Scotty from Marketing rebrands wage theft

Because rebranding is what he does best, at Domain:

It would have been unthinkable even a few years ago that a Coalition government would talk about naming and shaming underpaying employers or introducing laws that make wage theft a crime.

But it is a reflection of how brazen and widespread worker underpayment has become at high-end restaurants, on farms, in the franchise sector and at some of Australia’s largest companies.

It is worth noting that Attorney-General Christian Porter’s intervention in this issue is only a discussion paper at this point. The Morrison government will now come under pressure from its natural allies in the business sector to not go too far.

But that does not mean these “reform options” are insignificant. They include disqualifying directors where significant underpayments occur, forcing employers to display notices admitting they had underpaid workers, banning companies that underpay workers from using some forms of temporary migrant labour, and a small claims tribunal for underpayments.

Some of the reform options are almost identical to policy positions of the union movement and ALP. It confirms the shift in the politics around issues to do with wages, the power of big business and of fairness at work.

This will do next-to-nothing to prevent wage theft. Wage theft is not some quirk in the mass immigration economic model. It is the mass immigration economic model.

The systemic wage theft from ballooning numbers of temporary migrants is entrenched across the entire Australian economy:

Entire industries have become heavily reliant on migrant workers to perform low-skilled work in the labour market for below award rates, which is unambiguously undercutting local workers and lowering overall wage growth.

Indeed, last year’s Migrant Workers Taskforce’s 141-page report found that “wage underpayment is widespread and has become more entrenched over time”, with as many as half of all migrant workers exploited.

The impact is most pernicious on younger Australians, as explained 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. 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 economics is simple: continually increasing labour supply via immigration necessarily reduces workers’ bargaining power and ergo wages growth. It disguishes the deleterious impacts upon demand by backfilling falling wages with more warm bodies.

Thus you end up with a permanent output gap that steals wages for profits from everybody:

The few elements of the unions pushback that Scotty from Marketing has cherry-picked for his wage theft rebranding campaign are wiped out entirely by his boosting of the underlying trade in cheap foreign labour. In recent times we have seen:

  • ballooning bridging visas;
  • new slave labour regional visas;
  • relaxation of skilled occupation lists for migrants;
  • adding more oversupplied sectors to shortage lists;
  • relaxed backpacker rules for bushfire reconstruction.

And on it goes.

The truth is, the perment migrant intake is also part of the scam. The number has fallen slightly, more than offset by and an explosion of temporaries, and the wage threshold is $53,900, an absurd figure for supposedly “skilled” migrants. It has been adjusted for inflation since 2012.

Domain loves wage theft, of course, becasue it drives down inflation and drives up asset prices, pushing its last frontier of profitability: real estate listings. So we get the kind of trash reporting above from many of its sources.

Wake me up when the major parties cut immigration across the board. Then and only then is wage theft in trouble.

David Llewellyn-Smith
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    • Self regulated naming and shaming could be modelled on the Catholic Churches’ confessional and response to paedophile priests – keep it quiet and avoid throwing on the the brotherhood in the clink.

  1. An incensed Attorney-General Christian Porter threatened to introduce new industrial relations reforms to name and shame those guilty of wage theft, which he described as an “endemic problem” in Australia.

    “Get your house in order,” he told reporters this afternoon.

    “We’ve had large organisations that involve themselves in any number of social issues that spend an enormous amount of time, money and effort self-promoting with PR campaigns and national advertising telling us how good they are.

    “Pay your people properly.”

    Porter is continuing to lay the groundwork for his tilt at the top job. I can’t tell if he is all talk but maybe if he lands the
    top gig we might have some one with some spine.

  2. our government is treating wage theft as some kind of IT issue not as theft what it actually is – not different than stealing from someones CC or bank account. we don’t need special laws for this, this is well covered by our criminal law.

    on the other side illegal downloads are treated by our government as theft although they are legally (or practically) not

    and majority of general public is quite fine with this …

    we live in Huxley’s worst nightmare

  3. Some of you guys should hop on the fair work site and try and work out which award to use – it’s impossible – I have a mate who rang fair work for assistance in picking the right award and they would not give any advice – Maurice Blackburn has even been caught underpaying and they are IR specialists. while big firms can afford IR advice small business can’t. Don’t winge about the car industry shutting down when you got 122 awards with over 50 pay points – it’s time the IR system was simplified or more employers will keep going offshore.

    • Nnnnnnope

      You can’t tell coles etc can’t work out which award to
      Use? And Georgie Porgie used the wrong award? Balderdash. He thinks hospitality is all overpaid – remember his abolish penalty rates schtick?

    • Agreed.

      I’ve mainly worked in finance but have had HR/IR responsibilities from time to time which has necessitated meetings with the IR legal firms for advice / strategy. It is just plain nuts how complicated it is. Should we terminate the EBA? Can we? Should we just default to the award – what is in the award? What about folks on contracts etc.

      This is one of the primary reason labor hire companies exist. Actually hiring full time staff is a fxxken hassle. By using labour hire you outsource the compliance headache. No longer your problem. The labour hire company takes their cut and jobs become more casualised.

      • Jumping jack flash

        My wife mainly does contract work. She subcontracts occasionally when it gets busy. I urge her to hire some Indians or Sudanese at $15/hr and still charge $40..

        She hasn’t completely accepted the concepts of the New Economy just yet..

        Like the pull of a black hole, the necessity for our own enormous debt pile will eventually become too great, I’m sure.

    • 1000
      It is 100% the 120 awards that are out there and the complexity of then. I have assisted a retailer to calculate then as a consultant and I do complex financial modelling for a living and it’s a clusterf*#k. You may may up to 6 rates that may apply to any given hour based on the day, time, hours worked in that shift, hours since your last shift finished, whether you had a sandwich for lunch (sarc)….it’s a disgrace and the saps at Fair Work can’t even calculate it (even though they produced them) themselves so they rely on the company to calculate it which costs them a fortune. All this will do will force them to cut staff

  4. On the upside, nice little earner for the Government via additional income tax revenue. That’ll fund plenty of new rorts.

  5. Jumping jack flash

    “Wage theft is not some quirk in the mass immigration economic model. It is the mass immigration economic model.”


    Mass immigration is an important cog in the New Economy.

    In the New Economy, access to crippling amounts of debt is as essential as access to clean water. Curiously, the truly enormous debt we all have and need hasn’t made its way into wage inflation, but access to debt is still dependent on wages.

    Another annoying problem is that because wages aren’t inflating due to that truly gargantuan debt pile, prices of non-essential goods and services are stuck and cannot rise which would ordinarily allow higher wages to be paid to the providers of these.

    So the obvious way out of that conundrum is to steal someone else’s wages to gain access to essential debt. And none is easier to steal wages from than some 3rd world immigrants who are just happy to be here.

    This is why wage theft is predominantly discovered in the non-essential goods and services providers, although it is becoming increasingly obvious that *everyone* had some wage theft going on, and seriously, why wouldn’t they?

    • Exactly – why employ someone with a dubious visa situation and likely poor english skills and then pay them a legal wage?? You’d hire a local. The point of a visa worker is to be exploited, otherwise why bother.

    • Jumping jack flash

      It’d be easier to simply legalise wage theft by lowering minimum wage to $5/hr and introducing a tipping system.