Crikey’s Bernard Keane is one of the few members of the Left to acknowledge that the flood of temporary migrants into Australia has undercut workers and contributed to weak wage growth:
Restrictions on immigration are, in the view of neoliberals, particularly damaging. Everyone suffers: the poor individual from a developing country prevented from moving to a wealthier country to make more money, and the economy of the wealthier country that misses out on the additional economic growth from migration. And business suffers, because migrants expand the pool of labour, add whatever skills they bring to the market and put downward pressure on wages…
And if they don’t speak the local language, or don’t understand how local institutions work, they’re more easily exploited, putting yet further downward pressure on wages. Australia’s wage theft epidemic is particularly severe on temporary foreign workers and foreign students, who are exploited by at least a quarter of employers, and often far more, in industries like hospitality and horticulture…
Too right. However, the issue of wage suppression is not limited to temporary migrants, but the permanent migrant intake as well.
As shown clearly by the Department of Home Affairs’ latest continuous survey of migrants, permanent migrants were paid well below average in 2017. They also experienced far higher levels of unemployment:
Even if we focus on so-called ‘skilled’ migrants only, we see that they are paid well below the population average, which is dragged down by unskilled workers:
This is bonafide proof that Australia’s permanent migration program is also undercutting local workers and undercutting workers.
The solutions to this problem are simple and were outlined in detail last week.
First, all skilled migration should be employer-sponsored, and the pay floor should be set at least at the 75th percentile of earnings (currently $85,852):
This reform would ensure that the skilled migration program (both temporary and permanent) is used sparingly by businesses to employ only highly skilled and high paid migrants, not as a general tool to undercut local workers and eliminate the need for training.
Second, the federal government should lift English-language and financial requirements for international students, alongside limiting work opportunities.
Raising entry standards would ensure a smaller number of high quality international students, while also ensuring they are financially independent and not reliant on work for income.
These simple reforms would dramatically improve the quality of migrants, reduce competition in the labour market, and moderate overall numbers.
With Australians facing mass unemployment, and skills shortages virtually non existent across the economy, there is zero rationale for maintaining such strong migration flows.
