Unions and businesses war over immigration

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The union movement has pushed back against the federal government’s plan to import 200,000 migrant workers by July 2021, claiming doing so would suppress wage growth:

Unions have called for a migration rethink and suggested rushing back to pre-pandemic levels will “clearly” push wages lower than they otherwise would be…

Acting Secretary of the ACTU Liam O’Brien said he was worried about temporary migration in particular.

“We’re deeply concerned about the fact that the Morison government looks to be restarting and really ramping up temporary migration in this country,” he said.

“This clearly puts downward pressure on wages just when we need to see them going up.”

Mr O’Brien said after years of stagnant wages, the government should be doing everything it can to drive them up as fast as possible.

He said rising wages will drive economic growth more effectively than migration, or anything else.

“Sixty per cent of our economy is workers spending money,” he said.

The unions’ claim was supported by a detailed ABC report released over the weekend, which explained how Australian businesses systematically exploit migrant workers and use them to hold down wages:

Every year immigrants come to Australia via loopholes in the immigration system, living and working under exploitative conditions, before securing residency or being deported in the process.

It’s impossible to know how many, because the successful cases remain secret…

Research shows that exploitation, wage theft and other illegal practices constitute the normal experience for a majority of Australia’s temporary visa holders…

People the ABC spoke to ranged from backpackers and international students working for less than $12 per hour — less than half the minimum wage — through to more extreme cases of severe exploitation and modern slavery…

The majority worked in urban centres and bustling city hubs across Australia at venues and institutions that millions of Australians drive by and frequent every day.

Even after becoming Australian citizens, many migrants continue to work in exploitative conditions for decades due to language barriers and a lack of awareness of their rights or how to get help…

Given that there’s an alignment of interests between the exploiter and the exploited — cheap labour in exchange for residency or extra untaxed income — experts say underpayment and wage theft has become so normalised that it’s essentially “hidden” in plain sight…

2017 survey of more than 4,300 temporary visa holders across 107 nationalities found that: “Australia has a large silent underclass of migrant workers who are paid well below the minimum wage in at least 12 industries”…

All around us — in restaurants, hotels, beauty parlours, fruit shops and bakeries, at taxi ranks, in supermarkets and takeaway shops — workers are being exploited…

It is estimated that the cash-in-hand, black economy makes up somewhere between 3to 15 per cent of Australia’s Gross Domestic Product (GDP), meaning tens of billions of dollars are untaxed and lost to the informal employment sector each year…

Now, as Australian cities try to fully reopen, several businesses the ABC spoke to admitted they just didn’t have enough staff to operate at pre-pandemic levels, with some owners confessing that their business model depended on underpaying migrant staff, who often also worked overtime…

But as they return to help jump-start the economy after two years of lockdowns, the exploitative practices and agreements that underpin their life in Australia will be waiting, on a scale that is expected to be bigger than ever before.

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To nobody’s surprise, business leaders are now urging the federal government to open the immigration sluice gates even wider:

Business leaders have called for the annual permanent ­migration cap to be increased from 160,000 to between 190,000 and 200,000 in response to labour market pressures and employers struggling to find skilled workers and lock in long-term investment.

The push to accelerate the ­return of skilled workers comes as Assistant Treasurer Michael ­Sukkar will on Monday release an updated population statement, revealing a slow return to pre-pandemic population levels and faster recovery in capital cities compared with regional ­Australia…

“Melbourne is projected to be the fastest growing capital city from 2023-24 onwards, overtaking Sydney to become the nation’s largest city in 2029-30 at just over 5.9 million people,” [Michael ­Sukkar] said…

BCA chief executive Jennifer Westacott said securing the right workers with the right skills would “get key projects and ­investments off the ground”.

“You can’t employ hundreds of Australians on a construction job if you don’t have a surveyor and you can’t deliver an infrastructure pipeline without engineers,” she said…

Australian Chamber of Commerce and Industry chief executive Andrew McKellar said the government should increase the target for permanent skilled ­migration intake to 200,000 for “at least the next two years”…

Australian Industry Group chief executive Innes Willox… urged the government to link annual growth in permanent migration to national labour market growth in the longer term, rather than having a fixed yearly quota.

Maybe if Jennifer Westacott’s business constituents want an engineer, they should employ one of the many thousands of migrant engineers living in Australia unemployed or driving Ubers?

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A report from the peak body [Engineers Australia] found 47 per cent of migrant engineers looking for work are unemployed.

More than a third who do find jobs in engineering are underemployed, working at jobs below their experience and skill level.

“They’re working as Uber drivers, they’re working in the limited hospitality areas that are available, or they’re unemployed,” Engineers Australia chief executive Bronwyn Evans said…

Nearly 60 per cent of the 106,000 members of Engineers Australia were born overseas…

Ramping-up immigration back to or above pre-COVID levels will achieve exactly the same result as last decade: stagnating productivity, low wage growth, and crush-loaded infrastructure and housing.

The only beneficiaries from this policy would be the big business, property and edu-migration industries, which would gain more consumers to sell to and more cheap migrant workers.

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An ‘Australia First’ immigration policy would cut the migrant intake to historical pre-2005 levels and concentrate policy on training and employing locals for jobs.

Sadly, the business lobby doesn’t represent Australians, just the big end of town. Politicians must stop pandering to vested interests.

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.