking for jobs in Australia.
Uncertainty around US tariffs and the promise of AI could also be reasons why businesses are reluctant to increase their headcount. As AI becomes more prevalent, it's increasingly being used by both employers and job seekers to streamline the hiring process. Around 20% of new hirers are making use of AI to write their job ads and to streamline the process, while a little over one-third of candidates are using AI to help write their cover letters and CVs.
To address these challenges, the government should consider unemployment insurance, which is a higher but time-limited payment linked to a person's previous income. Additionally, businesses should be prepared for the impact of AI on the job market, and individuals should consider upskilling and reskilling to remain competitive.
