ACTU joins Business endorsing Big Australian Ghetto


Baptists and bootleggers all off the cliff together, via The Australian:

Big business has joined forces with the ACTU in an unprecedented compact to back a Big Australia, calling on the federal government to maintain current levels of permanent migration amid calls for the rate to be cut.

The historic coalition of peak unions, employer groups and the ethnic lobby will release a united policy document today warning of the economic and social consequences of dropping the annual migration rate.

The ACTU’s involvment comes as it embarks on a high-profile campaign to rein in employers’ access to temporary foreign workers.

The first migration document of its kind in the nation’s history calls for the current goal of an ­annual intake of 190,000 to be ­retained, with long-term levels set proportionally to the population.

…But the unified stance is designed as a ­circuit-breaker to the increasingly heated immigration debate, which the signatories believe has become toxic, xenophobic and at risk of ignoring the economic benefits that underpin skilled migration.

The document, spearheaded by the Migration Council, signals the first time unions and employer groups have reached general agreement on temporary skilled migration but based on stricter policing of the program.

Signatories to the compact — announced today in an advertisement in The Australian — include the Migration Council of Australia, the Australian Council of ­Social Service, the Federation of Ethnic Communities Councils of Australia, the Settlement Council of Australia and migration lobby group Welcome to Australia.

It will also involve the Business Council of Australia in what the compact’s signatories claim is a “historic” agreement between business and the trade ­unions for the economic good of the country.

We’re all racists now, apparently. At least according to the business lobbies that want free demand growth and lower wages, unions that are beholden to building, and media which is a glorified real estate agent. Yes, all will be losers if immigration is cut.

But the nation won’t. It will go through an adjustment period in which growth in the debt-addicted urbanisation sector is replaced by growth in the much more sustainable tradables sector as the currency tumbles. Over the long run we’d be much better off.


It’s all upside for the businesses to be involved in the compact. I suppose it’s understandable that social services groups have joined in. They are card-carrying Fake Lefties that long ago lost class consciousness in favour of identity politics. They can look forward to floods of new clients as living standards fall.

The ACTU’s involvement is half good and half bad. It’s proposals for temporary workers have some teeth:

The Australian Council of Trade Unions has today released a five-point plan to boost local jobs and end the exploitation of temporary visa workers.

Australia has a widespread unemployment crisis in many regions, caused by employers’ over-reliance on temporary visa workers.

And with one in ten people in the Australian labour force on a temporary visa, Australia has an underclass of easily exploitable workers.

The system of employer-sponsored “guest” workers gives employers all the power. It results in vulnerable workers being regularly exploited, underpaid, and often forced to work in dangerous conditions. Too often they can’t speak up for fear of not just losing their jobs, but also being deported.

The use of vulnerable temporary visa workers also undercuts local job and removes incentives for governments and employers to train local people. Simultaneously, the government has cut funding from TAFE and privatised much of the vocational education sector.

Some employers are using temporary visa workers to avoid employing and training local workers, and in some regional areas of Australia, youth unemployment is as high as 20%.

Our five-point plan to bring back fairness:

1. Ensure local workers get the opportunity to be trained and employed in secure jobs in their local area;

2. End massive exploitation of hyper insecure temporary visa workers by ensuring that these workers are paid market rates and have their rights at work protected;

3. Change our immigration program to favour permanent over temporary migration;.

4. Temporary work visas must only be used when there are cases of genuine skills shortages that can’t be filled by locals;

5. Rebuild TAFE so people can get the skills they need.

Quotes attributable to ACTU Secretary Sally McManus:

“The government allows racist attacks on migrants from its own Ministers, while allowing employers to import and exploit a cheap source of labour – temporary visa workers.

“Now, one in ten workers in Australia is on a temporary visa. Whether it is 7-11, farms, construction sites, meat processing factories or in hospitality, temporary visa workers are being exploited. This has to end.

“Local workers deserve the opportunity to gain secure employment. Jobs must be properly advertised locally, and people must be able to get the training they need to pursue these opportunities.

“We need to change the rules so employers are forced to advertise locally, and is only able to import workers for genuine skills shortages.

“Australia’s migration program must, as it did previously, favour permanent migration, so people can come to Australia, with their family, and build a life for themselves – with the same rights that we all deserve.

“Temporary visa workers in Australia must be given basic rights, such as access to a union and being paid properly.

“All workers, no matter where they are from, should have the right to be paid properly, have basic job security and to be safe at work.”


Too right. The problem is the immigration economy today looks ungovernable. Is the ACTU going to deploy wage police across every services joint in Western Sydney and Western Melbourne? Previously via Domainfax:

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.

Moreover, how does the ACTU plan to overcome the perpetual supply side shock it has just endorsed for the overall labour market? Back in November, Robert Skidelsky, Professor Emeritus of Political Economy at Warwick University, penned an excellent article in Project Syndicate which, among other things, explained why never-ending mass immigration pushes down wages growth:


Standard economic theory tells us that net inward migration, like free trade, benefits the native population only after a lag. The argument here is that if you increase the quantity of labor, its price (wages) falls. This will increase profits. The increase in profits leads to more investment, which will increase demand for labor, thereby reversing the initial fall in wages. Immigration thus enables a larger population to enjoy the same standard of living as the smaller population did before – a clear improvement in total welfare.

recent study by Cambridge University economist Robert Rowthorn, however, has shown that this argument is full of holes. The so-called temporary effects in terms of displaced native workers and lower wages may last five or ten years, while the beneficial effects assume an absence of recession. And, even with no recession, if there is a continuing inflow of migrants, rather than a one-off increase in the size of the labor force, demand for labor may constantly lag behind growth in supply.

This analysis followed an empirical study by the Bank of England, which found that immigration into the UK had pulled down average wages:

This paper asks whether immigration to Britain has had any impact on average wages. There seems to be a broad consensus among academics that the share of immigrants in the workforce has little or no effect on native wages…

We find that the immigrant to native ratio has a small negative impact on average British wages. This finding is important for monetary policy makers, who are interested in the impact that supply shocks, such as immigration, have on average wages and overall inflation. Our results also reveal that the biggest impact of immigration on wages is within the semi/unskilled services occupational group… where a 10 percentage point rise in the proportion of immigrants is associated with a 2 percent reduction in pay.

…the impact of immigration on wages in semi/unskilled services is much larger than can be accounted for by purely compositional effects, suggesting that the vast majority of this effect refers to the impact on native workers.


And after the UK cut immigration, the Financial Times has reported that UK wages are finally rising as employers lose pricing power:

Nik Wyers cannot find enough workers for Floorbrite, his office cleaning company in Manchester. So for one recent contract, he had to up Floorbrite’s hourly rate from £8.50 to £10.

“The cleaning staff that are available are able to pick and choose which jobs they accept,” he said. “We have been forced to increase the rate of pay. It’s not an ideal solution.

“Mr Wyers is not alone. The Bank of England believes that after nearly a decade of stagnation, it is seeing evidence of rising wages as companies are forced to pay more to fill their vacancies…

I’m guessing that Sally McManus is driven by some perverse combination of wowserishness and CFMEU interests (which likes the building). A much simpler and more effective solution for the labour market is to halve the permanent migrant intake as you police industrial relations.


So, dear friends in Sydney and Melbourne, I’m afraid it’s more falling living standards for you. Crush-loaded infrastructure, lower environmental and services amenity plus lower wages. It will be especially bad in the west of the cities which will continue to devolve into crush-loaded, low wage special economic zones so that the east can live high on hog. Our very own little de-merging markets.

We can at least draw comfort from the growing housing bust, which looks unstoppable despite the people ponzi. More people will now only result in more folks living together under the same roof rather than rising prices given the falling availability of credit.

Which is only appropriate in the Big Australian Ghetto.

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.