The Australian Chamber of Commerce & Industry (ACCI) has warned that wage exploitation is a systemic problem. The ACCI has used its pre-Budget submission to urge the federal government to provide the Fair Work Ombudsman (FWO) with extra funding to combat wage underpayment, arguing that it needs an additional 50 workplace inspectors. The ACCI has also proposed hiring more workplace inspectors with foreign-language skills, noting that wage exploitation is particularly a concern within migrant communities. From The SMH:
“…there is clear and increasing community concern that underpayments are too frequent and widespread… One of the things that’s been revealed in recent times is that, unfortunately, some of the underpayment and other practices have been occurring in migrant communities or workplaces where the first language for a lot of the workers is not English,” Mr Pearson said.
“Making it easier to communicate with people, both employers and employees, in those workplaces – and making it easier for them to report what’s going on – can only be a good thing”…
The Australian Council of Trade Unions dismissed the ACCI submission, saying an extra 50 inspectors would not be sufficient to police the nation’s 12 million workplaces “in an environment where wage theft has become a business model for many unscrupulous business owners”.
In 2017, the FWO revealed that foreign workers are involved in more than three-quarters of legal cases initiated by the FWO against unscrupulous employers. Whereas last year it was revealed that nearly three-quarters of businesses in the hospitality industry audited by the FWO across Melbourne, Sydney and Brisbane had breached workplace laws.
The issue was also highlighted in all of its hideous glory in the Senate Education and Employment References Committee’s scathing report entitled A National Disgrace: The Exploitation of Temporary Work Visa Holders, which documented the abuses of Australia’s visa system for foreign workers.
Similarly, the book, The Wages Crisis in Australia, released late last year by a group of academics dealt specifically with the great Australian migrant wage rort (summary here), with the below paragraphs capturing the essence:
Scarcely a day goes by without another headline of wage theft involving temporary migrant workers…
Put simply, temporary demand for migrant workers often creates a permanent need for them in the labour market. Research shows that in industries where employers have turned to temporary migrants en masse, it erodes wages and conditions in these industries over time, making them less attractive to locals…
…It is the third point concerning underpayments and predatory business models that seems richest in implications. This point suggests, first and most obviously, added drag on wages growth in sectors where such underpayments and predatory business models have become embedded. If they become more widely practised, underpayments pull down average hourly wages. If a substantial number of firms in a specific labour market intensify strategies of labour cost minimisation by pushing wage rates below the legal floor, it can unleash a dynamic of competition around wage rates that foreshadows wage decline rather than wage growth for employees…
Increases in labour supply allow employers in sectors already oriented to flexible and low-wage employment, such as horticulture and food services, to sustain and extend strategies of labour cost minimisation… The arguments and evidence cited above suggest a spread of predatory business models within low-wage industries. They suggest an unfolding process of degradation in these labour markets…
That’s a key driver of Australia’s low wages growth right there: the systemic rorting of Australia’s visa system, which is undercutting local workers’ bargaining power, pay and conditions.
Think about it from an employer’s perspective: why would you grant a pay rise when you can easily replace a local worker with a migrant willing to work for less? You wouldn’t. Nor would you bother to train-up a local.
The problem of low wages growth won’t be solved until the avenue for cheap foreign labour is closed-off via restricting immigration – both temporary and permanent.
