Former Labor MP: Temporary visa flood is smashing wages

Former federal Labor MP, Craig Emerson, has penned an article in The AFR warning that the relentless rise of migrants workers on temporary visas is crushing Australian wage growth, alongside the expansion of low productivity personal services industries, like food delivery.

According to Emerson, there is minimal sophisticated capital equipment used in these services sectors, thus labour productivity is low. As a result, workers in these sectors will not get paid very much. By contrast, high productivity sectors like manufacturing and mining are shrinking in relative terms:

Employers are not giving their workers wage rises because they don’t need to; with a combined unemployment and underemployment rate exceeding 13 per cent, there’s plenty of surplus labour in Australia and also in the increasingly globalised labour market.

Strong growth in temporary work visas over the last few years is adding to the surplus supply, with the federal government’s own migrant workers taskforce estimating that temporary migrant workers, excluding New Zealanders, now constitute about 6 per cent of the workforce “and are having a significant effect on the operation of the labour market”…

Even more fundamentally, in the digital age and the emerging era of artificial intelligence, job opportunities will increasingly shift to personal services such as aged care, childcare and food delivery.

Compared with the few workers who will supervise and operate the machines embodying artificial intelligence, the many workers in personal services will not be working with a lot of sophisticated capital equipment.

That is, their GDP per hour worked – their labour productivity – will be low. This doesn’t mean they won’t be working hard; they just won’t be paid very well.

Coincidently, a group of academics recently warned that Australia’s gig economy, which includes the food delivery industry, is dominated by migrants and is pushing down wages:

Wages and working conditions could take a hit if ‘gig economy’ jobs such as takeaway delivery continue to expand, researchers of a new study have warned.

In 2017 the researchers spoke to 58 Uber Eats and Deliveroo workers in Melbourne and Perth… 47 of the 58 riders interviewed said they were in Australia on student or working visas…

Study co-author Tom Barratt from Perth’s Edith Cowan University said the major issue was workers were engaged as independent contractors and could be paid less than minimum wage without breaking employment laws… “if more and more jobs enter the gigosphere, this can put downward pressure on the wages and conditions of workers in non-gig jobs,” he said…

The latest temporary visa statistics from the Department of Home Affairs shows there were more than 2.3 million temporary visas on issue in Australia as at September 2019, up 640,000 since September 2012:

Moreover, this increase has been driven by the boom in international students, whose numbers have ballooned by nearly 300,000 since 2012:

Clearly, the boom in international students and the gig economy goes hand in hand, as does systemic exploitation and erosion of Australian wages.

Leith van Onselen

Comments

  1. Anecdote:
    Was in a Victorian coastal town over the holidays (one of the most popular) – not Torquay or Anglesea – and spoke tot he shop keepers who were in total dismay.

    Their story was that almost every single day, 4+ times a week, illegals were coming in and asking for work – the going rate was $12 an hour. When they were asked for their VISA they said they had none. Most were from Argentina apparently.

    The shop keepers would later see these people working in other establishments or services. AirBnB which accounts for most sub-lets in these towns now days with cleaning and turnover staff totally occupied by illegal workers.

    Its not just the farms and fruit pickers – its everywhere. Walking around and eating out its probably one in four to my guess.

    Now that the fires have gone through many towns the financial incentive for cheap labor will be much higher.

    Well done Australia !

  2. reusachtigeMEMBER

    I think most business owners would agree that wages are too high in this country and securing a cheaper source of labour is a great thing!

  3. Thanks Craig. Blow the whistle when you don’t matter any more. I’m fed up with people finding religion once they’ve left their careers.

    People with real balls speak up while they’re still relevant.

  4. ”58 Uber Eats and Deliveroo workers in Melbourne and Perth… 47 of the 58 riders interviewed said they were in Australia on student or working visas…“

    The other 11 couldn’t speak English.

    • Uber and all the delivery slavers who I doubt pay much tax, use our roads, our hospitals, police our emergency services for free. Uber management employees who actually earn a living wage do not live in Australia and therefore do not pay tax. The Uber drivers are mainly below the tax free threshold being students( illegal labour in my opinion).
      Free, open borders markets are there to make mainly USA corporations rich at the expense of the locals who live and own businesses in the various countries, there’s aldi and few others from other countries. We are suckers to allow it.

  5. SnappedUpSavvyMEMBER

    who are these people constantly paying extra to have food delivered? I don’t see the attraction in having a stranger bring me food in a sweaty backpack, there seems to be so many of these Indians in jeans and thongs and a jumper riding around in 30-40 degree heat with food strapped to their backs, this is a trend I have totally missed and do not understand at all

    • TailorTrashMEMBER

      ….not to mention that a spoonful goes missing from each tray ………wonder if the ATO has this down as a fringe benefit ?

    • “who are these people constantly paying extra to have food delivered?” They are extraordinarily lazy individuals that comprise a large proportion of Australia’s populace. The other thing I don’t understand is who are all the people eating out a few times every week, so much easier and healthier to cook for yourself using quality ingredients. Most of the restaurants at the cheaper end of the market are using poor quality ingredients, which are cooked by staff working for less than half minimum wage who have no concept of hygiene.

      • This on the other hand I kinda get, especially now I have kids.

        People working 60hr weeks or multiple part-time and shift jobs may well either not have the time, or simply be too exhausted, to go shopping and cook.

          • HadronCollisionMEMBER

            Counterpoint
            Cook, clean, prep

            I’m not advocating for it of course

            my lunch each day typically consists of rice, coriander, avo (own tree), tomato, kraut
            or
            salad roll

            same thing every day
            healthy, easy

    • +1

      I don’t get it either. I reckon I can just about count how many times I’ve had food delivered in my life on one hand.

    • You should try it some time — certainly the trip between restaurant and your home lends a certain indefinable quality to the food.

  6. Jumping jack flash

    Excellent!

    Paying your staff less and less for the same work means more money in your own pocket. More money in your own pocket means more debt can be obtained.

    More debt means more success.

    In this environment of extreme debt, and the absolute necessity to obtain as much debt as possible because wages alone are simply not enough any more, wages cannot rise because any spare capacity that would and could have been used to increase wages and create additional fulltime positions in the past is stolen by whoever can grab it first to obtain more debt to reap more success.

    • Why waste your time on “obtaining debt” when you could put your money into the stock market and make at least 20% p/a? In fact, why bother with the staff or the work as well?

  7. The real story here is Labor, the workers party, aren’t saying this all day every day.

    The fact we’re here saying “why didn’t he say that while in Parliament?” shows how we’ve become frogs in heating water, even here at MB.

    The time for anger is here. The time for marching in the streets is here. The time to openly humiliate Labor is here.

    Labor. What an absolute joke. What an absolute neon sign screaming CORRUPTION.

    • The real story is that people somehow still believe there is a “workers” party.
      Next you’ll be telling me the “Greens” are the environmental party.

      The reality is workers conditions were a lot better 50 years ago because they were a lot harder to replace with 3rd world alternatives back then. The political system hasn’t changed in the least, the usefulness of the masses to the elites running the country is what has changed, and the only way to fix that is to remove the elites running the country.

      • Yup. The Labs want the coolies as they think they’ll vote for them, whereas the Libs want them to underpin their Workchoices by stealth policy. Either way the floodgates are open whilst the masses behave like puppy dogs chasing butterflies.

      • The political system absolutely has changed. Labor changed.

        What made it harder to bring vibrant before? Labor.

        Labor are to blame.

        • Actually what made it harder to bring vibrants in before was the education systems in their originating countries. To be useful a reasonable level of education is required. In the last 50 years both india and china have massively transformed their education systems with a deliberate strategy to bring themselves into the 1st world. This has created the masses of people now available for importation into the west as replacement workers, or simply exporting the work directly.

        • There’s always been educated Chinese and Indian.

          There were two things that were stopping it.

          1. LNP hadn’t thought of it, so instead went with Workchoices.

          2. Labor wouldn’t have allowed it.

          This is 100%, entirely Labor’s fault.

  8. Wages are being smashed for several reasons: the flood of overseas labour often paid in cash, the relentless casualisation of what was previously steady full time work and the rise of the gig economy; the utter lack of technological intensity of the Australian economy resulting in large numbers of “crap jobs” – retail, baristas, etc. I see nothing to indicate any change soon. We have become Lee Kuan Yew’s “white trash of Asia” albeit with a little help from our friends.

    • John Howards Bowling Coach

      We need our own Lee Kwan Yew, Singapore (and Malaysia for a time) undertook serious reform and reinvented the nation into what it is now, albeit they are largely blood sucking vampires only driven by money, but at least they own their nation along with a fair chunk of ours. Free Trade Agreements etc are a scam on us and the Libs are their biggest cheer squad. Burn down Canberra