41% of international student graduates unemployed or enslaved

A new study from the International Education Association of Australia (IEAA) has found that a large share of international students on subclass 485 (graduate) visas are struggling to find meaningful employment, with 22% not working and many more performing low-paid, unskilled work.

The study also found that the income profiles of these temporary graduate visa holders is similarly dismal to tourists working in Australia on working holiday visas:

Unfortunately, despite these visa holders being young and highly educated with strong English language skills, the report finds they are likelier to be working in low-skilled occupations after they transition from study into the fulltime workforce.

A large proportion (17 per cent) work in low-skilled jobs in retail, wholesale and hospitality. More than one in five are unemployed and looking for work (10 per cent), or are not participating in the labour market (12 per cent)…

Of equal concern is the report’s finding that the income earned by temporary graduates is almost identical to the income profile of those on working holiday visas…

In other words, having paid tens of thousands of dollars for a globally recognised degree, they often are faring no better than backpackers picking fruit…

A quick examination of the Department of Home Affair’s student visa data shows that the number of applications for subclass 485 (graduate) visas ballooned to a record high 70,000 in the year to June 2019:

These visas are particularly attractive to prospective international students because they provide full working rights in Australia for between two years (undergraduate) to four years (postgraduate), without needing to have a job offer, without needing to meet a minimum salary level, and without needing to find employment in their field of study.

Australia’s post-study work rights are also currently the most generous in the world:

And this helps to explain why Australia has succeeded in gaining the largest concentration of international students in the developed world:

Of course, the international education industry has conveniently ignored the deleterious impacts of having so many international students and graduates.

As demonstrated clearly in the recent Four Corners “Cash Cows” report, as well as elsewhere, Australia’s universities have badly lowered both entry and teaching standards in order to boost the inflows of non-English speaking international students.

Cheating and plagiarism has become widespread and domestic students have been forced to carry the load and cross-subsidise the marks of international students via group assignments.

The flood of international students and graduates into low-skilled jobs has also increased competition in the labour market and crushed wage growth, as noted recently by the Grattan Institute:

As the Productivity Commission noted, where migration does displace existing populations, it tends to affect people with low skills and youth most. That seems to be happening in Australia. And because international students and backpackers are primarily looking for part-time work, they may affect under-employment more than unemployment…

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.

If the education industry and federal government truly cared about the welfare of domestic students and young job seekers, it would not allow this situation to persist. It would clamp down on the international student trade by dramatically lifting English-language (entry) standards, as well as requiring graduates to have a job offer from within their field of study.

However, we all know that the situation is unlikely to change. The reality is that the education industry and federal government has become addicted to the fee revenue on offer from international students, which hit a record high $15 billion in 2018:

No amount of scandals and malfeasance will cause a shift in policy that would put at risk this fee revenue.

When it comes to international students, money talks, public policy walks.

Comments

  1. CraftsmanMEMBER

    Is there a economic term that describes the reduction in quality of outcomes for individuals occurs when a economic market (eg houses or education) has supply or policy that causes overstimulation for initial gain (for a few) but causes greater damage later?

  2. And what is the impact on Aussie born graduates?

    Oh what a time to be alive and in your youth (20s 30s and 40s) in this country! Education debts, limited work opportunities mostly in services or pointless government beurocracy, housing assets so expensive you abandon any plans to have children and spend 15 years saving for a deposit so you can be out bid by money laundered from China.

    Oh what joy! What prosperity and hope for the future one must have!

  3. Enjoy the Strayan Dream, they said. Clean air, water and environment. Great beaches! Free education, healthcare … all sorts of free stuff. Even a pension.

    The price? An expensive visa, a worthless, overpriced education and a job at the end of it collecting trolleys at Coles.

    Enjoy.

    • Yep, breeding a generation of discontent, expect an increase in racism, inter ethnic clashes on our streets, more terrorists, increased crime etc of not just new migrants brunt our own young, just so some polly can claim good figures while they are in power. How good is ‘stralia!

      • Australia was recognised in the 1990’s as the benchmark of integration. It ran a very high immigration rate in the 1950’s, but obviously under an assimilation program which strengthened Australia, rather than the multicultural model where diversity is our weakness.

        The markers back then were the low proliferation of ethnic ghettos, and the highest in recorded history rates of intermarriage between the children of prevailing population and the children of the immigrant population.

        Basically it boiled down to, if the immigrant population felt they were getting a fair go they got on, and the children marrying each other was accepted proof the prevailing population accepted the immigrant population and vice versa.

        The earlier part about ‘getting a fair go’ was looked at with the harvester ruling, since rescinded by John Howard, which was the court ruling that a worker should be remunerated enough to be able to provide a frugal existence for a spouse and 2 children.

        Hence the historically high minimum wages, working immigrants would forge their own way rather than clinging to ethnic ties out of desperation.

        It worked.

        Now consigned to the dustbin, another loss during the disastrous Howard years, but this is again, meant the be THE FIGHT that underwrites Labor’s reason to exist.

        They need a kicking.

    • I have a mate whose entire business is staffed by vibrants — apart from his PA, who is a local lady.

      It’s certainly worked for him – he makes millions every year. Like owning a printing press.

        • Definitely, food for thought, Reus. However, she’s one of these PA’s that’s also the de facto boss — the place wouldn’t run smoothly without her. I’m not sure a vibrant would necessarily fit the bill even if she comes with some additional, er, ‘perks’.

          It’s one thing to cut costs to the bone but to be truly profitable you need the best people in the key positions!

  4. No future for many of these people as the economy is like to contract rather than grow and new tech will kill many low skill jobs. Yet they still let more no/low types into the country.

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