Hospitality industry demands cheap, exploitable migrant workers

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Restaurant and Catering Australia (RCA) continues to pressure the Albanese Government to open the immigration floodgates to ease chronic labour shortages across the hospitality industry:

The Restaurant and Catering industry Association says there are more than 900,000 visas waiting to be processed by the Australian government…

[RCA CEO Belinda Clarke] – who met with the office of the minister for immigration Andrew Giles this week — said it could take more than six months for the Albanese government to work through the [visa] backlog.

“We are so far behind in this processing, that the light isn’t clear of when we’re going to get through this, it’s going to be a good six months to a year [until] we’re really going to be able to get a clearer picture”…

This comes after RCA last year demanded 100,000 special hospitality visas:

Paddy O’Sullivan, who is the chief executive of the Australian Hotels Association… has joined Restaurant and Catering CEO Wes Lambert in calling on the federal government to fast track at least 100,000 special hospitality visas…

“This is the worst workforce crisis for hospitality in the history of Australia” [Wes Lambert said]…

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Isn’t it funny how the hospitality industry continually cries about “labour shortages” and demand migrant workers, yet it refuses to lift pay to attract and retain workers?

The hospitality industry has the lowest pay rates in the nation by a very wide margin, according to the ABS:

Australian median weekly wages

Hospitality is the lowest paying industry in Australia.

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The median weekly pay across the Food & Accommodation industry was only $500 per week in August 2021, little changed from 2015.

As long as the hospitality industry continues to offer poor wages and conditions, labour shortages will remain. It’s as simple as that.

A recent Senate report also showed that the hospitality industry is the nation’s biggest wage thief:

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In many industries, underpayment is deliberate and systematic, and often normalised, especially for migrant workers. Some research suggests that although many workers are aware that they are being underpaid, it is accepted as ‘the norm’, while for some employers it has become a ‘cost of doing business’ or a standard business model, impacting individuals and families.

The following statement demonstrates this point:

“In hospitality, exploitation has become the norm … I once complained to my boss about the overtime work. He said, ‘Well, suck it up. Look around you! Everyone is working the same way. It’s been like this forever’. I know my workplace rights, but I wouldn’t dare to report my employer for underpayment. I know it will make no change because every hospitality business in Australia underpays workers. I am sure I will be known as someone who reported their boss to the authorities and get blacklisted. I cannot afford to never get another job in Australia”.

This has led to a vicious cycle of underpayments with wider societal and economic impacts:

“… where wage theft gets hold as an industry model, competition means that it forces down wages across the board, so that wage undercutting becomes widespread and normalised”…

And let’s not forget that RCA lobbied the Fair Work Commission against lifting the minimum wage, claiming that it would lift the price of a coffee to $7.

Giving the hospitality industry greater access to foreign workers will only worsen the systemic exploitation already prevalent, keeping wages low and denying local workers employment opportunities and a living wage.

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Any industry that relies on cheap exploitable migrant labour to thrive is not a sustainable industry. It needs fundamental structural reform.

Politicians must stop pandering to vested interests RCA. Otherwise, Australian wage growth will remain stunted and exploitation will continue to run rife.

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.