Labor, unions: Temporary migration surge will crush wages

Labor and the unions have tentatively pushed back against plans to quickly reboot Australia’s immigration program, arguing that flooding the nation with temporary migrants will crush wage growth:

Opposition immigration spokeswoman Kristina Keneally, citing Dr Lowe, said high levels of temporary migration had contributed to Australia’s sluggish wage growth.

“We need a migration system that ensures that Australians get a first go and a fair go at jobs. We need a migration system that stamps out exploitation. We need a migration system that builds upon Australia’s successful legacy … of permanent settlement,” Senator Keneally said.

“This Liberal government over the last eight years has pushed temporary migration to historic highs. It has led to shocking exploitation of temporary migrants. It has led to wage theft, and … it spreads across the economy”…

ACTU president Michele O’Neil said federal government policy favoured temporary migrants over permanent migrants, opening the way to exploitation of vulnerable people and driving down wages.

She said claims of a skills shortage could be addressed by offering potential workers better pay.

“We are concerned that claims by employers in relation to widespread skill shortages have not been independently verified and in many cases could be addressed by offering higher pay and conditions to attract local workers,” she said.

“This government has consistently watered-down and removed labour market testing requirements in trade deals and visa programs, meaning that employers can get access to vulnerable temporary visa workers without even advertising the job locally first.”

This is a good start. But Labor needs to do two things with respect to immigration policy.

First, it needs to promise to run an immigration program post pandemic that is significantly smaller than the one run pre-pandemic. Australians want a substantially smaller immigration intake, as confirmed by recent opinion polls:

 

The overwhelming majority of Australian also do not believe that the nation needs more people:

Why? Because more people means declining liveability, a degraded environment and more expensive housing:

And before somebody howls ‘dog whistling’ or ‘racism’, lower immigration is overwhelmingly supported by migrants as well as the Australian born:

Second, Labor require all work visas (other than the well-regulated Pacific Islands Seasonal Work Program) – both temporary and permanent – be paid at least at the 75th percentile of earnings (preferably higher). This would equate to a minimum salary of $90,500 currently, which would rise over time with earnings:

How much Australians earn

The 75th percentile would set a migrant pay floor of $90,500, which would rise in line with earnings.

Setting a pay floor at this level would ensure that work visas are used sparingly by Australian businesses to employ only highly skilled migrants with specialised skills, not abused by businesses as a tool for undercutting local workers, reducing wage costs, and eliminating the need for training.

In other words, Labor should represent Australian voters, rather than big business, and take a lower immigration platform to the upcoming federal election. Doing so would see Labor storm into office in a landslide.

It’s time for Labor to represent Australians and its traditional working class base.

Unconventional Economist
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Comments

  1. Look on the bright side: hospitals will be crushed, the least worthy and anti vaxers will be left to die in the corridors forcing a cut to immigration

    • Fishing72MEMBER

      Wut? Do people still believe the Covid death plague storyline? I’d assumed that such a fantastic belief was nothing more than a meme. Strange. Are they not aware of the 99.98% survival rate?

    • hospitals will be crushed, the least worthy and anti vaxers will be left to die

      I was speaking to a gentleman the other day. When Covid came he lost his job then had a stroke. I was surprised because he is not an old man and has teenage children. He is strongly pro-vax, and I am afraid to mention to him what might have caused the stroke.

      Is this the sort of man you would like to see left to die without treatment?

      • I don’t wish for anyone to be without treatment, but that’s what’s being risked for a bunch of tourists, dodgy students, and visa slaves.
        My dad got astrazenica clots, I’m just anti astrazenica

  2. Lord DudleyMEMBER

    Behind door A, we see higher wages, and given Australia’s self-imposed ludicrous cost base, substantial inflation and the absolute inability to compete on anything except red dirt, coal, gas, and agriculture, ultimately leading to high unemployment. And don’t think a crash triggered by this will fix anything; Australia’s economy is now so structurally hollowed out and reliant on commodities that given an economic and currency crash, local substitution and a rise in exports simply isn’t going to happen. Filling up those V8 Land Cruisers will simply cost $300 instead of $200.

    Behind door B, we see wages crushed by mass immigration, and the status quo continuing.

    Take your pick. Option B will be chosen, because that’s the one that doesn’t hurt capital.

    • Arthur Schopenhauer

      All of those industries strip mine the continent. After a brief renaissance, Aussie farming practices are returning to practices that denude the country of its topsoil. Meanwhile, fracking is poisoning the aquifers that make farming is semi-arid areas (other countries call them desert) possible.

      Strip mining the population is a cultural mindset.

  3. Keneally could simply say, under Labor, low net migration, we’ll never exceed 75,000. She can’t do that – it would represent ordinary voters. Or, she can spend every week until the election, fibbing, equivocating, back flipping, hair splitting. She can do that – it keeps in with Labor’s preferred young, degreed, urban, constituency.

    • Kenally also seems to say –
      The answer to wage exploitation of temporay visas is ! more permanent migration. (as apparently permanents can leave for another job). Still no explanation of why large migration is needed.

  4. Fishing72MEMBER

    This is Labor’s version of “Stop the boats”. A nod and a wink that there’s a problem but not one which they’ve any intention of fixing.

    • refugees, immigration. different topics.
      also, covid “survival” may not look how you think it does.

      you’d do better to keep quiet and leave some doubt

      • Fishing72MEMBER

        Ummm..that’s the point. LNP did the ol’ bait ‘n’ switch when they made a fuss about border control out of stopping the boats whilst bringing in hundreds of thousands of immigrants by plane. This is the ALP version. Conflating the “refugees” with immigration is LNP fundamentals.

        As for the Covid survival rates….the statistics are there for all to see. You should educate yourself instead of embarrassing yourself online. Unless you’re over 80 with comorbidities the odds of dying are tiny.

  5. C'est de la folieMEMBER

    Real dumb is our media talking about ‘shortfall’ ……….

    Huge migrant shortfall prompts warning surge in temporary workers could dent wages

    https://www.theage.com.au/politics/federal/huge-migrant-shortfall-prompts-warning-surge-in-temporary-workers-could-dent-wages-20211020-p591kf.html

    By Shane Wright and Jennifer Duke

    October 21, 2021 — 5.00am

    Australia could face a shortfall of almost 1 million people by 2024 due to the pandemic-induced collapse in migration, but reliance on temporary residents could slow wages growth and hit the nation’s economic recovery.

    OK, our first question is ‘what shortfall?’ – what the almighty F does that actually mean?  We wont be able to do something? – something meaningful? Something that earns the nation an income? Or is it a bullshit shortfall a shortfall in our ability to do or see or know of something ultimately meaningless and which delivers sweet FA of benefit into the lives of other punters in Australia?

    From there we move along to ‘why would we need a reliance on temporary migrants?’  Why don’t we just get Australians – ordinary everyday people like you or me, or your kids maybe  – to do whatever we think we need those temporary residents for? And why would we be talking about slowing wages growth?  We have had circa 1% wages growth for a decade and we have an entire economy inside a bubble?  Why don’t we just open up the economy and take its head out of its bum cheeks?  Are these guys saying that we can have pay rises with the economy’s head is on the dark side of the sphincter by any means other than an outright political and policy decision to make sure everyone gets one?

    Business groups and some economists are concerned skills shortages across the country will weigh on economic growth unless the federal government lifts the cap on migration when the border restrictions ease. However, the Labor Party, Reserve Bank Governor Philip Lowe and unions say too many low-paid temporary migrants could limit the income growth of all workers.

    This week, Treasurer Josh Frydenberg signalled the government was considering a re-think of migration policy after the pandemic, which contributed to a collapse in immigration numbers.

    The country lost a net 96,600 people in 2020-21 – the biggest exodus from Australia since World War I. Net overseas migration is expected this year to be minus 77,400 before a recovery next year with an additional 95,900 people.

    OK, next issue.  What skills shortages are our business leaders talking about? Is there a single job class or profession with a shortage of more than 1 or 2?  Even then if there were for (eg) mental health nurses (which has been seen in the media this week) then why not train up some locals?  But even if we want some foreigners in as well we are only talking maybe a couple of thousand tops….

    And that collapse in immigration numbers…..why is that important again?  Is that a collapse in the vitally important skills coming in to feed our dynamic competitive economy?  Or is that a collapse in bums on seats buying houses, loads of imports, standing in the checkouts alongside us at Coles or Woolies, delivering our pizzas and undercutting the jobs prospects of us and our kids?

     

    EY chief economist Jo Masters said that before the pandemic, net migration added 250,000 people to Australia’s overall population. The cumulative impact of COVID-19, however, would mean a net shortfall of 375,000 migrants in a single year.

    Once the full impacts of the pandemic have washed through the economy, and the international border is re-opened, Australia will have 830,000 fewer people by 2024 than had been expected in this year’s most recent intergenerational report.

    Jo and the journalists need to sit down and take a breath.  There isn’t a shortfall unless we assume that Australian society is to be run as the by-product of a financial model delivering profits to shareholders.  It isn’t – it is a society in which the priority is people and their wellbeing.

    Australia may have 830k fewer people in 2024 than it thought it was going to have in 2019, or even this year.  All we need to do is rejig the forward estimates of what we will or wont be doing and paying for to reflect the new estimates.  Financial analysts do this all the time – they adjust estimates, and models.

    But the upside is we don’t need to pay for them, and we can get them in any time we like if we have a reason to get them.  But at the moment it appears we don’t – because all we do as a nation is dig things out of the ground and load them on a boat for China.  And the side effect of having that 830k fewer people is that business will be more inclined to get some of us to do that which needs to be done or will decide we don’t really need to do it – and if we don’t really need to do it is there any value in importing migrants to do it anyway?

    She said ahead of the pandemic, there had already been a drop-off in the number of people moving between jobs and moving between states looking for work. This all meant the skills shortage facing the country could not be easily solved simply by increasing migration.

    “These factors mean that a skills shortage is the new normal for many employers, and will become a significant issue for policymakers if it is allowed to impede on Australia’s progress,” she said.

    “While opening our borders will ease this pressure, it is not the silver bullet to the looming skills crisis that many believe it to be. Australia is facing structural skills shortages which have previously been masked over by high levels of migration.”

    What is Jo suggesting here? People are OK with their jobs and have stopped looking for something better for a while? How the hell does that actually mean increasing does or doesn’t fix anything?  It is a complete non sequitur.

    And once again we come back to the question of – What actual skills shortages are there?  Please nominate an actual skill we are in short supply of – especially one we need more migrants for and couldn’t train ourselves right here in Australia with an education system desperate for a role seeing as the foreign students have dried up…….

    The NSW government is supportive of a higher intake of migrants – Premier Dominic Perrottet says he wants a “big NSW” – but Victorian Premier Daniel Andrews said on Sunday many factors contribute to economic growth though he acknowledged his state was more dependent on international students.

    “You wouldn’t want to put more strain in certain areas but you also wouldn’t want to starve other areas of the fuel that they need and that comes from more people coming here and spending and investing,” he said.

    OK here are some Premiers into the mix for this incoherent article.  Dom wants big NSW – to do what?  Dan sees migrants as strain and fuel – but does he see his state as doing something meaningful too provide a better life for the people currently there or is he seeing migrants as a fresh load of people to be shorn for profits while queuing on our public transport or roads or medical centres?

    Does either Dom or Dan have a plan? Does anyone? Do either of them want to articulate how they are going to provide better lives for more of their people?

    Parts of the federal government are lukewarm to an increase in migration. Ahead of the pandemic, Prime Minister Scott Morrison announced a cut in the migrant intake to 160,000 a year. But Agriculture Minister David Littleproud said migration was vital, especially for regional Australia.

    “We are bursting at the seams ready to make a whole lot of money for the country but we don’t have the skill sets out there,” he said.

    “There are more jobs out there than you can poke a stick at, but we do need people to come in and migration is a way to do that, so obviously we have to look at that.”

    ScoMo did cut because his focus groups were telling him the natives were getting restless.  But he didn’t cut much.  Some might have called it a nip and tuck or a cosmetic cut.  Someone needs to explain to David that the only people bursting at the seams to make money in the field he is talking about are employing people to bend over or reach up and pick it and less often to tape up boxes or to stack boxes or sometimes to trim up the product a bit.  He isn’t talking about a need for PhD’s.  And the more jobs out there he is talking about last for about 2 months before the people doing them need to move on.

    Job advertisements jumped 4.9 per cent over September to 229,000 vacancies on National Skills Commission data, with elevated levels of recruitment activity compared to pre-pandemic levels.

    During the pandemic, more than half of employers surveyed by the commission have experienced difficulty recruiting staff, with higher-skilled workers particularly difficult to find. Employers cited lockdowns and restrictions, both current and potential future limits, as some of the biggest concerns for the rest of the year.

    Job advertisements are up as business get back into gear after a year or two of lockdowns? Could that be it?  Ok, employers are getting some issues recruiting staff – have they tried conditions and remuneration variables?  And those higher skilled workers they need – are they inward facing living off the population Ponzi or are they doing something meaningful?  Should we set about training some more of our own?

    Opposition immigration spokeswoman Kristina Keneally, citing Dr Lowe, said high levels of temporary migration had contributed to Australia’s sluggish wage growth.

    “We need a migration system that ensures that Australians get a first go and a fair go at jobs. We need a migration system that stamps out exploitation. We need a migration system that builds upon Australia’s successful legacy … of permanent settlement,” Senator Keneally said.

    OK, Props for KK and the ALP paying some lip services to employees, and the observable fact that migration has had the effect of suppressing wages.  But even there what is she actually going to do about it should she get a Ministers seat?  Will the ALP come out and state a position?

    “This Liberal government over the last eight years has pushed temporary migration to historic highs. It has led to shocking exploitation of temporary migrants. It has led to wage theft, and … it spreads across the economy.”

    She has a point.  Has anyone done any statistical analysis on the percentage of Australians who are subject to wages theft, superannuation embezzlement and conditions fraud are actually recent immigrants?

    Major employer representative organisation Ai Group chief executive Innes Willox said the most common concern among businesses was the inability to fill roles.

    He said while businesses supported increased investment and an improvement to the nation’s training system, the government’s pre-COVID cut in the migrant intake had to be reversed.

    “At the very least the permanent migration planning level should be restored to the previous cap of 190,000 places per year,” he said. “There is a strong case for considerably more than this while we catch up on last year’s losses.”

    Innes is the purveyor of the finest quality bullshido known to man.  Could Innes point out any significant numbers of employers unable to fill roles? Could he confirm to us those employers have actually tried massaging remuneration or conditions to entice punters in?

    And catching up on last years losses……….are they the same losses which have underpinned pay increases and job opportunities for some who haven’t had them for a decade Innes?

    ACTU president Michele O’Neil said federal government policy favoured temporary migrants over permanent migrants, opening the way to exploitation of vulnerable people and driving down wages.

    She said claims of a skills shortage could be addressed by offering potential workers better pay.

    “We are concerned that claims by employers in relation to widespread skill shortages have not been independently verified and in many cases could be addressed by offering higher pay and conditions to attract local workers,” she said.

    “This government has consistently watered-down and removed labour market testing requirements in trade deals and visa programs, meaning that employers can get access to vulnerable temporary visa workers without even advertising the job locally first.”

    Michele has a point

    • Good stuff. I believe KK is genuine on this but given the reaction from her colleagues last time I can’t trust Labor to fix this. The only thing Labor likely to do is swap temps for perms which won’t really fix the issue, and could in some ways be worse, eg would all those temps that left during covid have stayed if they were perm & the country would be payiig more benefits etc?

    • Thanks, well worth the read.
      I disagree with a few points but that’s just nit picking, overall you nailed it.
      If I were to add anything it would be a paragraph on real world “Productivity”
      As in, How does Immigrant labour increase our nations aggregate Product output / revenue?
      Experience suggests that our 21st century crop of Immigrant workers is not directly adding to our Production capabilities. This is a huge about-face from the mid/late 20th century Aussie immigrant who added critical skills and or worked in remote regions (mining and agriculture job).
      In short, wrt our mid/late 20th century economic model, Immigration served a critical role in that it enabled Australia to grow externally competitive capabilities or simply exploit its available opportunities whereas 21st century Immigration is just a cost that average Aussie workers must bear.

      Australia’s Real world Productivity is a discussion that needs to be had, It’s time to bury these meaningless Treasury graphs and self serving Productivity definitions.

        • I’ll see what I can find but the problem starts with things like measurement methodology.
          What activities are included and what’s excluded.
          The GDP crowd pretty much divide GDP by aggregate hours to get Productivity, so any increase in economic activity translates to increased Productivity if labour pool says more or less constant
          Ten guys wanking on their own does not increase Productivity but ten guys paying each other in a circle jerk equals a dramatic increase in worker Productivity. Go figure! for me it’s all just wanking with both activities contributing zero to worker Productivity.
          Unfortunately excluding certain activities quickly adopts a religious / moral judgmental standpoint which is also not useful. It’s especially difficult in a changing world with emerging opportunities, something like Sex Tourism or CAM girls, or even Gaming Twitch feeds, would be high on the list of activities we might not want to see if we start excluding anything.

  6. Fishing72MEMBER

    Dr Demography’s turn at the Ponzi scheme promotion [email protected] this morning. Their propaganda is utterly relentless. No comments permitted with this one though-they might point out that Dr Allen has zero expertise in many of her statements AKA her lies.

    • You can always ping her on Twitter – just respond to her latest question asking which place has the best donuts in Canberra

    • strange economicsMEMBER

      They did comments. 90% of comments disagreed with higher immigration.
      Does demography base on any statistics ?
      Perhaps if you are part of the education industry immigration is an unalloyed good.
      Not a single statistic just unsupported opinion and correlations without any analysis of causation.
      And consider whether the large permanent immigration effect of higher wealth Australians moving here over the last 2 years when Dubai and London closed – estimated as 600Kpeople. Only a shortage of low wage workers.

  7. Trying to work out what’s going on
    Here we have KK
    The Kouk was on RNs PM last night being very clear that the huge migration program has killed amenity wages hospitals the roads etc – he did not equivocate . It’s unusual to hear this side of things
    Then you had Gabriel de Sousa from Ceda stating unequivocally that migration absolutely correlated with increased wages and jobs
    Then the Fairfield mayor
    Then Dr Donut
    Shane Wright in the Smage

  8. Arthur Schopenhauer

    Insane Levels of Immigration must be polling very badly. There’s an all out propaganda blitz.

    Not sure if anyone has also had this experience: people I’ve spoken to in Melbourne from all backgrounds, are very, very angry about the record immigration proposals. (Recent immigrants to first fleeters.)

  9. SupperannuationMEMBER

    I emailed my Federal Labor candidate to ask about the position. The response showed that ALP want to make the choice about permanent vs temporary rather than higher vs lower migration. Labor will also argue that permanent migration increases the tax base which will help to fund hospitals etc and is needed to help build industry (as opposed to temporary migration helping businesses). Also got the usual talk about multiculturalism, investment in social housing and moving to net zero.

    • As expected. Labor are completely useless. Excessive permanent migration is what grows the population over the long-run (since temporaries must eventually leave). So Labor therefore supports a ‘Big Australia’ alongside crush-loaded cities, water shortages, environmental destruction, etc.

      • Jumping jack flash

        The business lobby is hooked on wage theft. It is just a reflection of the get rich quick mentality of modern society. “Give me your money now, i have debt to buy, to hell with everyone else, and the future.”

        Who are the Labs to stand in their way if the Libs dont?

      • Yes, I expect that the only one of KK’s points that would survive Labor coming to power would be switching temps to perms

        • Unfortunately at the moment KK only needs to present a different Labor POV to ensure she has the numbers to win a party leadership vote. I’m certain that once she has the leadership tussle behind her, she’ll modify her position… all in the best interests of the party of course.
          I just wish we still had Politicians with firm, unwavering convictions and rock solid beliefs who told the pollsters to gfy. However I suspect the polls would show that such a Politician was unelectable and they’d be quickly frog-marched out the door to make room for an electable face. What does that say about us?

          • I just wish we still had Politicians with firm, unwavering convictions and rock solid beliefs who told the pollsters to gfy.

            You do, but you’ll have to look at the smaller parties, and understand that anyone doing this will be pilloried by a media that either does not want to, or simply can not, handle political analysis with more than two options.

          • Yep the real problem is that party machine has captured everyone involved and now sets the narrative.
            The only solution is a movement away from the two-party system, so guess what that’s the one thing that both parties can agree needs to be protected or even better strengthened.
            Not sure how Australia moves forward but I suspect it will require complete economic collapse coupled with some Politician emerging that captures the imagination of average Aussies.
            Occasionally I wonder if one of our new generation of wonder kids (like say Scott Farquhar) might one day enter Politics.

  10. Jumping jack flash

    Resumption of CPI suppression tactics such as wage theft will be the death-knell of the Australian economy.

    We need wages to go higher so debt acquisition and spending can resume and accelerate to infinity and beyond. There are no more interest rates left to cut to create additional debt capacity in an environment of stagnant wages. Banks grow tired of QE forever type strategies, and Libs would never implement a UBI.

    Debt spending is the basis of our New Economy of services and retail of imported goods. Our incomes are maxxed out on paying for our existing debt.

    • boomengineeringMEMBER

      and Libs would never implement UBI.
      But a pseudo abortion of UBI aka Job keeper, seeker etc which poured funds as unfairly as possible diminishing the value of savings.

      • Jumping jack flash

        Barely. The people barely saw much of that. The businesses either “vanished” it or handed it back.

      • Reus's large MEMBER

        The Libs would implement UBI, but it would just be for their mates in big business, like job/profit keeper

  11. Australians need to see the outside world for comparison and how we are tracking similarly i.e. ageing and stagnating populations backgrounded by an expected global peak by mid century (many think we have already), hence, most try to attract more temporary migration to plug skill or age gaps and pay taxes; there is no guarantee and our supposedly high NOM could decline into the future wit competition for the same.

    If anyone has ever done research this is a little underwhelming i.e. presenting the old 19thC immigrant vs local worker divide, blaming the former, but ignoring the lack of regulatory compliance by Australian businesses on paying award rates, super, job security, minimum conditions, WHS, union support etc.

    Like too much media based reporting or research, the sources e.g. APRI are sub-optimal on credibility and habit of claiming circular narratives i.e. ‘ he said, she said’ but is not credible evidence, it’s simply personal opinions, beliefs, gossip and biases masquerading as grounded expertise.

    Evidence of this is how the permanent population dynamics are ignored or bypassed i.e. increasing dependency ratios, ageing of the workforce (baby boomers in transition being followed by lower fertility) and now in terminal decline as the baby boomer ‘bubble’ transitions to retirement.

    Australia, now many more developed nations too, have used non permanent churn over of temporary residents e.g. students, temp workers, NZ’ers etc. as ‘net financial budget contributors’ while our permanent migration levels added to below replacement rate may be lucky to approach the 2.2% level (inc. in the NOM) to maintain estimated or raw population levels.

    Another question is why does (Anglosphere preferred) UNPD data and formula e.g. NOM, lead to inflated population numbers versus the OECD’s more population and demographic data? Because the latter only includes permanent population and not the ‘nebulous’ NOM filled with various temporary visitors, defined by the UNPD, then presented by media, without analysis, as high headline ‘immigration’ suggesting permanent migration … statistics 101 precludes the use of headline stats.