Last month, the Migrant Workers’ Taskforce released its final report, which found that “wage underpayment is widespread and has become more entrenched over time”, with as many as half of all migrant workers exploited. Prevalent among the exploited are international students:
Underpayment of migrant workers is certainly not a new problem. It has not recently emerged, but instead it has been a feature of some sectors of the Australian labour market for years. For example, in 2008, the Workplace Ombudsman, predecessor to the FWO, commenced a series of audits of 7-Eleven stores, which uncovered serious underpayments. The Workplace Ombudsman noted at that time that many of the underpaid workers were young international students and were particularly vulnerable to exploitation.
…results from the Wage Theft in Australia report conducted in 2016 indicate that… one quarter of international students and one third of working holiday makers (32 per cent) were paid around half the legal minimum wage…
A research article based on a 2015 study of international students in Sydney found that international students tolerate and accept lower than lawful wages not only because the wage rates can be high in comparison to their home countries, but also that lower than lawful wages are normalised and accepted among their international student peers.
The ACTU has also noted the issue, claiming the perpetual flood of migrant workers is a direct cause of Australia’s anaemic wages growth:
The relatively recent availability of a large and vulnerable pool of temporary migrant workers has undoubtedly contributed to current record low levels of wages growth and a growing reluctance by employers to train local workers…
There have been a range of abuses uncovered which have clearly shown that the entire system is broken. From 7-11 and Domino’s to agriculture, construction, food processing to Coles, Dominos and Caltex, it is clear that the abuses occur in a number of visa classes whether they be students, working holiday makers or visa workers in skilled occupations…
Migration intermediaries have a vested interest in inflating demand. Australia has created a massive industry with many migration agents outside of our jurisdiction who cannot be prosecuted for breaches. This mushrooming “migration industry”- a complex and transnational web of agents, lawyers, labour recruiters, accommodation brokers and loan sharks – is currently largely unregulated.
The growth of labour hire operators alongside the migration industry has led to companies seeking to sell temporary migrant workers to employers, creating a fake “Job Network” which preferences temporary workers over Australians.
These views were echoed by the book, The Wages Crisis in Australia, released late last year by a group of labour market academics:
Official stock data indicate that the visa programmes for international students, temporary skilled workers and working holiday makers have tripled in numbers since the late 1990s…
Decisions by the federal Coalition government under John Howard to introduce easier pathways to permanent residency for temporary visa holders, especially international students and temporary skilled workers, gave a major impetus to TMW [temporary migrant worker] visa programmes.
Most international students and temporary skilled workers, together with many working holiday makers, see themselves as involved in a project of ‘staggered’ or ‘multi-step’ migration, whereby they hope to leap from their present status into a more long-term visa status, ideally permanent residency…
Though standard accounts describe Australian immigration as oriented to skilled labour, this characterisation stands at odds with the abundant evidence on expanding temporary migration and the character of TMW jobs… the fact that their work is primarily in lower-skilled jobs suggests that it is more accurate, as several scholars point out, to speak of a shift in Australia towards a de facto low-skilled migration programme…
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…
With this background in mind, Australia’s universities have been forced to interview international students about their experiences with exploitation, in the hope that it can be eradicated in the future:
UNSW Sydney and the University of Technology Sydney are embarking on a nationwide survey of international students. Launched today, the survey asks international students what help they need to avoid exploitation by unscrupulous employers and accommodation providers.
The survey follows the final report of the Migrant Workers’ Taskforce, released on 7 March 2019. The taskforce, headed by Allan Fels, called on education providers to play a greater role in assisting international students to get the information and help they need to address exploitation.
In 2017 UTS Faculty of Law academic, Dr Laurie Berg and UNSW Faculty of Law academic, Bassina Farbenblum, published Wage Theft in Australia. It found that a quarter of international students were earning $12/hr or less, and 43% of students earned $15/hr or less – well below minimum wage.
“Our research demonstrated that many international students are substantially underpaid at work and exploited by unscrupulous accommodation providers,” Ms Farbenblum said.
Let’s be honest, Australia’s immigration system has become a rort that’s all about lowering costs for employers by crushing wages and abrogating their responsibility for training, while also feeding big business more consumers.
Indeed, the latest data from the ABS, released in February, revealed that the median income of so-called ‘skilled’ temporary migrants was a shockingly low $1,143 per week or $59,436 per year in 2016. This is unambiguously contributing to lower wages growth across the broader economy.
Eliminating migrant abuse and raising wages would be positive for the Australian economy. Why? First, because the least productive businesses would lose people, shrink or close, transferring workers, land and capital to more productive businesses, thereby raising average productivity across the economy. Second, because all businesses, observing higher wages, would invest more in labour saving technologies, training and restructuring to raise productivity.
This is how the labour “market” is meant to work. However, allowing the mass importation of foreign workers circumvents the ordinary functioning of the labour market by enabling employers to pluck cheap foreign workers in lieu of raising wages, as well as abrogating their responsibility for training.
This is negative for both Australian workers and the broader economy, and must be stopped.