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The IT industry is responsible for the current skills shortage
Former RBA governor says immigration is putting ‘downward’ pressure on wages. “Mr Fraser said more needed to be done to train local workers to fill the gaps that tend to be in roles such as IT. “We should have more skills being developed here. It doesn’t take Einstein to work out this is an area [of demand].””
I’ve been in the IT industry for 30 years. In the ’80s and ’90s, companies recruited talented local people, trained them and paid them well. When the big Indian outsourcing and offshoring companies entered the market in 98/99 big companies stopped training people and started giving their IT work to Indian companies. These big outsourcing companies sent a lot of their work offshore to India where people were paid 10% of local wages and they brought a lot of people onshore to work with clients at 60% of local salaries.
As a result from 2000 to 2020, pay for local IT people fell and there have been periods of high unemployment. In 2000 the day rate for a skilled IT project manager was around $1000 it fell to around $850 in 2010 and has only just started going up again to $900 to $1000. If rates had kept up with inflation the average contract rate for a PM would be $1600 today.
I know a lot of highly skilled IT people who were unable to find work from 2000 to 2020 due to competition…
