Australia’s greatest-ever rentier grouping has embarked on a war for slaves:
Australia’s largest employers, farmers and small-business owners have declared war on Anthony Albanese’s industrial relations reforms, launching a multimillion-dollar campaign attacking union-backed same job, same pay laws as a direct hit on aspirational workers.
The industry-wide blitz, funded by the biggest war chest since the mining tax fight, will be unveiled on Monday coinciding with the Prime Minister’s return from visits to Singapore and Vietnam.
“A Better Way, for Better Pay” campaign ads will warn Australians that if you believe in being rewarded for your experience and working harder – “same job, same pay will take that away”.
This is an attempt to push back labour hire reforms. Labour hire is the use of third-party employment agencies.
It has been used by the members of all of the above organisations to marginalise unions and to create a diffusion of responsibility in industrial relations that has enabled thriving worker exploitation.
Most especially in conjunction with mass immigration.
Recall what the parliamentary inquiry into establishing a modern slavery act said about labour hire firms:
Committee view
9.146 The Committee recognises that recent Commonwealth, state and territory inquiries have highlighted the role that unscrupulous labour hire companies play in contributing to the exploitation of migrant workers…
9.150 While the Committee acknowledges that a labour licensing scheme is no ‘silver bullet’ to stopping exploitation and modern slavery, it considers that taken together with the Australian Government’s existing measures and the recommendations of this report, it will assist to improve protections for migrant workers…
Recommendation 48
9.152 The Committee recommends that the Australian Government establish a uniform national labour hire licensing scheme, consistent with recommendations by the Parliamentary Joint Committee on Law Enforcement, the Joint Standing Committee on Migration and the Senate Education and Employment References Committee. This licensing scheme should incorporate random audits and unannounced inspections of labour hire firms to ensure compliance.
The Working Holiday Maker (WHM) visa has similarly become a fertile ground for unscrupulous labour hire companies that abuse their workers, as explicitly noted in the 2016 Senate Standing Committee report “A National Disgrace: The Exploitation of Temporary Work Visa Holders”:
The WHM visa program is a poorly-regulated program, and the bulk of the evidence to the inquiry showed that the WHM visa program has been abused by unscrupulous labour hire companies in Australia with close links to labour hire agencies in certain south-east Asian countries ……… (labour hire companies) ……are in fact not only using the program to fill potential shortfalls in labour, but also to gain access to cheaper labour.
Inquiries into the labour hire sector in Victoria, Queensland and South Australia all came to the same conclusion: there is widespread exploitation of vulnerable workers and this requires a regulatory response.
So, in principle, the labour hire reforms are very worthwhile.
So is this:
Australian employers who exploit migrant workers will be banned from hiring other visa holders and will face new criminal penalties, as part of a government crackdown.
On Monday the federal government will announce legal changes to tackle what it calls “a crisis of exploitation with up to one in six recent migrants paid less than the minimum wage”.
The changes, to be introduced to parliament within weeks, will include making it a criminal offence to coerce someone into breaching their visa condition. This offence will attract a penalty of up to two years in prison.
In addition to tripling some existing financial penalties, the government will give temporary visa holders who are sponsored by an employer much longer to find a new job. This aims to ease the pressure exploited workers face to stay in poor conditions.
Bravo.
However, there is a problem with the reforms. It is a moral and national interest imperative to tighten these loopholes but they will still not lift wage growth in the presence of the ongoing mass immigration supply shock.
Why? Because the many, many businesses that have become accustomed to low-wage business models, which is all of them judging by the above lobby list, will employ fewer people as their margins are squeezed.
As labour supply continues to pour in, less of it will be soaked up for exploitation, so unemployment queues will lengthen.
Obviously, that will mean more workers available for every job and downward pressure on wage growth.
In a way, what Albo is doing is making it more difficult to exploit an underclass of migrant workers while making it easier to drive a harder bargain with all workers.
It’s not all bad news. The other outlet for squashed margin businesses is for them to invest in productivity. As they automate, income will rise again and profitability resume. Especially as AI arrives.
This ought to be shared with the remaining headcount of higher-skilled workers.
But, so long as the mass immigration supply shock continues, higher unemployment than otherwise will keep wages lower than otherwise.
