With migrants gone, employers are lifting wages and training

Australia’s chronically low wage growth is now considered by many economists, including RBA governor Phil Lowe, as being one of the key barriers to the Australian economy’s post pandemic recovery.

As such, it is disheartening to read regular stories from the mainstream media lamenting that the loss of temporary migrant workers due to COVID has forced employers to lift wages and provide training to local workers.

The latest example of this twisted reporting comes from The Australian’s Max Maddison who complains that the “mass exodus of 200,000 foreign students, backpackers and skilled visa holders during the COVID lockdown” is driving the hospitality industry to increase pay and conditions to attract staff:

In Sydney’s east, China Diner owner Kingsley Smith said the limited pool of chefs had forced wages up…

The loss of skilled migrant workers during the pandemic meant he had begun taking on school leavers and university students to fill kitchen and bar positions which usually required significant experience…

Lewis Land Group owns four ­hotels across NSW and Queensland, and head of leisure Brad Jenkins said they were facing an unprecedented shortage of staff. While chefs were proving impossible to find, the usual supply of young workers willing to pull beers and serve food had also dried up…

With the hospitality group desperately needing 12 to 15 full-time cooks and chefs for two ­venues two weeks ago, he began offering a $2500 bonus to all new chef recruits who sign up and stay on for three months.

He said the lack of qualified chefs was forcing the industry to offer similar incentives.

Higher pay. Increased access to training. What a wonderful result for an industry grappling with the lowest wage growth on record and an economy suffering from chronically high underemployment.

Hospitality industry wage growth

Wage growth across the Accommodation & Food Services industry has crashed and was the lowest in Australia in 2020.

The Accommodation & Food Services industry has for years paid the lowest wages in Australia at only $650 per week as at August 2020, according to the ABS:

Hospitality industry median earnings

The Accommodation & Food Services industry provides the lowest pay in Australia.

The industry has also been an epicentre of exploitation and wage theft from migrant workers.

Without easy access to cheap, exploitable migrant workers, the hospitality industry is finally being forced to pay a living wage and to provide proper training and job opportunities to local workers.

This positive outcome should be celebrated, not lamented by Australia’s corrupted mainstream media.

Unconventional Economist

Comments

  1. RobotSenseiMEMBER

    It’s funny how there’s only one side of the story worth reporting here. Nothing about what $2500 means to someone whose had their wages and penalties systematically crushed over the years.

  2. Savvy Mum and Dad Investor

    Train some young Aussies to cook up Chinese restaurant fare. How hard to cook up a stir fry it’s not exactly a degustation menu.

    • Ronin8317MEMBER

      Speed and consistency. In this day and age, if a bad online review goes viral, your business is ruined.

    • Largely the menu in any Western oriented Chinese restaurant lacks authentic Chinese fare. Think lemon chicken instead of chicken feet and other offalings.

  3. working class hamMEMBER

    How are the business owners supposed to afford their IP repayments when the filthy Aust workers actually want to get paid?
    Lock us down Scomo, not for me or the old blood sucking Boomers, but for the youth of Aust. Maybe if they actually get half a sniff of what it is like to hold some sort power in wage negotiations, once the gates are opened again, they will fight to keep it.

  4. working class hamMEMBER

    Anecdata
    Blueberry crops rotting in the fields in Coffs Harbour. No backpacker labour, no Aust was willing to work when jobseeker and job keeper were so inflated, no accomodation now for them to stay in, all rental properties have been sold off to city investors who aren’t willing to lease out to 18 immigrant workers.
    The chickens are certainly coming home to roost for some wage slave traders.

    • Undeniable and irrefutable evidence that skill shortage exists in Straya. Open hte gates!!! Now!!!

    • And I’ve absolutely no doubt that if the growers were forced to pay actual market rate for the work needed to pick the berries we would see massive price spikes in the supermarkets and demand for their crop would fall massively, decimating the industry. This is the reality of the society we’ve built for ourselves. It’s based in large parts on exploitable, biddable overseas labour that we all conveniently ignore while we gorge on underpriced fruit. Works fine up to a point. Then suddenly nobody can afford to shelter themselves anymore because wages growth won’t cover growth in housing costs. So up goes debt and the restrictions around prudent lending are canned. And this works for a while too. The question is for how long can the increasingly fragile financial system persist, assuming everything – absolutely everything – will be tried to sustain it, thereby magnifying the disaster when it arrives? We will see a return to foreign exploitable labour because the “mums and dads” want their underpriced fruit (so do I, all things equal). We simply cannot avoid a calamity at this point. We are nowhere near the national conversation that would be needed to avoid it, assuming that’s even possible (which is doubtful).

      • Ronin8317MEMBER

        The lack of accommodation is what is distorting the whole picture. There is no lack of land in the countryside, however you can’t build accommodation on it due to “regulations”.

        • An obstacle that would have been very swiftly addressed if it meant that people couldn’t get their fruit affordably because of it. Instead, we had the other path chosen for us.

          • The people stop long before the desert starts.
            It is all regulations, with the exception of the already built out cities like sydney and melbourne.
            Head west from sydney and the houses stop before you reach the blue mountains, let alone dubbo.

        • working class hamMEMBER

          The wrong people own the land.
          Anecdata
          My uncle is pretty much get rich quick kinda guy, always has been, but has no shame in it and it’s actually kinda refreshing. You will never die wondering what he is up to.
          He had a rather large parcel of land that he wanted to develop, nothing crazy, just enough so he could retire.
          After numerous dealings with the local council throughout his “career”, the councillors were overheard saying that no DA with his name attached would ever be approved, that he should sell up and take what he could get. (a lowball offer had appeared from unknown source days after he filed the DA). This council had already been sacked completely for corruption in the past, with a long history of shady deals before the sacking and even after.

          • That anecdata supports the problem being regulations, and the people that control them using them to benefit themselves and their mates, not the wrong people owning the land.

          • working class hamMEMBER

            Different finger on the same hand. Check out some of the absolute shocking BS going down in Badgery’s Creek. Inside trading at its best, smaller landholders getting squeezed out with unfavourable rezoning, to be gobbled up for cents on the dollar, only to be land banked for a much more favourable rezoning down the track.

      • Frank DrebinMEMBER

        So be it. Would be very happy for migrant workers to be given complete freedom to work in the Ag industry so they contribute to lower the cost of Aussie fruit and veg. If the supermarket duopoly can’t source it locally then they will expand imports from all other shady sources ala Hep A blueberries from China via NZ.

        Time to excise the Ag sector and treat it like a Foreign Aid play for Pacific workers. As long as they are treated fairly and paid a decent wage then it’s a also a good outcome for them and their families.

        For all the bleating about wages and conditions it’s pretty clear that Aussies by and large don’t want to do the jobs.

  5. Stage 3 tax cuts to be brought forward on the basis the increased hip pocket $ will go into the economy – that’ll be an announcement for the budget

    • working class hamMEMBER

      Bring it on Swampy. Tax cuts on all physical labour. When 90% of sole traders are incorporated and are enjoying the abundance of corporate welfare hand outs, whilst still having a tax rate sub 27%, who can really deny a sub 200k PAYG at least a few k back? Not a handout, just a few k, that the Feds don’t take.

  6. Schnitzelburger

    My wife works as a waiter, and has managed a 10% above award payrise this year. She started initially on some dodgy labour hire agreement without weekend penalties, but basically told them she wasn’t working weekends without penalties. They were desperate for people to work, telling everyone they had to be available all weekend and staff weren’t having a bar of it. In the end they had to offer her 10% above award as she was ready to walk.

    • working class hamMEMBER

      Nice. Takes a lot of backbone to stand up for your rights, when financial hardship could be the outcome if you don’t succeed.

    • “Be the change you want to see in the world”- Good on your wife. Too many people just take this rubbish- that’s how standards slip and new norms are established. (Yeah, don’t even get me started on people meekly opening their bags to show receipts for goods they’ve just purchased when they leave stores like K-Mart).

      And your wife should be making more than bloody 10% extra. She should be getting time and a half on Saturdays and double time on Sundays.

      • Schnitzelburger

        Yeah she did well, it was a bit stressful, but worth the effort. We’re lucky we have rainy day funds so it wasn’t financially stressful, and she knew she could find something else. But I know for those living pay to pay, and then competing with ‘skilled migrants’ it would be a different story. It helped that she’s very good at her job too. The labour hire company was spinning a whole bunch of HR rubbish to confuse staff as to what they’re entitled too. One benefit of being casual is the ability to withdraw your labour at very short notice, and it worked for her… really rewarding!

        @kolchak, she’s on 10% above award during the week and on weekends proper penalties. Unfortunately time and a half on Saturdays and double time Sundays are a long forgotten relic of the past, it’s a flat 125% now across the hospitality industry for Saturday and Sunday. I think those changes went through a few years ago now.

    • Schnitzelburger

      Yeah she did well, it was a bit stressful, but worth the effort. We’re lucky we have rainy day funds so it wasn’t financially stressful, and she knew she could find something else. But I know for those living pay to pay, and then competing with ‘skilled migrants’ it would be a different story. It helped that she’s very good at her job too. The labour hire company was spinning a whole bunch of HR rubbish to confuse staff as to what they’re entitled too. One benefit of being casual is the ability to withdraw your labour at very short notice, and it worked for her… really rewarding!

      @kolchak, she’s on 10% above award during the week and on weekends proper penalties. Unfortunately time and a half on Saturdays and double time Sundays are a long forgotten relic of the past, it’s a flat 125% now across the hospitality industry for Saturday and Sunday. I think those changes went through a few years ago now.

      • Yeah, that’s my point Schnitz. She SHOULD be on time and a half and double time, still. But people just let their employers push them around. That’s why the LIBS hate unions and boomers have gotta get their cheap lattes, so they enjoyed the penalty rates and then pulled up the ladder after themselves when they retired, by voting in such great leaders as Howard and Abbot and Turnbull and Morrison.

        • Schnitzelburger

          Yep agree with the sentiment there, when the boss said all staff have to be available all weekend, she simply said that’s not true and only makes herself available on Saturdays to have at least some semblance of a weekend. Labour seems to have some pricing power in the hospitality industry based on this article and my anecdote. We’ll see how long it lasts, hopefully over time more workers start standing up for their rights as confidence builds. The industry is clearly bleating loudly that there are skills shortages, when the reality is that if fair wages are paid, it’s not hard to train locals.

  7. Went past the dole office yesterday, there was a line out the door about 10.30 am…..I know there are Covid precautions still but I am wondering if the JobKeeper finish is starting to hit. Of course this won’t show up in ABS figures unless they want it to because of all the ways they have to torture the figures.

    • Yep and in those growing long queues now outside the door of Centrelink (well in Sydney at least) it’s almost all non Australians – PR.
      Chinese
      Indians
      South East Asian
      Middle Eastern
      South American
      African
      Third world unskilled sucking up the Australian welfare.

      • Jumping jack flash

        It wouldn’t be a problem if the dole payment was enough for its recipients to meaningfully participate in the economy.
        Howard even knew this. He was Mr. Pork.

        You’d have thought that Scotty would also realise this. He seems to be stuck in a policy time warp, but sadly not where welfare payments are concerned.

        • Yep not many Australian born in those Centrelink queues in Sydney.

          Much of the influx of people returning to Australia in 2020 esp feb to April 2020 were foreign nationals on a PR who lose their Australian welfare entitlements if out of the country for too long.
          And to also get the doubled welfare payment.

          A foreign national on a PR is not an Australian.
          They are foreign nationals on a PR.

          Once in Australia – these 1.9 million PR have formed a vast unskilled low wages high unemployment underclass. Which says everything about the total failure of our migrant intake controls.

          These PR are then the chain migration anchor to having bring in their aging parents, the useless siblings & cousins, to also get them on Australian welfare.
          And many use that Australian welfare to send back remittances to China or India.

          Whole families in China & India also live off the Australian welfare paid to the foreign national PR.

          The border shutdowns and travel restrictions exposed that tens of thousands of foreign nationals as a PR are collecting Australian welfare but living overseas.

          Here’s your typical example.
          (ABC of course makes them out to be a Sydney fajiltu but they are Chinese foreign nationals on a PR who got the welfare then went back to China).

          Whole Chinese family on Australia welfare.
          Out of the country too long
          Cant even speak English
          No job no skills
          How did these people get a PR in the first place?

          https://www.abc.net.au/news/2020-03-13/centrelink-cuts-payments-to-family-trapped-in-wuhan/12048808

          👉🏾Which raises 2 questions.
          1. Why are we allowing Foreign national PR in ahead of Australia born citizens? They are foreign citizens, not Australian.

          2. Why do foreign national PR get welfare and Medicare anyway? Most other countries don’t grant that until citizenship. Why isn’t that the rule in Australia?

          • working class hamMEMBER

            Can’t provide medical proof the grandmother was even sick? We must be the laughing stock of the world with this stuff.

  8. Jumping jack flash

    Hopefully this isnt just isolated to a few venues.
    Hopefully this means prices will be able to rise due to the workers themselves being able to afford to use the goods and services they provide, not just the few lucky wage theives.
    Hopefully due to rising wages we can get rising debt, at the correct rate, which is the most important thing. Not even joking about that.

    The alternative to rising CPI, wages and debt is certainly the bcnich scenario.