AI squeeze leaves Australians stuck in lower-paid jobs

SYDNEY, AUSTRALIA — As the unemployment rate climbs and artificial intelligence (AI) reshapes hiring, many workers are finding it increasingly difficult to change careers or secure wage growth.

“We’ve really come off the back of a jobs boom a couple of years ago, and the labour market and the economy has been slowing down,” said Blair Chapman, Senior Economist for jobs website SEEK.

Stagnant job mobility weighs on wages and careers in Australia

With rising unemployment and AI recruitment tools stifling job mobility for Australians, their struggles occur within the broader context of stark warnings that a United States-scale, AI-driven retrenchment crisis could soon hit local white-collar professions.

According to the Australian Broadcasting Corporation report, unemployment mobility is emerging as a major issue for Australians seeking better jobs and pursuing their careers. Economic indicators indicate that the slowdown is likely to persist. 

In October, the unemployment rate reached 4.3%. It was 3.4% only two years ago, and the number of vacancies will decline by 1.5% each year through August 2025. The employment mobility rate would be used to measure the restricted market, and over the last two years, it has declined to 7.7%, down from 9.5% in 2022. 

According to Chapman, this is because, in most cases, people are better placed to secure wage increases by simply changing jobs, which is becoming increasingly difficult.

Several interrelated factors cause this loss of mobility. One contributing factor is an ageing population, with older workers having a lower probability of changing jobs. 

Moreover, business is not as dynamic; therefore, there are fewer new opportunities, as existing firms can take over the market. The market is also facing competition threats, with the unemployment rate in New Zealand at a nine-year high of 5.3%, as Chapman notes, “There are a lot of Kiwis looking for jobs in Australia.”

This population shift, globalization, and a stagnant economy are rendering the world stagnant, and employees such as Lisa Seeger are unable to move beyond where they are.

“I’m going to continue to be resilient and try and find a better job that pays better money, [so] that I can provide for her and keep a roof over our heads for the future,” she still said.

AI hiring tools reshape recruitment, threaten white-collar jobs

The increased use of AI in the recruitment process is posing a new, computerized challenge to job applicants, who may be filtered out if they do not meet the system’s strict specifications. 

The applications of AI in the recruitment process are also becoming increasingly popular with employers, who are currently writing job advertisements and coordinating applications through AI applications. 

Chapman adds, “A little bit over one-third of candidates are using AI to help write their cover letters and CVs and things like that.” The technology enables employers to use quick filters to sift through applications based on specific tick-box qualifications, including a forklift license.

Still, it risks overlooking transferable skills and personal qualities that candidates like Seeger possess. She believes this system is weeding her out, lamenting that “sometimes how someone presents on paper isn’t actually who they are in person.”

Beyond recruitment, AI poses a broader threat of widespread workforce disruption, with experts urging immediate government preparation. 

Trent Wiltshire, Deputy Program Director in the Economic Policy program of the Grattan Institute, warns that AI is threatening jobs across the spectrum, from radiologists to financial analysts, and that “there’s a potential doomsday scenario where there’s mass unemployment.” 

The critical uncertainty is whether companies will use AI to replace workers to cut costs or to enhance the productivity of existing staff. 

Wiltshire advocates for the government to consider unemployment insurance—a higher, time-limited payment linked to previous income—as the current job seeker benefit rate is inadequate to support people through potential large-scale job losses.