Morrison to announce wage-crushing immigration reboot

According to The AFR, Prime Minister Scott Morrison will use today’s AFR Business Summit to announce a reboot of Australia’s immigration program that will use temporary visas to fill roles in lower paid professions like nursing and aged care:

[Morrison] suggests that once migration resumes, it will be adjusted to meet the needs in areas of burgeoning demand such as nursing and aged care, where not enough local workers can be found.

“We must re-look at the role that temporary visa holders play in meeting our economy’s workforce requirements, where Australians do not fill these jobs”.

Interestingly, the most recent skills shortage report from the federal government showed there was no shortage of nurses prior to the COVID-19 pandemic:

While there were differences by specialisation, in 2017-18, employers generally filled their nurse vacancies with relative ease. In 2017-18, 72% of nurse vacancies were filled and there was an average of 7.2 applicants per vacancy. These results are fairly consistent with those experienced over the previous three years (see Figure 1)…

The supply of nurses has increased in recent years, with nursing graduate numbers and nurse registrations at historically high levels.

Therefore, why is Scott Morrison claiming that there is a shortage of nurses requiring an influx of temporary migrants?

Moreover, what about the immorality of stripping developing nations of their medical personnel?

Allowing an influx of temporary skilled workers post-COVID will have the effect of holding down wages – as it did over the past decade – by swelling labour supply and eroding workers’ bargaining power.

One only needs to look at the appallingly low Temporary Skilled Migration Income Threshold (TSMIT) for so-called Temporary Skills Shortage (TSS) visas. This TSMIT has been frozen at the ridiculously low level of $53,900 since 2013-14. This was $3,300 (6%) below the median income of all Australians ($57,200) in 2019, which included unskilled workers, according to the Australian Bureau of Statistics (ABS):

Median Australian weekly earnings were 57,200 in 2019, according to the ABS.

Therefore, the low TSMIT explicitly incentivise employers to hire cheap migrant workers over locals, as well as abrogates their need to provide training.

The solution to so-called labour shortages is actually pretty simple: allow wages to rise. This will have two broad impacts. First, it will encourage workers into that profession, thus eliminating the shortage. Second, it will encourage employers to stream-line their operations or adopt automation to save on labour costs (boosting productivity in the process).

If Scott Morrison had any integrity, he would require all skilled migrants (temporary and permanent) to be paid at least at the 75th percentile of earnings (see above table).

Setting a higher salary threshold for migrant workers would ensure that the skilled visa system is used sparingly by businesses to employ only highly skilled migrants with specialised skills. And it would stop businesses from abusing the visa system to undercut local workers and eliminate the need for providing training.

Of course, we all know that visa integrity is not the purpose here. Scott Morrison wants another influx of “cheap” labour to lower costs and boost profits for his business-owning mates.

Unconventional Economist

Comments

  1. Albo can win the next election today if he announced that the ALP will not back this.

    • I can’t see Albo winning anything. A couple observations:
      1) Many working class voters don’t even know who Albo is
      2) The oldies think it was Scomo who protected them during covid. They have no idea Scomo initially wanted to keep everything open, and that it was the states that locked down.

    • ICAC
      Culture fix – MOPS rework, protections for staff in line with best practice HR and governance
      Kill off this ludicrous TV boondoggle/immigration
      Climate

      And that’s just entree

    • Jason, you know that’s impossible. Whatever immigration deluge Morrison announces, Labor would only overbid them, just as they did at the 2019 election. For Labor, infinite global social justice trumps local workers and wages any day.

      • No votes in it for LaborMEMBER

        The inner city Labour voters consist mainly of govt employees, govt health workers, public servants and non-profits – social justice is big, but wages are not
        affected by the underpaid workers.
        . The suburban aspirationals and tradies aren’t Labour any more, and anyway are booming as they build away for the housing boom.
        So where is Labor going to get some voters from. ?

  2. Most likely in response to the RC on Aged Care ?.

    Cheaper skilled labour will fix teh thing ?.

    • Charles MartinMEMBER

      Aged Care RC Recommendation 149: Hire more unskilled labour from the third world and conduct in wage theft to boost profits for aged care providors.
      I didn’t see this one mentioned at all. Must have been in the draft version before the final release.

    • Freshly imported and exploited low wage aged care workers wont be too worried when COVID rips again. No social compact between them and our entitled aging boomers.

    • SnappedUpSavvyMEMBER

      boggles the mind that deliveroo, a slave wage company, can be valued at 7 billion. modern day slavery pays big

      • That’d be Deliveroo that has never made a profit and is staring down the barrel of existential risk?

    • Going to be a lot more soon, was talking to a girl who has just started nursing at uni, she said this year it was much harder to get into as so many people have applied to do it due to covid.

    • Ronin8317MEMBER

      The age care sector are not hiring enough nurses, so they claim there is a ‘shortage’, and the government believes them.

    • Low wages makes big business richMEMBER

      Like all these “shortages” the correct sentence is
      “There is a shortage of workers at the unlivabley low pay rates, unless we bring them in as “students”,
      Let alone gig economy workers really getting half the minimum wage.
      Still it comes with a great perk, of no value to local residents. –
      permanent residency for the whole family paid by the govrernment. .

  3. Exactly! If only a journo would call the LNP & Labor out over this, constantly. Lowering wages, especially like this, is bad economic policy, it allows Australia to appear OK in the short term but the reduced income means less spending in the economy which ultimately means lower growth & profits, hhus lower standards of living. Productivity needs to be lifted by improved efficiencies not by crushing wages. You’d think the “best economic managers” would understand this.

  4. This is all about optics, if we import nurses then the BB’s will be looked after when the aforementioned nurses bring the the latest strain of covid, also looks after his voting set who are very close to needing nurses.

  5. Sounds a bit premature, even for a multi-unit development marketeer. Maybe wait and see what the unemployment rate is once jobkeeper stops. Also wait and see how protective Covid-19 vaccines are against repeat infection. Perhaps the temporary resident plan will need to be adjusted.

    • Scummo is speaking at the ‘AFR business summit’. There is an element of telling the audience (aka his owners and masters) what they want to hear. Scummo won’t open the borders until after the next election, he knows the politics are too toxic.

      • Jumping jack flash

        We can hope.
        At least he should wait until the US stimulus starts getting paid out, and leveraged into a global-economy-buoying torrent of debt.

      • Wish he would. Fresh imported COVID on some students or new 3rd world aged care workers might wipe out several thousand leaners, I mean boomers, and solve the aged care worker shortage issue.

  6. IMO the best way to boost wages AND lower unemployment is to do two things are once. Important – do not only do A)

    A) Remove minimum wage rules
    B) Increase support via higher dole payment, or better still UBI funded by land tax.

    This way employers will be forced to pay-up to encourage people to work for them. Govt should monitor the situation to ensure that wages offered are indeed above the old minimum wage. If not, then the UBI/dole is increased until that happens.

    A further benefit is we could remove all the stupid rules about applying for so many jobs per month, and could get rid of those parasitic job-finding agencies.

    • Jumping jack flash

      The way they’re headed – back into the horror of 2019, a UBI will certainly be required soon.

  7. The newly graduated nurses that my daughters know cannot get permanent jobs. How ridiculous is this? Politicians/Promoters are so full of it.

    • Jumping jack flash

      This. I know several new graduate nurses that are working a patchwork of shifts split between all manner of institutions to gather enough hours to earn a decent weekly income.

    • Haywood Jablome

      Yep. Massive competition for a handful of graduate positions. The unbelievable number of nursing graduates joining the ‘market every year. Shortage my @rse.

  8. Ian HarrisMEMBER

    There are so many mixed signals. The RBA wants wages to increase so the economy will grow. The Govt wants a thriving economy and to hit its inflation target. But bringing in cheaper labor will keep wages growth down. And also if you are a skilled migrant to this country you wont be entitled to a wage subsidy. Could the Government at least be consistent? Although given the Christian Porter episode consistency is not something we could expect .

    • Theres no mixed signals. The only kind of bad inflation is wages inflation. All other kinds of inflation are either good or dont matter.
      That’s how we make the debt slaves.

  9. Jumping jack flash

    “Interestingly, the most recent skills shortage report from the federal government showed there was no shortage of nurses prior to the COVID-19 pandemic”

    I know for a fact that new graduate nurses struggle to find positions and often need to work shifts at a number of places just to make up a decent number of hours. How our leaders can think there is a shortage is astounding.

    We all know the reason, the wage theft. Many new graduate nurses aspire to take on their own gigantic wad of debt, and for the most part when they’re working for the remaining part of the wage packet after half of it has been stolen, it’s simply not enough to obtain the necessary amount of debt. 3rd world slaves don’t aspire for debt (not initially, they’re just happy to be here in luxurious Australia, earning valuable AUD), so they’re more likely to work without complaining about the pay and conditions.

    The government is mad. They have no mind of their own, nor any sense of the purpose of the New Economy. Their actions will doom the economy to the same fate as at the end of 2019! And they had such an opportunity to revitalise the debt economy on the back of COVID stimulus, but no. Blind and mad.

    Maybe the RBA should step up and gently tap them on the shoulder and say “No, that’s enough, Scott”.

  10. Ailart SuaMEMBER

    Simply subsidise slave-labour wages with printed money to a level that attracts locals. And change immigration policy back to bringing in permanent, skilled migrants – but in far fewer numbers.