Greg Jericho prints more corporate wage-crushing propaganda

From Greg Jericho today:

The single biggest boast the Liberal party has been able to cling to has been strong employment growth. This year the talk has mostly been about the record growth of 2017, and such a line would get a tad tired by the time 2019 comes around. But should things pick up in the same time frame that they have in the past three years, then by May next year the government will be talking about an improving situation.

That will still see them having to worry about the issue of wages growth and household incomes. But in an economic sense – and thus leaving aside the leadership shenanigans and a complete lack of a policy on climate change – the election may very well hang on whether the government can convince voters their policies have made getting a job easier, and that better wages and income will follow.

Because while employment growth might improve by next year, its current slowdown hints that time could be running out for wages growth to significantly start improving by the next election.

It seems that Jericho is arguing that supply and demand determine wages in the labour market. But that can’t be right because according to Jericho the additional supply of cheap foreign workers has had no impact on the price wages. Jericho discussed this at length recently:

Yes, migrants affect the supply of labour, but they also increase the demand for goods and services, which creates a demand for more workers to produce those goods and deliver those services.

And were the influx of migrants leading to residents missing out on jobs, you would expect the percentage of adults in work would fall… However, the percentage of 25- to 64-year-olds in employment is higher now than at any time in our past…

Actually, what you’d expect in a permanently supply-shocked, flexible labour market is for hours worked per person to fall and for underemployment to become chronic, which is exactly what is happening:

Evidence for how this industrial relations breakdown has transpired at the coal-face is absolutely everywhere:

• For years we have seen Dominos, Caltex, 7-Eleven, Woolworths and many other fast food franchises busted for rorting migrant labour.
• 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 systemic abuses of Australia’s temporary visa system for foreign workers.
• 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 last year 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.
• 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.
• A few months ago, Fair Work warned that most of Western Sydney had become a virtual special economic zone in which two-thirds of businesses were underpaying workers, with the worst offenders being high-migrant areas.
• Dr Bob Birrell from the Australian Population Research Institute latest report, 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 Australian Bureau of Statistics (ABS) latest Characteristics of Recent Migrants report, 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%).
• ABC Radio recently highlighted the absurdity of Australia’s ‘skilled’ migration program in which 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.
• In early 2018 the senate launched the”The operation and effectiveness of the Franchising Code of Conduct” owing in part to systematic abuse of migrant labour.
• Then there is new research from the University of Sydney documenting the complete corruption of the temporary visas system, and arguing that Australia running a “de-facto low-skilled immigration policy” (also discussed here at the ABC).
• In late June the government released new laws to combat modern slavery which, bizarrely, imposed zero punishment for enslaving coolies.
• Over the past few weeks we’ve witnessed widespread visa rorting across cafes and restaurants, including among high end establishments like the Rockpool Group.
• Alan Fels, head of the Migrant Workers Taskforce, revealed that international students are systematically exploitedparticularly by bosses of the same ethnicity.

Jericho himself made this supply/demand imbalance obvious just last week:

For most job seekers the biggest change since the GFC has been the increase in competition for each job – 17% said in 2018 that was the main difficulty in finding work, compared to just 8% in 2008:

That would be foreign workers pouring into an already oversupplied labour market.

Even Treasury’s recent immigration propaganda report admitted that most new jobs created in Australia have gone to migrants:

Recent migrants accounted for two-thirds (64.5 per cent) of the approximately 850,000 net jobs created in the past five years. For full-time employment, the impact is even more pronounced, with recent migrants accounting for 72.4 per cent of new jobs created.

Various Productivity Commission modelling has also shown that immigration lowers the wages of incumbent workers (see here). These results were confirmed recently by modelling from Victoria University (see here). Several notable Australian economists have noted similar.

International analysis from the Bank of England and Cambridge University also shows that immigration reduces wages growth (see here).

The economics is simple: continually increasing labour supply via immigration necessarily reduces workers’ bargaining power and ergo wages growth. This was explained beautifully by The Australia Institute’s chief economist, Richard Denniss, last year when he noted that the very purpose of foreign worker visas is to “suppress wage growth by allowing employers to recruit from a global pool of labour to compete with Australian workers”. That is, in a normal functioning labour market, “when demand for workers rises, employers would need to bid against each other for the available scarce talent”. But this mechanism has been bypassed by enabling employers to recruit labour globally. “It is only in recent years that the wage rises that accompany the normal functioning of the labour market have been rebranded as a ‘skills shortage’”.

Heck, even left-leaning economist, Stephen Koukoulas, noted similar recently on Twitter:

We know the real reason that Jericho has abandoned all reason to become what Vladimir Lenin labelled the “useful idiot”, the gullible propagandist of corporate blood-suckers:

Immigration – because there are many desperate to hate – must be treated with extreme care by politicians and journalists, and certainly with more care than Abbott seems capable. The inherently racist parties will seek to use any discussion and any seeming evidence of the negative impact of migrants as fuel to burn their fires of hate.

Doing God’s work.