International students swamp Australia’s job market

The latest student visa data from the Department of Home Affairs revealed that the number of temporary graduate (485) visa applications lodged surged to a record high 68,917 in the year to June 2019:

This surge has been driven by post-study work visas:

With Indians leading the applications lodged:

Graduate (485) visas are considered one of the most attractive of their kind in the world because they provide full work rights to international students and allow them to remain in Australia for 2 to 4 years following their studies.

They are also treasured by international students because they are widely perceived as a pathway to permanent residency.

Following a strategic review of the student visa program in 2011 (‘the Knight review’), the Gillard Government liberalised graduate (485) visas in 2013. Specifically, 485 visa holders were excluded from needing to meet the Australian standard for an occupation on the Skilled Occupation List. They were also permitted to remain in Australia for between two and four years post study, rather than the previous 18 months.

The Knight review was strongly in favour of expanding post study work rights because of the significant benefits to Australian universities and Australian employers. That is, following these changes, international students would be more likely to choose to study in Australia because of more favourable visa arrangements.

Peter Mares explains:

Knight stated plainly that an expanded work visa was essential to “the ongoing viability of our universities in an increasingly competitive global market for students.” Vice-chancellors also made the connection explicit. At the time, Glenn Withers, chief executive of Universities Australia, said that Knight’s “breakthrough” proposal was as good as or better than the work rights on offer in Canada and the United States.

As usual, the deleterious impact on Australia’s labour market from the expansion of graduate (485) visas was glossed over by the Knight Review.

While the Review did acknowledge that international graduates could find work in low-level jobs unrelated to their studies, it claimed that wages and other benefits would compare favourably against their home countries. Moreover, the Review ignored the deleterious impacts on local graduates, who would suffer from increased competition for jobs and lower wages.

Again, unlike temporary skilled shortage (TSS) visas, holders of graduate (485) visas are not required to be qualified for any of the jobs on the Skilled Occupation List. They do not need a firm offer of work from an employer. They are not required to be paid a minimum salary. Nor must they find a job related to their qualifications or require a certain level of skill.

Basically, 485 visa holders may work or study in any job, for any employer. And their visa remains valid even if they cannot find a job.

The explosion in graduate (485) visas, therefore, represents a positive labour supply shock that has lowered the bargaining power of younger Australians and local graduates, in turn placing downward pressure on wages.

But that is not the end of the story. As we already know, there were 690,000 international students enrolled in Australia’s tertiary institutions as at June 2019:

These students are permitted to work 20 hours per week, and some work more hours illegally.

As noted recently by the Grattan Institute, the flood of international students is also placing downward pressure on Australian wages, especially for those aged 20-34:

Of those temporary visa holders who do work, most (59 per cent) are in low-skill occupations. Of those with student and working holiday visas who work, even more (about 75 per cent) are in low-skill occupations…

Low-skill migrants might also put downward pressure on wages (if accurately measured). The measured wages of those aged 20 to 34 have not risen as fast as the wages of older workers for some time (Figure 7)…

Australia is now running a predominantly low-skill migration system. People from this system form a material proportion of the younger workforce. Because of visa conditions, many of these migrants have incentives to work for less than minimum wages, and there is anecdotal evidence that many do. It is impossible for data sources on the Australian labour force to pick up all of this phenomenon. It is possible that the scale of this influx to the labour market is depressing wages and increasing under-employment specifically for low-skill younger workers.

The biggest beneficiaries from this system are Australia’s universities, which profit from the increased tuition fees, alongside employers, which benefit from lower wage costs.

The biggest losers are younger Australians, who are facing greater competition for entry-level and graduate jobs, lower wages, as well as greater competition for housing.

It is time to tighten the visa system up. Otherwise, wage growth will never recover.

Comments

  1. If you can’t beat them, join them – get a job at one of our fine Universities. That’s where the gold is!

    • Jumping jack flash

      My wife is almost ready to begin growing her contracting business and was wondering how best to do it. Its a big step and she’s a bit anxious.

      I suggested to employ some Indian students and pay them $10/hr, charging them out at $35.. she looked at me funny.
      The problem is the quality of work. If it didn’t matter as much, then sure.

      It is the only way though. Indebted locals need too much money, and nobody is willing to pay more. One of the reasons she’s still getting work is the fact we have no gargantuan mortgage sucking on us like a crazed leech.

    • Stewie GriffinMEMBER

      Too right!

      Dr Demography aka Liz Allen is one of the biggest pushers for big Australia within the ponzi pumping scene.

      Of course she constantly mouths about diversity, evils of white people and sympathy for the young and poor, but there are few Australians more hypocritical than that sea cow, as she feathers her own nest as a University lecturer and uses every TV appearance to argue for the very policies that have sent young peoples quality of life plummeting.

      She should do her next doctorate in Hypocrisy, hell the Uni should just give her one as she’s already done most of the leg work.

      • An honorary doctorate in hypocrisy surely must be around the corner, but there will be lots of these to give out.

  2. Foreign students have been destroying job opportunities since 2000.

    It is a miracle that the AUS unemployment rate went down to a reasonable level in 2008 and the AUS media was saying “the unemployment rate will be lower in 2009”.

    Unfortunately, the unemployment rate went up in 2009 and the fake left has flooded Australia with 3 million job stealers since then!

    Trump is not giving out H1B visas to Indian IT firms as readily as Obama did and the unemployment rate in USA is at a 45 year low. Theresa May performed the same miracle in Britain but she has been booted out.

    • Jumping jack flash

      Cheap foreign workers were necessary in 2006 to regulate the out of control debt inflation by lowering wage inflation.

      Then after the wages slowed we realised that the debt was necessary to grow the economy so the foreign workers were brought in to obtain debt. But that didn’t really go according to plan. They had a plan ‘B’ though, but not as effective so now we’re in this mess because the debt isn’t growing fast enough.

      The workers are here to stay and not going anywhere.

  3. The entire visa system needs a Royal Commission.
    Totally corrupted.
    And what better place to start than the ‘foreign student’ migrant trafficking racket?

    The foreign students are just 27% or 712,000* of the 2,561,000 TR / SCV third world unskilled migrant foreign nationals living and working illegally in visa breach.

    (enrolment data isn’t the full picture. Some are double enrolled, others not at all with the courses being deliberately designed to have very long breaks to maximise legal & illegal work)

    ▪️712,000 foreign students▪️
    🔹615,000 as a primary visa holder
    🔹58,000 as a ‘partner’ full work rights no English test
    🔹39,000 on DFAT / special visas

    Source DHA & VisaSure.

    90% concentration in Sydney & Melbourne.
    640,000 in just those 2 cities
    Occupying some 120,000 ex Australian dwellings in just those 2 cities at twice the average (and illegal) occupancy density – invariably in an modest established ex Australian dwelling now foreign owned and converted to migrant only slumshare.

    Why we have 116,000 Australians as permanent homeless and another 360,000 Australians seeking affordable housing.

    -/-
    Not an export.

    A $31 billion mostly illegal working sub economy.
    Average economic activity $43.7k each
    About half the Australian average reflecting they are third world poor unskilled and working in the black market cash economy, no tax, fake ID.

    Tens of thousands of end of life Asian prostitutes, the epi-centre of the foreign criminal syndicates vice trade. (vice is a ‘legal occupation’ for a foreign student, no health checks, no ID verification, cash / no taxation. co
    The epi-centre of labour rings & ABN fraud.

    Hundreds of thousands of Chinese, Indian, Nepalese, Bangladeshi, Malaysian, Indonesian, Thailand, Korean and other third world slum clearance or rural poor on a pretext visa alibi.

    Lowering the Australian gdp per Capita by 2.8%
    Lowering Australian wages by 6.8%.
    Raising the cost of living
    Denying Australian education, employment, housing.
    -/-
    Not an export.

    They only pay a net of $8.3 billion in fees
    (Deloitte Access economics report / mode 2 onshore net fees paid).
    The vast majority are doing very low level nonsense courses that are available online or free in their home country.
    Their progression rate is only 3.9% into a high income profession, here or in their home country
    (Migrant Pathways A Decade On & the Productivity Commission reports – not a suitable intake for PR)

    Exposing just what a total farce this ‘foreign student education industry really is – 96% of these so called students fail to ever be useful or productive.

    Not an export.

    Their fees are paid from money earned here.

    They bring in less than $2.5 billion in ‘self declared’ or once only checked funds (heavily frauds) & yet the outflow to pay back the foreign criminal syndicates and agent procurer or remittances exceeds $5.4 billion.

    75% work illegally (Syd Uni & UTS study)

    That statistic alone means they displaces over 530,000 Australians, our young, most vulnerable, and now mature age in jobs as well as housing.
    That alone costs the Australian taxpayer over $9.3 billion in unemployment impact.

    Not an export.

    Negative economically & socially.

    Third world unskilled Asians and Indians, Nepalese, Bangladeshi, lowlife trafficked on nonsense courses to work illegally.
    Job theft
    Housing theft
    Crime
    Vice
    Money laundering
    Visa fraud
    Our education system degraded 10 places globally as it prostituted itself as a migrant guestworker trafficking alibi.

    A Royal Commission of enquiry into the entire ‘foreign student industry’ and our totally corrupted visa system is long overdue.

  4. Appalling! Once everyone else who can work has a job, then give out work visas. And stop this stupid bridging visa rubbish. This government is destroying us. More than one industry has been annihilated by Asians who play the visa game and work 24/7 sending most of the dollars back to Asia.