Migrant wage theft runs rampant from farms to restaurants

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As we know, the hospitality and horticultural industries are currently lobbying the government hard to allow easier access to migrant workers.

We are told that these industries are experiencing chronic labour shortages and that without access to migrant workers, restaurants and cafes will be forced to close and farms will lose valuable crops.

One interesting aspect of these claims is that the simplest solution to so-called ‘labour shortages’ – offering better pay and conditions to attract local workers – is never considered.

Another is that the calls for migrant workers is coming on the back of ongoing exploitation and wage theft by these very same industries.

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Consider the hospitality industry first, which has been one of the main epicentres of migrant wage theft over the past decade. By no coincidence, it also pays the lowest wages in the nation and has experienced by far the lowest wage growth (see here).

Amid all the howls of shortage, another investigation by the Fair Work Commission (FWC) has found further systemic wage theft by the hospitality industry across Adelaide’s Chinatown precinct:

“Unfortunately, we’re finding really high levels of non-compliance, we’re finding flat rates of pay not being paid, failure to provide awards provisions, weekend penalty rates not being paid”, [Fair Work Ombudsman Sandra Parker said]…

The audits are part of a national program that has previously targeted cheap eateries in Melbourne, Sydney, Brisbane Adelaide and Perth…

“What we often find in these cheap eat places is that it’s vulnerable workers who are often getting ripped off,” Ms Parker said.

“They’re often visa holders, and we focus on those, and young people. They don’t know their rights, they don’t know where to get help and they’re nervous about their visa status, they often get threatened with that.”

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It’s the same story across the horticultural industry, which is another epicentre of exploitation and wage theft. According to a report in the New Daily, the FWC has received 349 requests for assistance over poor pay and working conditions, but it is under-resourced and has only fined 15 farms:

Unions NSW secretary Mark Morey said… “some pickers are getting paid $100 a week and then paying $160 for board and food. It’s criminal”…

Mr Morey said many backpackers and other migrant workers don’t even attempt to contact the FWO about their exploitation because there is no firewall between it and the Department of Home Affairs, which has the power to deport them…

Migrant Workers Centre director Matt Kunkel said there was no disincentive for employers to not pay people properly…

The whole sector relied on “poverty wages”, and the task of dealing with the exploitation was too large for the FWO.

The sad reality is that both industries operate on a model of slave wages and exploitation of migrant workers.

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Therefore, if the Morrison Government follows through with its treasonous plans to give businesses easier access to foreign workers, it will only amplify the exploitation, push wages even lower, and deny local workers employment opportunities and a living wage.

About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.