Earlier this month, the Morrison Government flagged that it would reboot Australia’s mass immigration program at the earliest opportunity under the guise of ‘skills shortages’.
This came as business lobbies urged the federal government to lift the permanent migration into post pandemic to help spur the economy’s recovery.
Now Australia’s unions are fighting back, vowing to oppose any attempts by the Morrison Government to make it easier for employers to hire migrant workers:
“Given the unemployment crisis, our priority should be investing in skills for Australians”.
Labor’s immigration spokesperson, Kristina Keneally, also questioned the move:
“This eight-year-old Liberal government allowed temporary migration to soar to historically high levels before the COVID crisis hit”…
“Australia had the second-highest migrant workforce in the OECD, behind the US, and there were also shocking stories of wage theft and exploitation of temporary visa holders.”
Many notable economists, including RBA Governor Phil Lowe, have recently warned that chronic low wage growth is the key threat to Australia’s economic recovery.
Therefore, allowing employers to employ cheap migrant workers en masse will necessarily add to labour supply, increase competition for jobs, erode workers’ bargaining power, and reduce wage growth.
It would also be detrimental to Australia’s long-run productivity since it would discourage businesses from adopting labor-saving technologies (including automation), as well as add to infrastructure bottlenecks across Australia’s cities.
The empirical evidence is standing in plain sight with the prior 15 years of mass immigration paying migrants (even skilled migrants) less than locals, adding to Australia’s chronic output gap (see next chart), and causing chronic traffic congestion and infrastructure bottlenecks across the big cities.
Rebooting immigration at a time of high unemployment would be a retrograde step that must be rejected. Otherwise, productivity and wages will never recover.
