The Fair Work Ombudsman (FWO) has investigated 22 Subway franchisees for compliance with workplace laws. It found that 18 of the franchisees had underpaid their employees, and the investigation has resulted in 167 current and former employees being paid more than $81,000 in outstanding wages. The FWO has recovered nearly $150,000 on behalf of underpaid Subway staff over the last two financial years. From The AFR:
“The FWO is very concerned by the rates of non-compliance we have seen in the Subway franchise network and has a number of ongoing lines of inquiry into their operations,” she said.
She said half of the underpaid Subway employees were young workers or from a migrant background, which can make them particularly vulnerable to exploitation.
“For many of these workers, it might be their first job and they could be unaware of their workplace rights or scared to raise issues with their boss.”
What can we say? It’s the same pattern over and again: franchise business model; migrant preponderance; youth targeted and bullshit services sector jobs.
It is the new Australian economic model centered cheap labour migrants, low rent service provision and theft.
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Mass immigration is the macro-economic enabler. The evidence of this is overwhelming. There was one unprecedented change to Australian macro conditions in this cycle that made wage growth impossible. Australia has never run mass immigration into material economic slack before but that’s what we did this time:
What does macro-economics 101 tell us happens when a perpetual supply shock lands on weak demand? Wage prices fall. As noted recently by the Grattan Institute:
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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.
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.
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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.
The only fix is to radically cut immigration, both temporary and permanent.
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
