Yesterday, CBA’s head of Australian economics, Gareth Aird, released data showing that the coronavirus pandemic has reduced the number of non-resident workers in Australia from 521,000 in Q1 20 to 235,000 in Q1 21:
Temporary migrant workers leave Australia.
In turn, this has driven unemployment and labour underutilisation down, which will soon likely result in stronger wage growth:
According to Gareth Aird:
“The labour market will tighten very quickly from here. A lift is wages growth is the inevitable consequence of a tight labour market as firms are forced to pay more to attract workers”.
In other words, the sharp reduction in temporary migrant workers is excellent news for Australia’s long suffering workers as it will very likely generate stronger wage growth and increased employment opportunities.
As usual, the hospitality industry is crying, explicitly admitting that it relies on cheap exploitable migrant workers to lower its wage costs [my emphasis]:
“The labour shortage is pretty well everywhere: Baristas, waiters, chefs of all levels,” [Melbourne restaurant owner Mark Normoyle] told TND…
“I’ve been working in kitchens for over 30 years and in the last 10 years I would say about 60 per cent of my kitchen staff would have been international workers,” Mr Normoyle said.
“A lot of those people left during the pandemic.
“There’s a big hole in our industry”…
Mr Normoyle said many businesses in his industry aren’t in a position to offer higher rates of pay, particularly after lower-waged international staff became the competitive standard over the past decade and pushed down prices in the process…
“At the end of the day, we can only charge what the market will pay. We work off very small margins as it is.”
Let’s recall that the hospitality industry pays by far the lowest wages in the nation:
The Accommodation & Food Services industry pays the lowest wages in Australia.
The hospitality industry is also ground zero for wage theft and exploitation of migrant workers.
Any industry that relies on cheap exploitable migrant labour to thrive is not a sustainable industry. It needs fundamental structural reform.
The truth is, if the hospitality industry offered decent wages its so-called labour shortages would disappear. But while it continues to offer crappy wages and conditions, then labour shortages will remain. It is called a “labour market” for a reason – it too is subject to the laws of supply and demand.
Of course, it is easier and cheaper for the hospitality industry to simply lobby the federal government to reopen the immigration floodgates, since this will keep wage costs low, expand Australia’s population, and bolster the industry’s profit margins.
It’s funny how the hospitality industry only believes in supply and demand and “the market” when it allows them to keep pay low.
