The ACTU has failed workers yet again, proposing a ridiculously low wage floor for temporary skilled workers of only $62,000 a year:
A senate inquiry into Australian business’ use of temporary work visas has recommended significant tightening of the scheme. The ACTU argued that the current rules deny locals jobs and training opportunities, depress wages and allow businesses to exploit of temporary visa holders.
The report by the Senate Legal and Constitutional Affairs References Committee recommends:
– Banning the use of ABNs to employ temporary visa holders
– Raising the income threshold for skilled migrants to $62,000 a year and indexing it annually
– Requiring industry bodies rather than bureaucrats conduct skills tests
– Requiring the government to provide evidence for occupations they want to open up to temporary visa holders
– Increasing TAFE funding for local workers
– Requiring more evidence for labour market testing to ensure locals are not being passed over for work
– Enabling workers representatives to bring civil cases for breaches of the rules by employers
– Ensuring people working in licensed occupations actually holds a valid Australian license
The ACTU argued for the earning threshold to be raised because there was a $26,000 salary gap between that employers could exploit to drive wages down by hiring temporary visa holders rather than hiring and training locally.
The salary floor for Temporary Skills Shortage (TSS) visas has been frozen at a pitifully low $53,900 since 2013-14, which is $32,700 below the current average full-time Australian salary of $86,600 (comprising both skilled and unskilled workers).
Joanna Howe, Senior Lecturer in Law at University of Adelaide, explained the ramifications of this TSS wage floor in the recent book, The Wages Crisis in Australia:
This crisis has been precipitated by the federal government’s decision to freeze the salary floor for temporary skilled migrant workers since 2013… the government has chosen to put downward pressure on real wages for temporary skilled migrants, thereby surreptitiously allowing the TSS visa to be used in lower-paid jobs…
This salary floor is called the Temporary Skilled Migration Income Threshold (TSMIT). TSMIT was introduced in 2009 in response to widespread concerns during the Howard Government years of migrant worker exploitation…
In effect, TSMIT is intended to act as a proxy for the skill level of a particular occupation. It prevents unscrupulous employers misclassifying an occupation at a higher skill level in order to employ a TSS visa holder at a lower level…
TSMIT’s protective ability is only as strong as the level at which it is set… But since 1 July 2013, TSMIT has been frozen at a level of A$53 900…
This means that the TSS visa can increasingly be used to employ temporary migrant workers in occupations that attract a far lower salary than that earned by the average Australian worker. This begs the question — is the erosion of TSMIT allowing the TSS visa to morph into a general labour supply visa rather than a visa restricted to filling labour market gaps in skilled, high-wage occupations?..
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…
So the failure to index the salary floor for skilled migrant workers is likely to affect wages growth for these workers, as well as to have broader implications for all workers in the Australian labour market.
Given the above, it is not surprising that actual pay levels of ‘skilled’ migrants in Australia is abysmally low.
According to the ABS’ most recent Personal Income of Migrants survey, the median employee income of migrants under the skilled stream was just $55,443 in 2013-14.
In a similar vein, separate ABS data revealed that Temporary Work (Skilled) visa holders earned a median income of only $59,436 in 2016.
While the ACTU is 100% correct in recommending an increased skilled migrant wage floor, why has it chosen a level ($62,000) that is still $24,600 below the average full-time Australian salary of $86,600, which again comprises both skilled and unskilled workers?
Why hasn’t the ACTU demanded a wage floor that, at a minimum, matches average full-time earnings and preferably exceeds them? These are supposed to be ‘skilled’ workers after all.
Because under the ACTU’s policy, employers will continue to reach out for cheap foreign workers en masse instead of employing and training locals, and will continue to undermine wages.
