Migrant salaries fall below zero as the great visa rort rages

Via Domainfax:

The Fair Work Ombudsman will investigate companies offering unpaid internships for which some students paid $1000, following a report by Fairfax Media.

The Ombudsman, Natalie James, said the report raised “serious questions” about the internships hosted by web developer Future Squared and recruitment by Industry Placements Australia.

Some graduates paid a $990 “administration fee” to IPA for placement in the 12-week Future Squared internship, which is unpaid, and takes place away from the company’s headquarters in a co-working space leased by IPA.

A spokesperson later confirmed: “The Fair Work Ombudsman is currently conducting inquiries into this matter. As these inquiries are ongoing, it is not appropriate to comment further at this time.”

The question is are these hours of work experience being counted towards an application for permanent residency? If so then IT salaries have just fallen below zero thanks to Australia’s monumentally fraudulent skilled migration system.

Of course this is no surprise at all given we have seen entire business lines, firms and sectors across Australia whose business models include turning their labour bill into a profit centre via visa fraud. We have seen this in fast food, convenience stores, agriculture, building, accounting, IT, engineering, education, transport, the gig economy and no doubt it is even more widespread.

As Domainfax showed last week:

A concentration of underpaid workers has been uncovered in western Sydney, with almost two- thirds of businesses audited found to be seriously short-changing workers or failing to keep proper pay records.

The Fair Work Ombudsman investigation found that 64 per cent of almost 200 businesses audited were breaching workplace laws in suburbs including Cabramatta, Guildford, Mount Druitt, Fairfield and Merrylands.

Fair Work Ombudsman Natalie James said businesses that were underpaying workers and not issuing them with correct pay records were on notice that future breaches could result in serious enforcement action.

…The suburbs are also home to a higher than average proportion of migrants, with both Harris Park (85 per cent) and Parramatta (74 per cent) at more than twice the national average of 30.2 per cent.

…“When combined with a lack of familiarity with workplace laws, language barriers can present significant difficulties to employers seeking to understand and comply with their obligations.”

…She said new arrivals to Australia might have a limited awareness of Australian workplace laws.

Since the 7-Eleven migrant worker scandal broke in 2015, there has been a regular flow of stories emerging about the systemic abuse of Australia’s various migrant worker programs and visa system.

The issue culminated in 2016 when the Senate Education and Employment References Committee released a scathing report entitled A National Disgrace: The Exploitation of Temporary Work Visa Holders, which documented the abuses of Australia’s temporary visa system for foreign workers.

The most damning assessments from the Committee were regarding Australia’s Working Holiday Maker and student visa holders, who were “consistently reported to suffer widespread exploitation in the Australian workforce”.

Mid last year, ABC’s 7.30 Report ran a disturbing expose on the modern day slavery occurring across Australia.

Meanwhile, Fair Work Ombudsman (FWO), Natalie James, told Fairfax in August that people on visas continue to be exploited at an alarming rate, particularly those with limited English-language skills. It was also revealed that foreign workers are involved in more than three-quarters of legal cases initiated by the FWO against unscrupulous employers.

Then The ABC reported that Australia’s horticulture industry is at the centre of yet another migrant slave scandal, according to an Australian Parliamentary Inquiry into the issue.

The same Parliamentary Inquiry was told by an undercover Malaysian journalist that foreign workers in Victoria were “brainwashed” and trapped in debt to keep them on farms.

Finally, a recent UNSW Sydney and UTS survey painted the most damning picture of all, reporting that wages theft is endemic among international students, backpackers and other temporary migrants:

One in three international students and backpackers are paid about half the legal minimum wage, according to a major new report, Wage Theft in Australia, the most comprehensive study of temporary migrants’ work and conditions in Australia.

The report draws on survey responses from 4,322 temporary migrants from 107 countries in all states and territories. It was authored by Laurie Berg, a senior law lecturer at UTS, and Bassina Farbenblum, a senior law lecturer at UNSW Sydney.

The report presents a bleak but much-needed national picture of the extent of wage theft among international students and backpackers in Australia, and how it varies across different nationalities, visas and industries, say the authors…

Co-author Laurie Berg says wage theft is not confined to fruit and vegetable picking or convenience stores, nor is it confined to any nationalities.

“A fifth of every nationality was paid around half the legal minimum wage. For almost 40% of students and backpackers, their lowest paid job was in a cafe, restaurant or takeaway.”

Berg says the study also shows international students and backpackers encounter conditions that may constitute criminal forced labour.

In 91 cases, respondents had had their passports confiscated by employers; 173 respondents were required to pay upfront “deposits” of up to $1000 to secure a job in Australia; and 112 respondents had been asked to pay money back to their employer in cash after receiving their wages.

The study also found 44% of overseas workers are paid in cash, including two in three waiters, kitchen-hands and food servers. Half never or rarely receive a payslip.

The study raises urgent concerns about the actions and resourcing required of government, business, unions and other service providers to address the scale of non-compliance, says Farbenblum…

Key points:

● A quarter of all international students earn $12 per hour or less and 43% earn $15 or less in their lowest paid job.

● A third of backpackers earn $12 per hour or less and almost half earn $15 or less in their lowest paid job.

● Workers from Asian countries including China, Taiwan and Vietnam receive lower wage rates than those from North America, Ireland and the UK. Chinese workers are also more likely to be paid in cash.

The Senate report on the exploitation of temporary foreign workers was released in March 2016, and yet two years later there has been minimal action from the federal government.

And why not? If your goal is to crush wages for your capital donors then this a great way to do it. Dr Bob Birrell from the Australian Population Research Institute, whose latest report is based on 2016 Census data, revealed that most recently arrived skilled migrants (i.e. arrived between 2011 and 2016) cannot find professional jobs, with only 24% of skilled migrants from Non-English-Speaking-Countries (who comprise 84% of the total skilled migrant intake) employed as professionals as of 2016, compared with 50% of skilled migrants from Main English-Speaking-Countries and 58% of the same aged Australian-born graduates:

These results accord with a recent survey from the Bankwest Curtin Economics Centre, which found that 53% of skilled migrants in Western Australia said they are working in lower skilled jobs than before they arrived, with underemployment also rife:

The above helps to explain why the Australian Bureau of Statistics (ABS) latest Characteristics of Recent Migrants report, released in June last year, revealed that migrants have generally worse labour market outcomes than the Australian born population, with recent migrants and temporary residents having an unemployment rate of 7.4% versus 5.4% for the Australian born population, and lower labour force participation (69.8%) than the Australian born population (70.2%):

Finally, the below segment from last week’s ABC Radio highlights the absurdity of Australia’s ‘skilled’ migration program:

According to this report, skilled migrants have grown increasingly frustrated at not being able to gain work in Australia despite leaving their homelands to fill so-called ‘skills shortages’. As a result, they are now demanding that taxpayers provide government-sponsored internships to help skilled migrants gain local experience, and a chance to work in their chosen field.

The below testimony from the CEO of the Multicultural Communities Council of South Australia highlights the absurdity of this situation. She says that despite being well qualified on paper, many skilled migrants get knocked back because they lack local experience:

“I’d say the majority of them [skilled migrants] will find difficulty getting work in their chosen area…

It’s heartbreaking because they pin their hopes and dreams on when they come across to Australia…”

So why do we have a skilled intake again? To lengthen the dole queue? To rob developing nations of their skilled workers? To provide employers with the opportunity to turn their labour bill into  a profit centre? And how exactly is the 130,000 strong permanent skilled migrant program plus temporary skilled migrants alleviating so-called “skills shortages” if it is creating conditions of such extreme oversupply that migrants will pay to work?

Australia’s skilled migration program is one giant fraud that is failing miserably to meet its original intent and has become instead a key driver of Australia’s wage malaise.

Houses and Holes
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  1. i would genuinely pay money for the chance to do a work placement. at this point, it’s worth it. experience is all employers care about anyway. too bad these opportunities are not available to me.

    • It is outrageous that immigrants are allowed to do what Aussies are not allowed to do.

      Try and search for an internship when you have almost completed your studies. I know at least 1 person who did an internship for several weeks (perhaps 2-3 months) after graduating.

      This nation is utterly buggered up compared to when Howard was PM – and I thought things would improve when he leaves the building! The unemployment rate did come down in 2008 and newspaper reports said that the unemployment rate will be even lower in 2009! But since then, the braindead Greens love giving out 457 visas for $0 each – which also hurts the refugees they claim to love.

      • Where I work , we have employed graduates , just finished uni , no experience .Employed as casuals in engineering , automation roles for 6 months .Win/win , bit of a job interview , if we do not take them on , they have 6 months real work experience for their next job application.Incidentally , they are doing great , smart , willing to learn , plenty of energy and initiative

    • As you point out, this is partly a PR visa scam. For only $ 1000 every 3 months, or $ 4k a year, (and working for free) you have 1 year work experience for your permanent residency application.
      Cheap at the price for residency.

    • Recently paid $200 for medical and $220 security id, $32 for basic printed copy birth certificate plus a dollar for postage even though I had to traipse into Collins st to show ID where I could collect on the spot. Advised not to come after 1pm cos likely wouldn’t get seen due to volume of people. Births, Deaths and Marriage certification doing a roaring trade. Felt like around the world in 120 minutes with bonus tax payer funded rainbow celebration.
      same at the agency – yet to have casual pos confirmed!

  2. The answer is pretty clear – the internship the multicultural communities CEO is calling for will be about, “placing migrants with local employers for six months at lower salaries.”

    I remember when I heard this a few weeks back I thought they had to be a front for the business lobby.

  3. Nick McCallum of 3AW radio wanted to allow immigrants to claim welfare straight away!


    Your move to restrict the welfare in some areas to some migrants, now is that fair given we ask migrants to come here and assimilate virtually straight away and say we want you to be one of us but then we treat them differently when it comes to welfare? Is that fair?


    I heard him continuing to push this line for an hour on the radio show. The listeners mostly disagreed. They were along the lines of “immigrants should first prove self sufficiency by not claiming welfare for a few years”.

    I reckon the law should go further and ban “skilled” foreigners from living in negatively geared properties.

  4. The ABC has done that kind of pathetic story 3 years in a row:

    7 Mar 2017 – http://www.abc.net.au/radio/adelaide/programs/mornings/skilled-migrants/8331578

    17 May 2016 – http://www.abc.net.au/news/2016-05-17/persian-migrant-haideh-soleimani-finds-skilled-job-hard-to-find/7401418

    I just heard that ABC radio segment for the first time and it is outrageous.

    Jay Weatherill was importing 2500 “skilled” immigrants per year? Without a job to go to? Mark McGowan is probably a lot smarter because Mark reportedly stopped the madness in that state.

    Singapore requires that immigrants have a job to go to while Theresa May requires that foreign cooks be paid £35,000/year.

    • Skilled migrant visas should not be issued without (1) labour market assessments and (2) job offer / contracts, that is, if they are meant to solve skills shortage.

      The system has been broken and broken for a while.

      • dumpling, every one of them should be required to pay $25k income tax upfront upon landing at an Aussie airport – to prove that they are here to work in a high wage job. No more “I am working here for $150k…trust me”

      • dumpling Labour Market Testing is already a requisite for 457 visas however it’s a joke – all they need to do is provide job ads showing that they have searched for a local but can’t find one. That’s a huge rort as many of them will literally put out a job on Gumtree for an hour and then take it down then show Home Affairs they made an effort. It needs reforming.

        Jacob go get a job.

  5. Australia must throw away the idea that we can get a free ride by poaching foreign skills after foreign governments have invested into developing the said skills along with the idea that we can keep living beyond our means by perpetually accumulating CADs.

    If a free lunch sounds too good to be true it probably is.

    • Pollies keep telling the electorate that they are entitled to keep living beyond their means and any failure to do so is the opposition’s fault, and the voters believed the nonsense, is what made Australia as we see today.

      A poster named aj. was on the MB site before and used to end his posts with the phrase “voters is stupid”. It is true but the bottom line is that voters as a whole do not want to know the truth.

      Meanwhile, businesses are busy making money out of the voters who are in denial.

      • The voters are entitled to or should be entitled to a bit more fairness in the distribution of wealth.

        IMF says Australia has one of the fastest rising income inequality rates


        How is that acceptable?

        data from Credit Suisse, shows the level of wealth held by Australia’s richest 1% grew to 23% in 2017, up from 22% the year before

        Would it be a great calamity if the richest 1% held 18% of the wealth instead?

      • Jacob, you are missing the point. It all started from worsening ToT and concomitant CAD 60 years ago. The right thing to do at the time was to reign in ToT and CAD, and refuse to live beyond our means. That way, we would not have ended up in a situation where the vast majority of Australian businesses and assets are foreign owed.

        Instead of doing the right thing, we chose to start living beyond our means by worsening CAD bit by bit. In time, the electorate started accepting living beyond their means as “the new normal”.

        The rest is inevitable and it is history.

        The latest round of mining boom was especially spectacular in its stupidity. While we were busy bidding up local house prices, multinationals kept buying up local productive assets including mines, farms, ports, airports, toll roads, etc.

        Now it is next to impossible to tighten it back to where it should be. Not only such tightening would cause unbearable pains to the gutless locals, foreign interests have amassed too much power and say in the local conducts. It is immaterial whether the richest 1% held 18% or 23% of the wealth if the Australia’s share of the said wealth has been shrinking fast.

      • The classic case of offshoring, was when Xstrata bought Mount Isa mines,
        offshored it to tax havens somewhere, and saved 30% tax right away. They made 30% on Day 1, so they can easily bid 30% more. Recently some group offered the same deal for BHP, but even ScoMo stopped that one. 30% of BHPs company tax removed out of the budget to the Caymans was too much…

      • Mal, that’s what happens if you keep selling your assets.

        Heads might roll in the BHP boardroom for this failure. Many CEOs of the top ASX listed companies may be Australian but they are appointed by the foreign controlled boards. You can be certain that the management will not do anything against the wishes of the board – they will be fired if they do.

  6. How are “skilled” migrants coming here without gigs lined up? The student visa -> PR rort?

  7. Hmmm: What happens if the real long term value of typical human labour is zero or even possibly negative?
    Is that possible?
    It is certainly not a world we are used to, however traditionally our aggregate labour had a productive purpose (something of tangible undeniable external value was produced by the people living in a town/city). Think of it this way. negative labour value makes some sense if the aggregate total work output of the city is also negative. Know any cities like this?
    More worrying is the concept that most if not all “productive” labour can be very cheaply automated, leaving humans to compete exclusively in the domain of unproductive human undertakings. now how much should one expect to be paid for being unproductive?

    • The unstated assumption in “human labour value” falling to zero is that the machines become their own market ie – they have developed their own self consciousness.
      Shortly after humanity joins the Dodo.

    • This is definitely a big problem that most people just can not wrap their heads around. My guess is that the initial response will be the creation of “fake” work that tries to maintain the appearance of useful work, but is in fact useless. We are already seeing this in our cities. Case in point, elaborate fake energy “retailers” in competition with each other to sell us the same electricity that they don’t produce. There is a growing list of these cotton wool jobs.

      The big question is whether these Potemkin Careers can be held together with sticky tape, or will they just collapse under their own weight of futility. If we do get to the stage where most human labour is ineffective, then most likely we will be looking at an economic singularity, since most of the fundamental rules will just cease to operate.

      • For sure we’re already creating all manner of “jobs” that make absolutely no sense, add zero value, matter of fact all they do is to create an unavoidable cost for the broader economy. you don’t need to look too hard at the Aussie labour market to find examples.
        Many years ago I got involved with group that was trying to make life rewarding for intellectually handicapped people. One of the things that they focused on was to get the individual to believe in themselves and believe in the broader value of the tasks that they were given. Most of the tasks had no economic value what so ever (things like sorting coloured balls by colour or size or some other metric) It was amazing to see changes in the mental health of the handicapped individuals if they believed they were “helping” by doing something useful and becoming good at it.
        These days I sometimes wonder if this little experiment hasn’t been expanded with a set of slightly more challenging tasks created to entertain the otherwise idle minds at the next rung of the intellectual ladder.
        For me the obvious test for this condition would be the willingness of others outside of the game to buy your work product for real money or exchange for items of real value.
        If there was no willingness to exchange my labour for an item of real tangible worth (lets say a house) than clearly my labour has diminished value (or possibly no / negative value) so we exchange it for pieces of paper which unbeknownst to us are printed in the very next room.
        Hmmm does that sound like any economy that anyone around here is familiar with?

        It’s interesting to think about the likely evolution and ultimate structure of an economy whose only purpose is to entertain and reward all participating individuals for not producing anything.

      • Marx already faced this question. His answer was that in such a situation, markets and politics would become increasingly destabilized as wealth concentrated and we’ll end up with a socialist revolution. (oth the self conscious machines will wipe us out )

      • drsmithyMEMBER

        My guess is that the initial response will be the creation of “fake” work that tries to maintain the appearance of useful work, but is in fact useless.

        This is already well on the way, eg: huge swathes of the HR industry.

        What we should be doing is dialling back how much individuals have to work (3 day week, 5 hour days, 12 weeks leave a year, however you want to cut it) and giving more of the un- and under-employed something to do while improving everybody’s quality of life.

        Instead, those already with jobs are expected to work harder and be paid less, while the un- and under-employed are expected to work for free to get “experience” or feel guilty begging for scraps to survive as “leaners”.

        MB has covered the bullshit jobs phenomenon a few times in the past.

      • @drsmithy
        just to try to tie this all back to the original theme “Migrant salaries fall below zero….”
        Isn’t this the logical result of us creating BS jobs for the boys or girls or any other Aussie, we’re OK with these BS jobs going to our kids (other Aussies) but offended when these BS job vacancies are filled by foreigners.
        The whole opportunity is BS and now we’re importing workers to fill the needs of a job that it self doesn’t even really need to exist. I suspect this is where LVO sees it all as stupidity that needs to end at the migrant level, as start.

        From my perspective it’s naive to believe that you can create this highly remunerated job that does nothing
        of value (zero global worth (aka useless) and not expect to see the global market arbitrage these well paid but completely meaningless/ useless jobs.
        Spotting as it were an easyA is what global arbitrage is all about, if you create the system that encourages this than I can guarantee you the global market will respond to fill the apparent vacancy (BS job), picking up some easy money in the process.

      • Well, it depends on how you’re going to define “BS job”.

        There are plenty of jobs which aren’t really “productive”, but are still “useful” because they produce a quality of life improvement (eg: your example of helping the disabled).

        I use HR as an example because it is a field where so much of the “work” exists only in a circular sense (ie: someone in HR has decreed something must be done, therefore that thing must be done – there is no other driver for it nor benefit derived other than ticking a box).

        There is a point to be made that the “value” of human labour effectively becoming zero is causing ructions. However, I disagree that it’s something existing knowledge cannot deal with. The resulting problems are not issues of knowledge or understanding, they are issues of ideology.

    • Fake jobs are everywhere and increasing but not new. In 1931-1932, it was a common practice for the state governments to introduce useless work, like digging a gutter one day and filling it up the next day, to keep the unemployed busy with minimum pay.

      Many poor 3rd world countries have large armies, not because they are of any use in real wars but because a large army keeps many unemployed off the streets.

      Something similar can always be invoked, of course. But it would be nice if homo sapiens could display a little bit of improvement in the last 90 years by letting the unemployed carry out a bit more meaningful work, like planting trees along the Nullarbor Plain!!!

      • Yes the Depression era “make work” was a scheme to keep people busy with work that had no purpose, but it was able to function because the broader economy was productive in that it produced sufficient goods to satisfy aggregate demand. This suggests that the real purpose of make work was to actually expand aggregate demand and thereby get the whole snowball rolling and grow the economy sufficiently to make it necessary to once again employ these people in Productive jobs. In this sense it was a temporary solution to a temporary problem.
        Today we might be following in their foot steps but nobody believes the solution is temporary. Unproductive citizens/workers is becoming (has become) the broader long term goal of our society even to the point where we are redefining Productivity to include activities that clearly decrease our collective wealth.
        As a social experiment it’s fascinating, as an economic experiment it’s umm interesting.

  8. Look on any major building site and you will see that there are labourers in there who have been shipped here to work on that project. Wish someone would stand up at an AGM at say Mirvac and ask them why.

    • Ironically we would need hardly any construction if AUS had a stable population. As you say, the tradies are foreigners anyway – it is not as if Aussie tradies are enjoying higher incomes.

  9. reusachtigeMEMBER

    Look, no one cares how low the wages are for the imported human capital !! We need a plebiscite on this. Would you like to pay foreign humans working in Australia the same as an Aussie or would you prefer cheap pizzas? Pizzas will win every time!

  10. If this was a scandal that involved unions or those on welfare there’d be a raging debate going on about how to deal with it, but it isn’t, it only involves immigrants and foreign students so they don’t give a shit.

    Australia’s view of itself is seriously myopic.

  11. Send this to the editiors of the Hindu Times, and if they print it, the ponzi will collapse over night.

  12. If they ax the skilled visa program, foreign students will simply move to countries offering better quality of education such as the US, UK and Canada. The 457 visa was already scrapped and replaced with a visa that gives no chance to international students to stay in the country after finishing their studies. Rather than abolish the skilled visa program, it should be modified to give preference to top graduates rather than overseas applicants. Not only they are contributing with billions of dollars in tuition fees to the economy, but also the vast majority of them are already established in the country and able to support themselves.

    The only reason those schemes exploiting temporary foreign workers are happening, is because it’s ridiculously hard nowadays for an international student/foreign worker to gain the Permanent Residency. If the government keeps tightening the rules for skilled migration, prepare to see the education sector get shattered and the economy going into a prolonged recession.