Abul Rizvi: $53,900 wage floor too high for ‘skilled’ visas

Abul Rizvi, former Deputy Secretary of the Department of Immigration and one of the architects of Australia’s faux ‘skilled’ migration program, has penned an article claiming that the $53,900 wage floor for regional skilled migrants is too high:

On 16 November 2019, the Government’s much-touted regional migration visas took effect.

One of these is a five year provisional visa that requires the migrant to be nominated by a state or territory government. To secure permanent residence, the provisional migrant must live and work in the relevant region and earn at least $53,900 per annum for a minimum of three financial years. If state or territory governments actively participate in this visa, they will be collaborating with the Commonwealth to set up many of these migrants for exploitation and failure.

For people living in Melbourne or Sydney, $53,900 per annum that may seem not a particularly high salary.

But getting a job that pays that much in many of our regional areas is extraordinarily difficult.

Jobs that pay $53,900 per annum to recent graduates – most of the migrants applying for this visa will be relatively recent graduates – are not common in South Australia or Tasmania or indeed in many parts of regional Australia. Average weekly earnings for all persons working in the private sector in South Australia in May 2019 was $1005.10 ($52,265 per annum). In Tasmania, this was $948.50 ($49,322) per week.

At the 2016 census, median employee income for major regional centres was substantially below $53,900 per annum, in towns like Albury, Dubbo, Geelong and Rockhampton.

While in time most skilled migrants achieve much higher salaries, to expect them to do so soon after graduation risks them being exploited and/or being put into immigration limbo.

First, why has Abul Rizvi cited the “average weekly earnings for all persons working in the private sector” rather than the average full-time earnings of those working in the private sector (i.e. $73,000 in South Australia; $68,900 in Tasmania)?

Surely we aren’t bringing in hordes of ‘skilled’ migrants so they can work part-time? Moreover, these are supposed to be ‘skilled’ workers, so shouldn’t they be paid significantly higher wages than the average, which includes unskilled workers?

The fact of the matter is that the existing $53,900 Temporary Skilled Migration Income Threshold (TSMIT) has been frozen in place since 2013-14, and has fallen $23,000 below the median full-time Australian salary of $76,900, which comprises both skilled and unskilled workers.

Joanna Howe, Senior Lecturer in Law at University of Adelaide, explains that this absurdly low TSMIT has created a low-skilled migrant underclass and has helped crush Australian wage growth:

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 [temporary skilled shortage] visa to be used in lower-paid jobs…

TSMIT is intended to act as a proxy for the skill level of a particular occupation… TSMIT’s protective ability is only as strong as the level at which it is set…

But since 1 July 2013, TSMIT has been frozen at a level of A$53 900… 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.

Obviously, lowering the TSMIT further, as suggested by Abul Rizvi, would de-skill Australia’s visa system even further, undercutting Australian workers and lowering wage growth.

Instead of further debasing Australia’s skilled migration program, the wage floor for all skilled migrants (both permanent and temporary) should be raised significantly to at least full-time average earnings (and preferably much higher).

Raising the ‘skilled’ migrant wage floor would ensure that the program is used sparingly by employers on only highly skilled migrants, not as a general labour market tool for undercutting local workers and eliminating the need for training.

It would also overcome the ridiculous situation that exists currently whereby the median income of ‘skilled’ migrants is less than the population median, despite the population median being weighed down by unskilled workers.

For somebody credited with “reshaping of Australia’s intake to focus on skilled migration”, it is curious that Abul Rizvi is now advocating low-paid and low-skilled migration into Australia’s regions.

Unconventional Economist
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Comments

    • proofreadersMEMBER

      We need more Uber and Uber Eats drivers to service the next batch of crush-loading vibrants about to arrive on Straya’s shores – rinse and repeat.

    • that’s a fair question but not so unusual
      how about these:
      why do we let students work while they are studying? aren’t they here to study?
      why do we let their spouses/de facto’s work?

      • The reason to let them work is the same reason our own students work – because most aren’t wealthy enough not to work while studying.

        As for spouses, I’d question whether they students should have a spouse visa allowance at all.

        It all depends on what you think a foreign student system should be – an export or a cultural exchange programme.

        • so why would these students who are not so wealthy choose to study at expensive universities in an expensive country?

          • In an ideal world, it’s because they’re very clever, genius even and we have the ability to either foster their development and build a cultural bridge…. or poach them.

            In our world, the mass of third worlders gutting our universities for PR… well the universities still need to pay their VC’s their bonuses.

          • so why would these students who are not so wealthy choose to study at expensive universities in an expensive country?

            Saving up enough to be able to move and support yourself with work is a very different kind of “wealthy” to saving up enough to be able to move and fully support yourself for several years.

            Plenty of backpackers, Au Pairs, etc, come to Australia from Europe, the US, etc, with no intention of settling permanently. The same is true of many who want to study here. Of the foreign students I knew from Uni 20-odd years ago, all of them returned home after their semester/year/graduation.

      • Most International students aren’t wealthy enough to not work while studying. Years ago International students weren’t allowed to work but changing the Visa rules allowed a lot more international students in.

        Personally I’m fine with allowing international students to work while studying but the government should have left numbers capped at a % of total student intake. That way we wouldn’t have a flood of international students being used as cheap labour and it would encourage universities to have an academically competitive admissions process for international students. Instead we opened the floodgates and keep dumbing down pass marks in the interest of $$$$$$$$$

        • I went back to uni as a mature age student in a city 3,000km away from where my parents lived. This was in 2004.

          As a citizen, I had no restrictions on hours, but i limited it to 16-20 as a sensible tradeoff for study time.

          it paid rent, food, cheap cash wine and a $7 movie ticket once a week. I really didn’t have much left.

          20 hours for genuine students (and a sensible number) doesn’t break the bank, if this was being adhered to, it wouldn’t be a problem.

    • Well, the education offered here is patently not good enough on its own to induce people to come so some sweeteners have to be introduced, like working while studying and if that’s not sweet enough, a path to residency and lots of taxpayer funded goodies. Getting the picture now?

      • That’s spot on Dominic. I was being rhetorical.
        It’s corrupt, if they get employment in their field of study (till recent changes, it was any kind of work) they get points towards a permanent residency application.
        Traitor Abdul claiming that the $53,900 wage floor for regional skilled migrants is too high, is a red herring, because overseas students should never even been allowed to work here at all.
        The work rights attached to overseas students visas during study and post study must be removed, as it used to be.
        This will cause the overseas student racket to drop significantly and only genuine students will come here, it will begin to restore some probity to the education sector … also and most importantly, this will greatly reduce the net immigration numbers.

        @smithy – “… because most aren’t wealthy enough not to work while studying”
        It is a legal requirement that overseas students have sufficient funds to pay for their living expenses while in Australia, BEFORE a study visa is granted . So no need to work here, if they run out of money or are lying they should be sent home.

  1. come on people, it’s skilled visa floor and you want it to be higher than a minimum wage which is almost $40k
    if business owners wanted to pay someone minimum wage we wouldn’t be importing workers

    • His argument is that employers in the regions can’t afford those wages so workers will inevitably be exploited – so why not just lower the wage floor to the level at which they would have been exploited thus meaning that it won’t strictly be ‘exploitation’ anymore 😉

      • ^^^

        It’s a bit like when Sydney trains loosened the criteria for trains being late. All of a sudden, less late trains! How good is Australia!

      • If we removed all the laws regarding exploitation then there would be no more exploitation. Simples.

        • Next on his list is eliminating laws against non-consensual sex. It’s not illegal if there’s no law against it. I’m sure that is going to fly really well…

        • Congratulations. You have mastered a key aspect of libertarian thinking.

          Strangely they seem disinclined to extend this logic to other laws. Like, say, fraud or assault.

      • Jumping jack flash

        Yes, enough beating around the bush, just pay them zero and you’ll never need to worry about exploitation ever again!

  2. If Abul writes it, then Kristina recites it. That’s today’s ALP, “Standing up for Middle and Working Australia”. After they’ve finished “Standing up for the Sub Continent”.

  3. PalimpsestMEMBER

    It’s a dilemma. None of us can find enough skilled workers that will take our jobs at $53k a year. We have tons of vacancies for degree qualified people at that level. Nobody understands how hard it is to find a cyber security expert for under 60k a year. Accountants – well, sure, we can recruit them, but then they want a raise once their English improves. There’s just no alternative to lowering the cut-off.

    • Arthur Schopenhauer

      I had a senior manager at a large Australian company complain that a Math/Computer Science PhD from an excellent STEM Uni with core expertise in the hottest AI tech cost $150k.

      Bargain I thought. The candidate could start at $250k in Silicon Valley. The manager then told me he could get 10 outsourced ‘coders’ for that. 😱😨

      I guess ‘skilled’ means cutting & pasting Stackoverflow answers.

  4. The base case should be zero immigration.

    Only when Australians can’t be found to do the job can employers bring labour in.

    • That’s where it’s particularly devious. According to the logic, if you advertise a job in regional Australia paying $54k it’ll be filled immediately by a local. If they don’t want a local taking the job they need to advertise it at a much lower price and then if there are surprisingly no takers can you import the kind of person you actually want. Only problem is that pesky minimum.

  5. Stewie GriffinMEMBER

    From Zero Hedge today, in honor of Thanksgiving week, the nation’s progressives have begun to give thanks that they have so much to be angry and offended about this year:

    “Thank you, unspecified deity who may or may not exist, for giving us so much stuff to be outraged about,” said Staci Walder, 42, of Portland, as she prepared her vegan, kale-wrapped turkey.

    “I’m truly humbled that you’ve blessed me with the Trump presidency, the patriarchy, the laws of economics, and biological facts to rage against.”

    “Every year, it’s important to pause and recognize how much we have to be angry about.”

    “A lot of people struggle with gratitude, but I’m deeply thankful that the universe has given us a veritable cornucopia of things to be mad about,” agreed Mary Wallace, 27, of New York.

    “I know that I come from a place of privilege, and when I think about those poor people who have absolutely nothing to be mad about, I utter a prayer of thanks to goddess.”

    Many progressives partake in an annual tradition of writing down all the things they’re thankful to be mad about:

    * White people
    * Pronouns
    * Personal responsibility
    * Satire that does not affirm their viewpoint
    * Billionaires
    * Old tweets
    * 32-ounce sodas
    * Plastic straws
    * People who hold a steady job
    * Appropriating other cultures
    * Excluding other cultures
    * Bush
    * Obama
    * Trump
    * Babies
    * Kanye West
    * America

    “If we’d all just remember to count our outrages, we’d have a much worse attitude all the time,” Wallace said as she looked over her own list of offensive things that dare to exist.

    “We should live our lives as though it’s Outrage Thanksgiving every day.”

    Amen

  6. Jumping jack flash

    “Surely we aren’t bringing in hordes of ‘skilled’ migrants so they can work part-time? Moreover, these are supposed to be ‘skilled’ workers, so shouldn’t they be paid significantly higher wages than the average, which includes unskilled workers?”

    Shhhhhh!! You’ll expose the true purpose of these workers which is to enable employers to reduce fixed costs as much as possible, pocket them as their own wages and then use that increase in wages (combined with looser lending standards and lower interest rates) to increase their debt pile attached to inherently nonproductive things.

    If you combine that with underpayment then imagine the possibilities! Debt will shoot up and the economy will be saved!

    The debt must increase and never stop otherwise the interest – which never really can be zero for those who actually own and are responsible for the debt – will suck the economy inside out.

  7. But as a business owner how can I undercut local wages ?

    Why would I even wish to hire a local university graduate when I can hire a skilled migrant with sometimes decades of experience for less?

    (From the viewpoint of a hypothetical business owner)

    Seems like Abul is firmly in the pocket of business lobbyists….

    • What many business owners fail to realize is that often it is more effective to hire and train a graduate than to retrain the vibrant with supposedly a decade of experience. Unfortunately most will have already repopulated entire sections with cheap, highly-skilled vibrants but scratch their heads at declined quality and increasing staffing numbers and costs.

  8. My local suburban fish and chip shop (Greek owned) now a sponsored Indian worker helping out the owner.
    The owner just serves and takes the money, the Indian worker cooks and does general duties like the cleaning.
    We may get to a point like in some parts of Asia like Indonesia, where even people we define as ‘poor’ employ maids themselves!

  9. Abul Ravzi…former Deputy Secretary of the Dept of Immigration…..what a surprise that he would advocate for a policy that would benefit people from his part of the world, this is the future Australia looks forward to, vibrants being hired and promoted in the Public Service to meet diversity quotas, we are screwed.