Friday, August 15, 2008

The opportunity cost of working in Tasmania

I am regularly contacted by people wanting to relocate to Tasmania. These people have usually identified that Tasmania will provide for their lifestyle of choice (understandably!), but they have concerns about the opportunities for meaningful employment here.

For all choices that are made there is an opportunity cost. In choosing the lifestyle that Tasmania has to offer the opportunity cost is the higher income foregone from working interstate. While Tasmanian wages and conditions are on an upward trend there is still a differential between salaries in a similar position in Tasmania and in a major city on the mainland. As the demand for skilled labour intensifies worldwide this differential is not likely to change.

It has previously been argued that Tasmania’s cost of living is more affordable than our mainland counterparts, apparently justifying our lower wages. However, a number of external factors have contributed significantly reducing this relative affordability, including interstate rates, the drought and the oil price.

The questions for relocators to ask are, what is the value of a lifestyle in Tasmania? Is it at least equal to the wage differential? What is the opportunity cost of not relocating to Tasmania?

The questions for employers to ask are, can you afford not to attract and retain the skills and labour you require?

9 comments:

Anonymous said...

It is getting more difficult to find good staffs who want to put in a good days work for a good days pay! I read the figures about the lack of opportunities for Tas jobs for young people. It wouldn't be such a problem if they did not expect to walk out of University and become the instant manager. We used to get accused of this in the 90s, but employers back then had no idea what was coming.
Gen Y job demanding is starting to wear thin, so much so we are now starting to look overseas for skilled and qualified contractors who not only do the work, but do it with loyalty and commitment to doing the job they are employed to do. This is a trait which we seemed to have lost and is definitely absent with the Australian Gen Y job market.
The problem we have in today is that the Gen Y has had a full belly for too long - they have never experienced true job competition or a job market in a recession, where you have to compete against a 100 other people to find a good job. I fear for this country, and I think you will start to see a rise in imported employment from countries such as India and China – and no… not because they are necessarily cheaper, but because they want to work and are willing to grow with a company before throwing a temper tantrum and threatening to leave because they can’t have a lolly!

Anonymous said...

On the costs of living in Tasmania I think right now life really can't be that much cheaper in Tassie.

House prices have inflated so hugely over the past 10 years and I don't believe anyone's salaries have increased in the same way.

I recently lost a gen Y employee to Sydney and one of the things he mentioned was the absence of 'bargains' in Tassie. Whether it be electronic clearing houses or food markets there is opportunity to save in bigger centres that just isn't available here.

On the plus side air travel is currently cheap and I guess you have to view a regular Melbourne or Sydney trip as part of the package of small town life.

Unknown said...

I am curiouse to know if there is any possiblity for overseas to work in Tasmania? Specially in Hospitality Industry (Hotel, Resorts, Restaurants etc. etc.) Is there any kind of agency who can job offer to overseas?

Anonymous said...

To gen x manager,

Upon my graduation from UTAS with a combined degree and Dean's Honor listing, I spent over 10 months trying to secure employment. Not only was I applying for jobs which suited my UTAS qualifications, I was applying for anything.

I never expected to walk into a management position, but I did expect employment.

The problem I have found is that Graduates are undervalued in Tasmania. Much of the feedback I received from the many unsuccessful interviews/applications was that experience is valued over tertiary qualifications.

Almost all of those I know of who graduated with the same degree as I did, have left the state because they too have had a hard time finding employment where they can use their qualifications - ones they spent 4 years getting.

You criticise the work ethic of Gen Y, but I know plenty of Gen X who are longterm unemployed and aren't really interested in either skilling up for full-time work, or gaining employment fullstop.

It's people like you, with your sweeping generalisations and stereotyping who are driving graduates away by not giving giving them an opportunity.

Eusebia Madziwa said...

The laid back lifestyle in Tasmania
induces peace and happiness which are qualities that happen to be far more important than a high income. So personally I am willing to settle in Tasmania and forego the higher income that the fast paced cities have to offer.

Anonymous said...

I think that Tasmanian Companies should maybe look at Britain to see the state that natural born Britains are in because of cheaper labour. Currently the cheaper labour are being paid the same amount as an Apprentice so of course the Employers are taking on skill overseas workers, but the young are now turning on these people as they can't find work. I personally believe that you should look after your own before anyone else, as the cheap labour will leave when their time is up and you will be left with unskilled workers who you will just moan about again.

Lisa Taylor said...

faiyaz - in order to work in Tasmania you need to have the right to work in Australia, either through citizenship, residency or appropriate visa. For information about getting a visa you should contact the Australian Government Department of Immigration and Citizenship. You will need to met certain requirements including age, english language skills and have a skill set that is included on Australia's skills in short supply list. If you dont meet these requirements individually, you will need to seek sponsorship.

If you are particularly interested in living and working in Tasmania, I recommend that you contact the Department of Economic Development and Tourism for further information. www.development.tas.gov.au

All the best, Lisa

Lisa Taylor said...

Hi Gen X Manager, Martin and Cyrus

Yes, it is true that Gen Y have had a 'full belly' however, it is not their fault! Gen Y were lucky enough to be born and raised in the good times.

Perhaps it is us Gen X's (I am one too!) that have a touch of the green eyed monster?

Gen X, have, and probably will continue to have, a tougher time. When we first entered the workforce in the late 80s and early 90s, not only was there an economic downturn, but there was a glut of potential employees (Veterans, Baby Boomers and their children the Gen Xers). This meant that there was the introduction of what was then called 'voluntary early retirement schemes' (redundancy) which effectively encouraged veterans and boomers to 'retire' to make way for opportunities for the younger generation to gain employment. Some of these boomers were as young as late 40s and have had difficulty re-entering the workforce since then.

Now in 2008 and beyond, we have the opposite situation, a dearth of potential employees.
And while there may be some resentment by the older generations, the reality is that the youth is our future. The fact that our population is not replacing itself (through reproduction) will mean that this situation is not going to change in our lifetimes at least.

Perhaps we should be embracing the positive contribution that Gen Y can bring to the workplace rather than the negatives. Gen Y have high levels of productivity, knowledge and ideas that should be highly valued in the workplace even if only for a shorter period than preferred.

We should also bear in mind that Michael McQueen (Gen Y expert) believes that Gen Z will be just like Gen Y, only on steriods!

Cheers, Lisa

Anonymous said...

To Cyrus
Hi Cyrus thanks for your insight. But let me make one thing clear - I am not adverse to giving Tassie Graduates the opportunity, but what you have to realise is that in order to get the opportunity you have to start at the bottom and work your way up. This takes time and proven experience. Like you I graduated the top out of 2500 students, gained a Master degree and all the awards that come with this level of achievement, but I had to work dam hard from the ground floor and up to gain my first break and build valuable experience and prove my worth. A degree is the first step, but it doesn’t prove anything other than you can commit to 4 years of study.