Back in July, a group of academics released research showing that international student graduates on temporary (485) visas were struggling to find jobs in their field, with many being either underemployed in low-skilled jobs or unemployed.
However, because these international students perceive that the graduate (485) visa represents a pathway to permanent residency, they continue to arrive in Australia en masse, as reflected in international student enrolments and graduate (485) visa numbers surging to a record high in the June quarter:
Data released by the Australian Department of Immigration and Border Protection (DIBP) shows an over sevenfold increase in international graduates’ applications for the post-study visa (485 visa) scheme between 2013-2015, from 974 to 7160 (see figure 1)…
The key findings from the qualitative component of the research show that the poststudy work visa is not perceived to provide international graduates with a competitive advantage on the Australian labour market. Instead, the visa provides them with a pathway to permanent residency (PR)…
Yesterday, a group of academics released another report confirming that international student graduates are struggling to find work, with many occupying low-skilled positions or unemployed:
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The number of international students who stay in Australia after graduating on the temporary graduate visa – often referred to as the 485 visa – is growing fast. There were nearly 92,000 temporary graduate visa holders in Australia as of June, 2019. That’s up from from around 71,000 in June 2018 – a 29% increase.
The 485 visa was introduced in 2008 and updated in 2013, taking on recommendations from the 2011 Knight Review, which recognised post-study work rights for international students as crucial for Australia to remain competitive in the education export market…
Australian government data shows occupations such as “sales assistants and salespersons” as well and “cleaners and laundry workers” are in the top three for 485 visa holders across all occupations.
These findings are supported by research from the Australian Population Research Institute (APRI), which found that most international student graduates (i.e. that arrived between 2011 and 2016) were unable to find professional jobs. Specifically, only 24% of international student graduates from Non-English-Speaking-Countries (who comprised 84% of the total international student graduates) were employed as professionals as of 2016, compared with 50% of international student graduates from Main English-Speaking-Countries and 58% of the same aged Australian-born graduates:
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As noted yesterday, Australia offers the most generous post-study work visas in the world:
One has to ask why, given a huge percentage of international student graduates are struggling to gain meaningful employment and they are clearly adding to the pool of unemployed and underemployed?
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Alongside the proliferation of regular international students permitted to work 20 hours per week (with some working more hours illegally), they are also harming the employment prospects and wages of younger Australians, as noted recently by the Grattan Institute:
As the Productivity Commission noted, where migration does displace existing populations, it tends to affect people with low skills and youth most. That seems to be happening in Australia. And because international students and backpackers are primarily looking for part-time work, they may affect under-employment more than unemployment…
Low-skill migrants might also put downward pressure on wages (if accurately measured). The measured wages of those aged 20 to 34 have not risen as fast as the wages of older workers for some time (Figure 7)…
Australia is now running a predominantly low-skill migration system. People from this system form a material proportion of the younger workforce. Because of visa conditions, many of these migrants have incentives to work for less than minimum wages, and there is anecdotal evidence that many do.
The answer for why this situation has been allowed to persist is simple: to funnel as many international students through Australia’s universities as possible in order to maximise fees:
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The impact on education standards and the employment prospects facing younger Australians is ignored entirely.
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.
