Alan Kohler has penned a terrific piece in the New Daily lambasting the federal government for deliberately undermining Australian workers by importing huge numbers of temporary migrant “slaves”. He also calls immigration policy “the most material economic decision to be made by whoever wins the next election”:
Scott Morrison’s can-do capitalists can’t really do wage rises, not for the past decade anyway.
And now they’re demanding to get their imported ‘slaves’ (aka temporary visa holders) back again, to put a lid on wages.
There have been times when wages went up a lot in this country, notably in the 70s and late 80s, brought to a halt by the Accord of 1983 and the recession of 1991.
Then came John Howard in 1996 and the permanent fix of temporary migrant workers.
Now we are about to enter the 10th year of real wage stagnation in Australia – wages minus inflation per worker have been unchanged since 2012. That has meant that real household disposable income has also stagnated…
Unsurprisingly, the cancellation of immigration as a result of the pandemic is starting to put some upward pressure on wages, evident in yesterday’s figures from the ABS.
But now farmers and businesses are demanding to let the foreign workers back in on temporary visas so they don’t have to pay Australians more to pick fruit and wash dishes.
So the question of what happens to wages, inflation, interest rates and therefore the economy as a whole will now largely come down to how quickly the levels of permanent and temporary immigration are restored to where they were, especially temporary visas…
Howard’s ‘optics’
John Howard introduced 457 temporary work visas soon after becoming Prime Minister in 1996 and then doubled the overall net migration in 2005.
Both of these acts were industrial strategies specifically designed to suppress wages…
It worked. By 2016, close to half a million temporary workers were in Australia at any one time, creating a pool of labour that drove wages down…
It was a brilliant strategy that led to a huge transfer from wages to profits, but it came to an abrupt halt last year when the Morrison government simply closed the borders…
Now restaurant owners are complaining that dish washers are demanding $50 an hour. Naturally, they want the ‘slaves’ back.
The RBA governor, on the other hand, would rather wages went up some more.
This is the most material economic decision to be made by whoever wins the next election.
Tellingly, Prime Minister Scott Morrison himself has delayed rebooting immigration until after the upcoming election because he is concerned that it would suppress wage growth:
The Morrison government is resisting calls by business and others to expedite the migration intake between now and the federal election amid fears that such a move could hamper wage growth…
[He] believes opening the floodgates on migration to make up for the pandemic years would suppress wage growth…
Although the government is not ruling out a longer-term approach to tackle the migration challenge, there is no appetite to move before the election. Right-wing parties such as One Nation are opposed and flat wage growth has been a political problem.
Even The Guardian’s immigration defender, Greg Jericho, admits that opening the border to immigration will suppress wages:
The particularly strong growth in sectors facing labour shortages shows that wages are doing what they should – reacting to demand and supply. But once the borders open and those shortages become less acute you would expect wages in those particular industries to moderate.
Anyone still trying to claim immigration does not hold down wages is either delusional or a shill. Everyone else knows the truth.
