ABC: Low immigration will drive up wages

Former Queensland ALP senator, John Black, gave an insightful interview on ABC Drive, where he explained why the collapse in immigration will lead to higher wage growth for Australian workers – something the Reserve Bank claims is vital to fueling the economic recovery:

Interviewer: “Is it correct that Australia’s economic growth has majorly come from immigration rather than internal productivity improvement”?

John Black: “There’s no doubt that the majority of the growth, which is termed often by economists as ‘lazy growth’, has been from migration. It’s increased the size of the economy, but hasn’t increased the per capita income. So people see the economy getting bigger, but they don’t feel like they are better off”.

Interviewer: “You write that about three quarters of Australia’s lazy economic growth has been boosted by universities. Normally, what would they be doing?”

John Black: “As Peter Costello, the former Liberal Treasurer observed, a very large number of universities across Australia were in effect soft selling visas. They were selling citizenship to Australia in exchange for students coming from overseas and studying at their institutions. And what that meant was that as soon as the borders were closed, many of these students had to leave and many who scheduled to come in couldn’t do so. That was driving a lot of employment in the labour market… At one stage we had up to 700,000 of them in Australia, these international students, in the period leading up to COVID. So, you turn that tap off, it just cut the lion’s share of annual jobs growth out of the labour market”…

“What it means is that instead of being able to rely on a source of relatively cheap labour from international students, the employers that want cheap labour… they all of a sudden have run out. So, that means you have got to rely on people that are nominally retired, or people that are unemployed, or spouses of people that are full-time employees… So, it’s a lot harder to drag those into the labour market because they tend to want inconvenient things, like decent wages.”

“Employers in hospitality and the rural sector have been getting it very easy for a long time”.

Interviewer: “Does this explain why when JobKeeper came to an end, there was no increase in the unemployment rate?…”

John Black: “Well that’s because there is no longer a source of, in many instances, relatively cheaper labour. That’s simply gone”…

Interviewer: “For the last 12 months, many of my listeners… fruit pickers, farm, hospitality companies, restaurants and cafes, have been complaining they can’t get employees”.

John Black: “Well I’ve got a tip for them. As an old union official, offering them more money never hurt. Give me a break. If you’ve had an easy run for a long time [via foreign workers], having to pay what you used to pay before this easy run occurred is going to be inconvenient. It’s going to put the price up”.

“Don’t forget, the best union official we’ve got in Australia now is the Reserve Bank, who have been arguing for higher wage inflation for quite some time…. We are now going to start to see a few of them”.

Interviewer: “This means wages are going to go up over the next 12 months?…”

John Black: “Well mate, if you suck a quarter of a million workers in a year out of the potential labour supply, you are going to see that, yes. You are going to see wages go up”.

Interviewer: “Halleluiah. This is good news for workers, isn’t it?”

John Black: “Well yeah. But not so for your [employer] listeners that you mentioned earlier”…

So here we have another rehash of the arguments that MB has made for nearly a decade: that Australia’s mass immigration program suppressed wages. For years we were ridiculed or ignored by the captured media who presented us as ‘racist’ or ‘hateist’ for daring to question why Australia was running one of the biggest immigration programs in the world to the detriment of workers and living standards.

The truth is now out, with economists and the Reserve Bank now falling over each other admitting that MB was right all along, and that wages will very likely rise on the back of Australia’s closed international border.

Unconventional Economist
Latest posts by Unconventional Economist (see all)

Comments

  1. I don’t think the ABC or Labor want higher wages
    If they did, every time an employer complained about this isssue they’d have the same reaction as this ABC person who will probably be fired today

    • Yep. They want the same quantity of inbound workers, they just want them here permanently.

    • drsmithyMEMBER

      I don’t think the ABC or Labor want higher wages

      Labor only wants it through increased union membership and power.

      • +This. They want to be credited with wage growth because of excellent management vs simple supply demand requirements.

    • Jeepers easy to see when your 6yo has nightmares by the MB timestamp!
      Anyway, again on Kuddles Kelly ZERO mention by Feckless Fran to Treasurer Frydenborg (he has shed some weight, hasn’t he, he’s looking way fitter) about WHY more Australians are in jobs. Errrrr because we aren’t importing loads of wage depressing slaves for 7-11 and hospo.

      Just sent a complaint to RN breakfast, forgive the poor grammar, no time and their submission form character limit.
      ==
      Hi,
      there seems to be a general disinclination (editorial position) for Fran (this pervades Breakfast News on TV too) to mention how the lack of very high immigration right now is leading to more Australians in jobs and wage “pressure”. This morning on Breakfast Fran had an opportunity to highlight this with Frydenberg, with the next natural question, why don’t we revisit immigration and consider lower numbers to help underpin local jobs and wages. But no, asanine discussion leaving this unaddressed. And the use of the word pressure is problematic. the RBA and others are explicitly calling for wage growth to help inflation. We should be welcoming “pressure”.

      On the news last night Jeremy Fernandez let the hotelier vested interest go on and on about the lack of “skilled” (emphasis mine) immigrants for hospitalisty jobs without challenging her contention that she can’t get staff locally.

      The ABC has the appearance of supporting Capital and Employer groups.

      • You know what happens to a working dog if it gets kicked 5 times a day as a reward.

      • Same as old Koshie, 5 minute prime time spruik fest by Luke Mangan about how he cant open restaurants because he has no “skilled” intl staff, how the govt should prioritise their arrival to ‘get Australia going’ Koshie and co just nod along in agreement.

        Even those who understand the questionable economics will never dare mention it, you’d be flying awful close the the black hole of woke and thus 1 tweet with 23 likes could have you issuing a grovelling apology on air (or worse) for your transgressions.

    • ABC and Labor want a multiracial society, they are zealously in pursuit of a ‘brown man’ nation.
      Higher wages for the workers … just lip service.

    • ErmingtonPlumbingMEMBER

      I have many customers, usually boomers, who repeat that scripted line all the time,…”Young Australians just don’t want to do “those” jobs”.
      I always fire back and say thats BS and you only think that because you’ve been listening to to much 2GB.
      Probably not good, me saying this, for generating repeat customers.

      • working class hamMEMBER

        My parents often repeat the same mantra. No one worked as hard, for as long, with such high wages, job security and standard of living as a boomer.

      • Lord DudleyMEMBER

        Ever notice how the top-end of the age-bracket of the “young” people that they keep complaining about keeps increasing by precisely one year every year? The oldest millenials that the media and some miserable oldies keep harping on about are now 40. Damn those 40 year olds and their desire to live without room-mates!!!

        • boomengineeringMEMBER

          Just went to get the Sprinter registered but the owner said his licensing mechanic couldn’t handle the lifting of wheels so retired at 60 yo.. That young whippersnapper’s a whimp I recon. Those young 60 y olds can’t work like us 20 year OLD’s.
          While were at it, the owner can’t get mechanics and he probably pays well too.
          Hey Ermo, I’ve been struggling to get my feet on the 6’4” and 6’8” short boards but the waves have been bigger lately (and this morn) so have taken the 8’6” gun out and catching the bombs all the way to shore. Putting an order in for a mini mal for the small days.

          • Cynical snake

            “the owner can’t get mechanics and he probably pays well too.”
            This is the legacy of privatising all the government industry 20-30 years ago that was responsible for training huge numbers of apprentices across all fields. But training apprentices costs money so the first cost saving made is scrapping the apprecticeship programs.
            Hence decades later we have chronic tradesman shortages, and since they require actual australian qualifications they can’t be filled by the “skills shortage” migrants.

          • Hey Boom, without wanting to sound patronising as I think I’m a bit younger than yourself ( 49 a few days ago), but do you work hard on your pop up strength and flexibility? I’ve recently been making a concerted effort to improve in this regard and it’s made an incredible difference. Giving up the piss certainly didn’t hurt though. Not sure if you’re keen to go to that extreme. Hope you’re gets out some waves, it’s been a pretty spectacular run around here lately. If I’ve got to be surfing East coast Oz then I wish it was always like this!

          • boomengineeringMEMBER

            Heading for mid seventies and have been told on many occasions to do those pop up exercises but I’m happy just being in the water, and getting a stand up is just a bonus. That said I’ve never been good in small waves, the bigger the wave the better I surf.
            Strength has never been a problem hence the low cadence uphill on the cycle with 81 tooth chainring made of scrap checker plate. Also
            used to be a powerlifter and still do weights at home.

      • RobotSenseiMEMBER

        “Those young people don’t want to be serfs all their lives by working for minimum wage and paying the rent in my investment portfolio I have lucked into over the last 30 years of bull-market housing? A pox on their houses!”

        • Ronin8317MEMBER

          Not minimum wages, but below minimum wages. Even 3-hat restaurants are doing it.

      • Absolute BeachMEMBER

        Funny you should say that Ermo. I find that the young fellas who have moved out of home will do the hard yards without bitching. Often Mum and Dad have made the call and there is not a choice to move out- the kids sunk or swim. And they prefer to swim. But the young ones that can still get a free kick with cheap rent in the family home (or no rent) those one’s won’t do the hard or repetitive work. They take sikkies. And often they tell me Mum and Dad say it’s ok to stay at home cos’ they are saving. But they don’t. They have the flash cars, and flash toys.
        The best workers are always the one’s with no choice, or just want a good life. Age isn’t the only issue. It’s motivation that matters, and it can be encouraged, taught and fostered. Doesn’t seem like staying with Mum and Dad at 20+ is good for motivation.

        • Great insight. I only stayed home whilst at uni – I worked at a local newsagency (forsaking junior pennant golf, which I was fairly ok at) starting at 3.45AM most mornings, leaving at 8 or 9 for a 90min commute – drive to station then Vline to uni all day. On weekends, up at 3.30 for 3.45 newspapers, delivery run, open shop till close home for 2 hours reopen 5-7, count tills, do it again Sunday all to pull my weight and save. Dad took me to that newsagent at age 15 to get a job.

          Compared to our neighbour’s son. At home till 19, never made to get a school job (regional setting, 15 mins from town mind, but still) or weekend job. After school, zero prospects. Only finding his feet as a mechanic 8 years later.

        • boomengineeringMEMBER

          Just described my SAH younger son but he’s 40 yo. Not a cent to his name, spends it as he gets it.
          BTW Apart for asking people on North Cott beach for empty bottles to cash in at age 6 onwards my first job was paperboy at age 11 and I raked in 4 times as much as previous workers who were older. Used to deliver, also sell at OBH and a four mill in North Cottesloe.

        • Yep…. you cannot train, coerce or force motivation and ambition. Its also true as you note that unless they are shoved out of the boat they will continue to grovel without any responsibility. They play parents with the guilt trip. Its funny watching from the sidelines but also scary.

      • Ever had the, fist thumbing on the table, winning argument of, imagine how much worse it would be if the other mob were in government!
        Can only ponder, I probably at best have 30 years of life left.

  2. working class hamMEMBER

    Why is it always former politicians with great insight, suddenly after they lose office, logic and clarity return.
    I hate an insightful former MP just as much as a ignorant sitting one, the interviewer should have asked exactly what they did whilst in office to rectify the issue.

    • Cynical snake

      That’s simples,
      because the party is funded by donations from big business and as such they set policy agenda.

      See Peter Garrets loss and regaining of insight upon joining then leaving the labor party.

    • working class hamMEMBER

      Fair point on John Black, a growing number of ex-MPs seem to see the light post exit, or maybe just the ones with book deals?
      The Garret shift was like watching a train wreck, that is a valuable lesson about the 2 party system and just how far from their roots the Labor party has moved.

  3. Display NameMEMBER

    Lets see the “independent always” SMH run this line.

    I ran this line in their comments section for years and got banned.

  4. MathiasMEMBER

    Helps if your Media Broadcaster is supported by its very own Political Party.

    Thats what MB needs.

  5. Those words, however pleasant wont be leaving the mouth of a sitting politician any time soon. I’m surprised that interview hasn’t been scrubbed form the ABC already.

    Case in point, in last nights ‘budget summary’ the ABC choose to run with the narrative that migration was a ‘budget loser’, not a single mention of any counter factual of course or how low migration might be a ‘winner’ for others in the economy? This from a pool of business/economics journalists apparently?

    Not long now before the ABC goes full Disney and once that diversity program is rolled out, any and all dissent from the unspoken internal ideology will be aggressively stamped out. (for context, feel free to google the very limited press available on the leaked documents from Disney’s new staff training. For all the partisan, cultural crap we carry on with here we should at least be thankful we are not yet the US of A.)

    • Cynical snake

      “we should at least be thankful we are not yet the US of A.”
      They seem to be trying really hard to get there in many many aspects.

      • Indeed, it seems that it’s only a matter of time unfortunately, I hold out hope that the experiment fizzles offshore before it becomes our no.1 import.

    • It seems to be in the pipeline. Story in SMH today about a young indigenous woman who thought that eating disorders were only something afflicting “white” women and how she needed an indigenous owned gym in order to get fit because of , you know, gym equipment related cultural sensitivities I suppose. The paper didn’t seem concerned that behaviour like this normalised segregation in society.

      No comments I posted made the cut surprisingly enough.

  6. ErmingtonPlumbingMEMBER

    Listening to some bloke being interviewed on ABCs radio National this morning, in-between jobs, and he was going on about the urgent economic need to get numbers back to pre Covid “norms”.
    He was repeating the line that this increase (in immigration) would create Higher wages for Australians due to Australians supervising these foreign workers.
    Such a crock of shyte.
    He then went on about Aged cares desperate need for more foreign workers.
    The ABC radio presenter challenged none of his shyte.

  7. Jumping jack flash

    “So here we have another rehash of the arguments that MB has made for nearly a decade: that Australia’s mass immigration program suppressed wages”

    No! It suppressed CPI. Wages follow CPI.

    The fundamentals was devised by Howard as Workchoices, which was summarily rejected by the people, and rightly so. Rudd then opened the borders to initiate his own style of Workchoices, it was very effective.

    Both of these decisions to suppress CPI were made during a time of high inflation due to the “golden age of debt” a periof where debt was growing at the correct rate to create debt, and feed back into CPI and wages.

    Of course back in those unenlightened early days of the operation of the debt economy, this threatened to raise interest rates.

    They quickly fixed this problem and now since interest rates are never going to be able to rise again, at least not while the economy is made from debt, there is no need to suppress CPI any more. Let it rip.