MasterThief celebrity chefs ARE the new Australian economic model

Via the Herald Sun comes the age of the celebrity wage thief:

Speaking exclusively to the Herald Sun as the hefty bill was revealed, ­Calombaris rejected claims that years of underpayment were deliberate. He said he had tried to do the right thing at all times.

“I am deeply sorry for what has happened, and have apologised to our affected team members, past and present,” he said.

“There are two important things for Australians to know. The first is that when we discovered there were incorrect payments to members of the team, we self reported to the Fair Work Ombudsman and co-operated with their investigation,” he said.

“The second is that our team members, past and present, have been back-paid in full, and the vast majority repaid before October 2017 in consultation with Fair Work.”

“There is no excuse for this and we have the ­systems in place now,” he said.

…But the ACTU said he should be ­removed from MasterChef. And the hospitality union United Voice claims ­Calombaris should be forever referred to as a “wage thief”.

What can I say? It is apposite to the point of hilarity that Australian celebrity chefs are falling like wheat before the scythe of Australia’s mass immigration economic model. Wage theft is not a bug in this system. It is the system. Calombaris deserves a new show, MasterThief, in which various capitalists compete over which has the best plan to fleece workers. To wit, at Domain:

Other restaurants in the high-end dining industry, associated with Perry, Heston Blumenthal, Shannon Bennett, Teage Ezard, Justin Hemmes and Guillaume Brahimi have all been accused of underpaying staff.

But Neil Perry’s Rockpool Dining Group is by far the largest of the businesses involved with turnover of more than $300 million a year.

…The private-equity-owned Rockpool business agreed to pay back staff $1.6 million last October for a single year of underpayment.

It has since expanded those payments stretching back a further four years. Rockpool Dining Group has not disclosed the amounts involved, but they could be worth, in total, up to $10 million.

However, the payments – which are often about $2000 per year, per employee – have been regarded by many current and former Rockpool chefs as a fraction of what they are owed. Total payouts could end up being much higher.

Every day it is the same. More and more and more examples of wages theft and exploitation. It is not isolated. It is rampant across the services sector as warm bodies sell themselves in the hope of securing a visa, turning labour into a profit centre for capital.

It is driven entirely by the mass immigration growth model which neither controls nor cares about these outcomes. It is loved by the Right because it delivers fat rentiers easier profits. It is loved by the Left because it’s not racist. It is loved by the media because it drives property listings. It is loved by Treasury because more warm bodies boost the Budget. It is loved by the RBA because it doesn’t have to account for its housing bubble. There is nobody left to fight the immense lie outside of MB.
Fight it we must. It’s not just the migrant slaves that suffer. Australia’s migrant slavery economy is the core of broader weak wages growth.  The macro-economic enabler is running mass immigration into material economic slack for the first time ever:

What does macro-economics 101 tell us happens when a perpetual supply shock lands on weak demand? Prices fall.

Piles of micr0-economic evidence also supports the contention that the mass immigration model does not do wage rises:

  • 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 2017, 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 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.
  • 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 released a 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 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 reportrevealed 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 was 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 2018 the government released new laws to combat modern slavery which, bizarrely, imposed zero punishment for enslaving coolies.
  • Over the following few months we witnessed widespread visa rorting across cafes and restaurants, including among high end establishments like the Rockpool Group.
  • Then Alan Fels, head of the Migrant Workers Taskforce, revealed that international students are systematically exploited particularly by bosses of the same ethnicity.

Academic research also supports it. Below are key excepts from Chapter 13 entitled Temporary migrant workers (TMWs), underpayment and predatory business models, written by Iain Campbell:

This chapter argues that the expansion of temporary labour migration is a significant development in Australia and that it has implications for wage stagnation…

Three main facts about their presence in Australia are relevant to the discussion of wage stagnation. First, there are large numbers of TMWs in Australia, currently around 1.2 million persons. Second, those numbers have increased strongly over the past 15 years. Third, when employed, many TMWs are subject to exploitation, including wage payments that fall below — sometimes well below — the minimum levels specified in employment regulation…

One link to slow wages growth, as highlighted by orthodox economics, stems from the simple fact of increased numbers, which add to labour supply and thereby help to moderate wages growth. This chapter argues, however, that the more salient point concerns the way many TMWs are mistreated within the workplace in industry sectors such as food services, horticulture, construction, personal services and cleaning. TMW underpayments, which appear both widespread in these sectors and systemic, offer insights into labour market dynamics that are also relevant to the general problem of slow wages growth…

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… In all, the total number of TMWs in Australia is around 1.2 million persons. If we include New Zealand citizens and permanent residents, who can enter Australia under a special subclass 444 visa, without time limits on their stay and with unrestricted work rights (though without access to most social security payments), then the total is close to 2 million persons… TMWs now make up around 6% of the total Australian workforce…

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 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. One result, as temporary migration expands while the permanent stream remains effectively capped, is a lengthening queue of onshore applicants for 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. It is true that many TMWs, like their counterparts in the permanent stream, are highly qualified and in this sense skilled. However, 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

A focus on raw numbers of TMWs may miss the main link to slow wages growth. 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.37 They suggest an unfolding process of degradation in these labour markets…

And below are extracts from Chapter 14, entitled Is there a wages crisis facing skilled temporary migrants?, by Joanna Howe:

Scarcely a day goes by without another headline of wage theft involving temporary migrant workers…

In this chapter we explore a largely untold story in relation to temporary migrant workers… it exposes a very real wages crisis facing workers on the Temporary Skill Shortage (TSS) visa (formerly the 457 visa) 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…

In Australia, these workers are employed via the TSS visa and they must be paid no less than a salary floor. 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. This protection was considered important because an independent review found that many 457 visa workers were not receiving wages equivalent to those received by Australian workers…

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. In its original iteration back in 2009, it was set at A$45 220. This level was determined by reference to average weekly earnings for Australians, with the intention that TSMIT would be pegged to this because the Australian government considered it ‘important that TSMIT keep pace with wage growth across the Australian labour market’. This indexation occurred like clockwork for five years. But since 1 July 2013, TSMIT has been frozen at a level of A$53 900. ..

There is now a gap of more than A$26 000 between the salary floor for temporary skilled migrant workers and annual average salaries for Australian workers. 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?..

But why would employers go to all the effort of hiring a temporary migrant worker on a TSS visa over an Australian worker?

Renowned Australian demographer Graeme Hugo observed that employers ‘will always have a “demand” for foreign workers if it results in a lowering of their costs’.  The simplistic notion that employers will only go to the trouble and expense of making a TSS visa application when they want to meet a skill shortage skims over a range of motives an employer may have for using the TSS visa. These could be a reluctance to invest in training for existing or prospective staff, or a desire to move towards a deunionised workforce. Additionally, for some employers, there could be a belief that, despite the requirement that TSS visa workers be employed on equivalent terms to locals, it is easier to avoid paying market salary rates and conditions for temporary migrant workers who have been recognised as being in a vulnerable labour market position. A recent example of this is the massive underpayments of chefs and cooks employed by Australia’s largest high-end restaurant business, Rockpool Dining Group, which found that visa holders were being paid at levels just above TSMIT but well below the award when taking into account the amount of overtime being done…

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…

A national survey of temporary migrant workers found that 24% of 457 visa holders who responded to the survey were paid less than A$18 an hour.  Not only are these workers not being paid in according with TSMIT, but they are also receiving less than the minimum wage. A number of cases also expose creative attempts by employers to subvert TSMIT. Given the challenges many temporary migrants face in accessing legal remedies, these cases are likely only scratching the surface in terms of employer non-compliance with TSMIT…

Combined, then, with the problems with enforcement and compliance, it is not hard to conclude that the failure to index TSMIT is contributing to a wages crisis for skilled temporary migrant workers… 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.

It’s not just temporary visas. It is the entire mass immigration model:

  • students, visa holders, tourists all work for nothing to gain longer terms visas;
  • their numbers are endless and so is the labour supply shock;
  • and that endless flow has now generated a supply side adjustment to businesses that thrive on cheap foreign labour – basically service economy dross – that holds up empty calorie growth, boosts asset prices and the currency, holds own productivity via capital shallowing, and hollows out tradables in an era of global lowflation.

Thus everybody can get some work, nobody can get enough of it, participation skyrockets but productivity craters. Wages can’t rise and the economy spirals, literally, into a dumbening singularity.

MasterThief celebrity chefs ARE the new Australian economic model

David Llewellyn-Smith

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.

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Comments

  1. At least Calombaris is paying them. Celebrity chef Adriano Zumbo transferred all his assets to his partner and then declared bankruptcy in order not to pay his employees. Some then discovered that the super accounts Zumbo had setup were fake.

    Zumbo’s now got a new Netflix show, called Sugar Rush, and has opened a restaurant in Noosa.

    • I wouldn’t pat Colambaris on the back. Remember he did assault a kid at a soccer match.Channel 10 is not going to axe MasterChef over this, highest rating show, can’t lose that. I doubt that Qantas would cut ties with Neil Perry.
      Hospitality is the epicentre of wage theft. Just look at a ‘vibrant’ strip like in Box Hill, Clayton, Carnegie, etc.: all adds are written in Chinese/Korean/etc., they have a target market for workers.

      • They’ll use the Don Burke precedent – as long as he doesn’t kill anyone on the station grounds and his ratings are good we are good to go!

        Anyway, it’s all due to Greeks not having big enough families. Once upon a time they could underpay their own kids. Now days they only have Asian foreigners who don’t understand the rules and have no “family” working at the market – yet.

  2. Another boganaire bites the dust. This kulcha of people who cook food for a living being elevated to degrees of significance makes me puke. They are nobody’s. Mere pawns for the elite.

    • +1 these cooking shows, what the heck? You can’t even eat the shyte their cooking or smell the aromas’, not sure why people watch it to be honest.

      • Its like watching porn … You got to open some cans of fish and place them on heaters next to the TV.

    • There is a quote from (I think) Ancient Rome describing the hallmarks of a declining and degenerate society.

      The one hallmark that stuck in my mind is that cooks are elevated to great fame and fortune.

  3. reusachtigeMEMBER

    Oh come on, leave the guy alone. He is a ledgend and was just implementing a profit maximization strategy that works for the vast majority but sadly didn’t for him. He had a go but occasionally you don’t get the go you deserve. You need to have another go.

  4. Douglas Adams wrote about a planet inhabited entirely by hairdresser. I think it’s about time that we sent them the celebrity chefs.

      • The puzzling thing about these celebrity chefs is, they always seem to make the honest mistake of underpaying, not overpaying. Why is that?

  5. Stewie GriffinMEMBER

    There is nobody left to fight the immense lie outside of MB.
    Fight it we must. It’s not just the migrant slaves that suffer. Australia’s migrant slavery economy is the core of broader weak wages growth.

    ROFLMGDAO – and whose going to fight it?

    There is NO Australian identity anymore, and it is racist that anyone would even suggest there is such a thing in our Multicultural nation.

    If some people want to work for lower wages in the EZFKA then we have to accept that their values should be respected, just as we should tolerate people offering lower wages – this is the free market in operation, and the operation of the free market is the ONLY fair way to ensure one particular cultural group isn’t distorting the economic outcome with their values.

    This is who we are now, it is what we celebrate every day – multiple identities. You can’t rally people around a ‘fair go’ identity when it no longer exists.

    • You’re an idiot. Go to rural Australia and you’ll see what u desire. Stop playing with lil boys and open your eyes

      • Stewie GriffinMEMBER

        Ahh maggot you are back again.

        I like it that you occasionally waft into the comments section like the disembodied gas bag that you are.

        There are so many parallels with your current corporal state and the sound that you make every time you open your mouth, and your moment of conception… that is, the sound that was made when your mother pulled the turkey basting rod out of her diseased hole, after inseminating herself with the by product of the Bukkake circle jerk of a variety of South East Asian men with tiny wieners and even smaller brains.

        The only part I have difficulty with is wondering whether the sound is a queef or a fart, because I am sure a turd like yourself could only fully gestate after at least 9 months in someones colon.

      • LMAO, triggered!

        What happened? Your wife run off with some immigrant leaving you alone with your twisted and disgusting fascination with little boys? You dirty ol’ deviant!

      • Stewie GriffinMEMBER

        Triggered, by you!?!?!…. ROFLMGDAO! 🤣🤣🤣

        Hardly, I did enjoy feigning outrage to have you kicked and when that stopped working, meh, I’m equally happy to deal with you in the traditional manner.

        In regards to my previous comment, I’m also wondering if your mother had anal warts and if she pass them on to you when you were birthed? I imagine it would be tough going through life with a face full of them.

      • It’s ok stewy, don’t got too worked up, u might have an aneurysm!

        You really should go bush, it will ease your concerns of Aust losing its culture. Then again, a pansy sookie la la like u probably wouldn’t mix well with the locals!

      • Stewie GriffinMEMBER

        Like your mother birthing you in a long drop dunny, I’m more likely to have an aneurysm taking a dump than conversing with you.

        Lol – so we’re back to ‘pansy’ and ‘la-la sook’ after you’ve run through your list of pedo slurs? Why don’t you employ an immigrant to come up with some new insults the next time you have one over to cuck you wife?

      • Get with the program – it’s “sookie la la”not “la la sook”. You call yourself an Aussie? LMAO

        You’re just one of those sad sacks that cling to nationalism/patriotism cos it gives u a sense of identity and strength. But in all likelihood you’re just a feeble, physically incapable sissy….just ask your wife! 😂

      • Stewie GriffinMEMBER

        I’ve worked from one end of Australia to the other (and on plenty of Australians in between), but I’ve never heard any of them use the phrase “la la sook” or “sookie la la” for that matter.

        I’ve heard plenty of chinless Englishmen use that phrase, especially when they use “Aussie” as a descriptive 3rd person pronoun.

        I suspect your mum was probably some white liberal chick from the bell end of estuary London and that the successful Bukkake contestant that ended up inpregnating her was one of those thin dcked Indians or Pakis who like to congregate there…. so naturally any sense of patriotism or nationalism or even ethnic identity would be completely lost on a mullato like yourself.

      • Stewie GriffinMEMBER

        I’ll take the lack of substance to your reply and the pro-forma insult as confirmation that I’m getting pretty close.

      • Hardly! Ive accomplished my goal given how defensive and triggered you’re getting

        How does it feel knowing your wife is getting plowed by some brown immigrant dong? Oops i forgot, women aren’t really your thing, lil boys is what lights your fire! Gotta uphold those catholic values huh?

      • Stewie GriffinMEMBER

        Yawn, the only triggering I’m getting is the bing on my mailbox when another of your lame replies comes wafting in. In terms of accomplishment the average attendee to a sheltered workshop would get more done in a day than a Geezer boy like yourself has managed in a lifetime.

        Seems like you’ve got your own thing for fixating on abusing little boys – where did that notion arise to use it as an insult? Did your mother hand you around to the grooming gang down at the local Kebab shop for an extra serve of brown sauce?

  6. If someone wants to work for less than the federal government says they should be allowed to work for, then meh. Yet again this is the government hampering the voluntary free bargaining which enriches both parties in the transaction.

    • Plus, how much of this is a case of scammers being scammed?
      Just a way of them earning their permanent residency.

  7. Jumping jack flash

    So true.

    Its the only way to get ahead these days, by stepping on the heads of others.
    An economy built on growing debt will do that. As the necessity for debt becomes greater, more sinister tricks must be employed to obtain more.

    Looking at it another way, there is simply no way that a person could realistically save enough money to buy a house outright now. None at all. Debt is now *required* to purchase a house with any modicum of utility.
    And then if you want furniture, cars, another house, renovations, that’s all more debt that is *required*. Income/Savings is hardly ever used. Savings and income is used primarily to service debt, and possibly a handful of essential living expenses.

    The entire system is an abomination of what an economy should actually be. It is exactly as the banks want it. It has been transformed into a quest for obtaining more debt. To do that we need to raise incomes, just a little bit, enough for the leverage to kick in.

    But how to raise incomes in this super-competitive global market – created that way due to everyone vying for more debt at the same time?

    Enter wage theft. It may not reap much extra wages from the poor immigrant substitute workers they are stolen from, but its enough with low rates and leverage, and equity, to obtain the required amounts of new debt.

    But as is clearly seen in many charts, the debt growth slowed to a crawl after 2008, and only picked up in the last couple of years. and even though it picked up, it is nowhere near the growth rate that we all experienced between 1996 and 2007, and nowhere near the growth rate that is required for a “prosperous economy”.

    • I wouldn’t worry about it too much — the endless debt model is fast drawing to its natural end.

      The mystery that is ‘secular stagnation’ (mysterious, that is to economists exclusively) will be met with vast money creation schemes and then inevitable failure of the debt-based money system. Plenty to look forward to (if you’re one of the few prepared).

  8. nice defense: I didn’t know I have to pay them – I’m make sure I read laws next time around

  9. Slavery is the secret, special ingredient that makes all that fancy restaurant food taste so good.

  10. Hmmm, we should start at MB billboard fund where members submit artwork and vote each month to decide what is displayed. I would chip in for that! It’s easy for people to not read MB but its hard to ignore a billboard. Then again, the outdoor advertising companies that own the billboards are probably owned by population/property Ponzi businesses so they wouldn’t allow it.

    • There was a “Lower Immigration” billboard from SAP in about 2016.

      So I guess any billboard can be erected as long as the words are not against the law.

      • What part about decades of wage suppression under the clarion call of hyper inflation is confusing.

      • Put it this way mate, capital demands its profits [risk adverse] and if not will pack up its bags and seek yield elsewhere, with zero dramas, about a bust, because it can come out on top of a cycle and buy everything up cheap – see Hudson on Brazil et al.

  11. Couple of things … PE – well duh … and its been going on since I’ve arrived in Oz circa 95.

    Yet some go all nuts about a JG, least it does not make some nob wealthy, which only reinforces the nobs feelings about self worth and lording over others or a dynamic for imitation, lest we forget Gresham’s law with self interest [waves at Hayek et al] multiplier.

  12. From “Like your mother birthing you in a long drop dunny,” to “Chair Satan Lowe”

    Gold
    This is why I read MB

  13. “Strangely perhaps, there’s another profession that is disproportionately hallowed as an empire declines. The Romans, the Ottomans, and the Spanish all made celebrities of their chefs.” -comes from The Four Horsemen doc.