The power imbalance between employers and employees

 

It is clear that the Work Choices legislation, coupled with the welfare-to-work measures, has strengthened considerably the power and autonomy of employers relative to non-managerial, non-professional employees. Even before Work Choices, there was a trend for earnings inequality to increase. This is now set to accelerate.

However supporters of the recent reforms argue that, with the prospective ageing of the population, Australia is facing a long period of labour shortages and in such a market environment, workers will be able to dictate to employers rather than the other way round – so they have nothing to worry about!

Is this a realistic future scenario?

 Many economists such as Richard Freeman (New Economist’s View July 30 2006) are rightly beginning to question it. They point to (a) the large and possibly growing surplus of labour, much of it well educated and trained, available from developing countries and the former Soviet Union countries and (b) the increasing mobility of labour across national borders.

This is exactly what we are seeing in Australia. The impact on workers of Work Choices and the welfare to work reforms is being mightily reinforced by what is virtually becoming an open door to labour from overseas – much of it from low-wage countries.
 
Australian employers now have three ways of responding to domestic labour shortages without raising wages: they can import workers; they can off-shore some of their activities; or they can bully their workers by simply threatening to transfer their operations to a lower wage country.

Local enterprises which are subject to intense import competition will be forced to keep their profit margins low (especially if the exchange rate remains strong). This will be the positive social side of globalisation. But many producers will remain, to a degree, sheltered from competition. Faced with an elastic supply of labour, they will be able to improve their profits by holding down wages.

Other things being equal, the future global and policy environment will deliver a paradise for employers, senior managers and profits but not for ordinary workers!

What will all this mean for the economy? In theory a more flexible labour market and increased labour and capital mobility should have positive effects on overall economic wellbeing in the long term (in the same way as improved trade opportunities). But current policies have  ugly implications for income distribution and for the nation’s social cohesion and sense of community. Moreover,  over time, they could produce  a major backlash against structural reform – leaving the economy worse off.

I would prefer to see some moderation in IR and welfare policy and a less open door stance on immigration plus a greater focus on training and active social investment to help build up the capabilities of less-skilled workers. But this is a value judgment. As much as an economic one. What do others think?
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Don Wigan
Don Wigan
15 years ago

The aim of shutting unions out was more about payback to them and the ALP than seriously improving labour market flexibility. And it may well be to the government’s cost.

The over-use of 457s to get in low-cost, low-cost labour, especially to country meatworks and similar could lead to a new outbreak of Hansonist xenophobia. There have already been some dog whistles from Beazley, with the government itself, having recently exploited the issue to the hilt in the ’01 election deservedly looking shamefaced about it. It could become a very destructiv and ugly situation if local low-income people perceive themselves as disadvantaged over it.

If the government really believes it must use 457s, it would be much safer to have the unions on side.

David Rubie
David Rubie
15 years ago

The future scenario is remarkably easy to see:

1) Federal government wants to let kiddies out of school early, ostensibly so they can train somewhere other than University. I guess they are supposed to be fodder for the

2) Completely missing policies on skills training that will fill the gaps that the employers are bleating about.

What they are basically saying is that nobody wants to work for the paltry wages of an apprentice. Maybe, just maybe, if the apprentice wages were raised the kiddies might think it was a reasonable career choice (or people would abandon their current jobs and move across).

All we are going to get is more overseas workers and lots of unemployed and under educated locals. It’s stupid. Throw into the mix the end of the resources boom and you’ve got a major disaster.

The feds and the states could quit carping at each other and make places and money available to train people, or the employers could stop blubbing their crocodile tears and up the wages a bit.

If you were being completely cynical, it just looks like a recipe to cut the floor out of wages in the hope that magically that will make life better for everybody.

pablo
pablo
15 years ago

The Howard Government offer of technical training centres for Vanuatu, Samoa and Fiji? seems to fit with both the Argy and Wigan view. As against the New Zealand guest worker (unskilled) program, Howard only wants access to ‘skilled’ labour through the 457 or future variants program. It will be interesting to see what skills are on offer and do they suit their local island labour market. Would remittances from guest workers, currently making a significant impact, allow island administrations the chance of devising their own skill choices? Or does Howard just simply not trust them to spend the money wisely?

Tony Healy
Tony Healy
15 years ago

Fred, the claim that pending labour shortages will give workers more bargaining power is part of a standard lobbying package used by employer lobby groups, immigration lawyers, the labour hire industry and Indian offshoring industry.

This type of lobbying has an extensive background in America, and in the IT industry since about 1997.

The claims are intended to build support for increased use of contract overseas labour, which is an important part of the business model for an emerging segment of the labour hire industry and for the booming Indian offshoring industry. Paradoxically, Indian offshorers are critically dependent on having their staff onsite.

Long term, these are dangerous developments, allowing relatively dumb businesses like labour hire to thrive at the expense of the trained local workforce. In IT in Australia now, there’s serious concern that good students are spurning IT as a result of these distortions. Monash has sacked 155 staff from its IT faculty, for example.

This use of contract overseas labour also facilitates discrimination against older workers and minorities. A pointer to the duplicity in concerns about an ageing workforce is that these concerns are also being wheeled out in IT, where most of the highly trained workforce (developers) are under 40.

Re Don Wigan’s point, it’s important to realise that concern about the labour market and social equity impact of these programs is not xenophobia. Don also suggests that the government should seek union support for the 457 program. In fact, unions have no problem with legitimate use of skilled visas. More importantly, the unions now understand that 457s are part of a program to undermine unions.

Also, the increased use of contract overseas labour shortly after WorkChoices is not a coincidence. WorkChoices was designed to facilitates these programs. Labour hire lobbyists played an important part in preparing Work Choices.

nasking
nasking
15 years ago

Australian employers now have three ways of responding to domestic labour shortages without raising wages: they can import workers; they can off-shore some of their activities; or they can bully their workers by simply threatening to transfer their operations to a lower wage country.

Or they could get out of their plush, air-conned offices & do a bit of the hard yakka themselves….:)

Furthermore, they could take a pay cut & reduce expenditure on the nights out w/ the mistress…or putting in that new heated pool…& use said savings to improve the environment & condition of the workplace…many are pretty SPARTAN & unwelcoming here…could also give the employers a wee bit more revenue to provide for in-company childcare…that might improve their overall temperament & attract a few retirees & stay at home Mums & Dads into their workplaces. A few pets being allowed might also help.

The potential workforce are out there…but they ain’t stupid…exploitation, abuse, big stick behaviour (which will be the end result of WORKCHOICES) & bad conditions won’t attract anyone.

Time to rethink.

nasking
nasking
15 years ago

The over-use of 457s to get in low-cost, low-cost labour, especially to country meatworks and similar could lead to a new outbreak of Hansonist xenophobia.

Totally agree w/ you Don. Seen it occur thruout my travels. Interestingly, as time passes it’s often the Government who introduced the visas & eventual migration plans who often cynically use the “Outsiders taking your jobs!” theme to gain political traction w/ the workers & naturally xenophobic…or they ally themselves during tight election periods w/ a political group &/or media conglomerate that do make headway w/ this kind of less than subtle racism & fear mongering.

Chris Lloyd
Chris Lloyd
15 years ago

The main purpose of WorkChoices is to kill the unions. The removal of the no disadvantage test means that employers can replace current positions with minimum standard individual contract positions that exclude unions from any role in the workplace. So union membership will decrease to a fraction of the present level and consequently so will their financial base. Since unions provide much of the ALP’s finance, this means that the ALP is literally finished under its current structure. Kaput. History. The next election is the last one that the present ALP will be able to contest.

I hope that we can all agree that the dissolution of the only opposition party is a bad thing. But nature of course abhors a vacuum. The present ALP constitution concentrates power in the hands of a dozen or so union thugs. Ordinary branch members have precisely zero influence over policy or preselection. With the unions no longer justifying their dominance with a cheque book, I expect that a new ALP might rise from the ashes, finally separate itself from the union movement and return to a more democratic base.

Nicholas Gruen
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Nicholas Gruen(@nicholas-gruen)
15 years ago

Fred,

One can feel bad about what’s occuring to the relative market earnings of those at the bottom of the heap in Australia. But to the extent that that is happening and their jobs are going to people offshore or to immigrants (temporary or permanent) their jobs are also going to human beings – who value them.

I don’t have a problem with trying to compensate Australians for the effects of this on relative Australian earnings, but I’ve got grave doubts as to the morality of completely ignoring the benefits of such policies – to foreign people. I acknowledge the worth of countries’ looking after their own, but I don’t think I want them to do it by harming (or preventing trades that beneift) foreigners.

It would take a lot to convince me to give up the radical cosmopolitanism of the discipline of economics.

Francis X Holden
15 years ago

In my time in Ireland in the last few weeks I was rarely served by an Irish born person. Waitresses and barmen and shop assistants (and even a few B&B managers) were predominately Polish or Croatian. IN Scotland there are complaints that Polish plumbers are taking work away from Scots plumbers – mainly by turning up on time, working all day and doing a good job. I was amazed too see Polish grocery stores in Ireland and this isn’t just in the big(ish) cities but in the “typical small irish rural village”

My flights on noted Irish no frills airline, Ryan Air, had Polish hosties and French pilots.

Labour migration is headline news on BBC TV and in papers. I was surprised to see a few commentators refering to Australia as having got the quota thing right for labour visas etc.

A great many of Croatian and Romanian labourers are living in UK crowded 2 or 3 to an already small bedroom and sending the money home and there are many stories of exploitation about.

Fred Argy
Fred Argy
15 years ago

Nicholas you make a fair ethical point which worries me too (the extent of our obligations to low-paid foreign workers).

But can it not be argued that free access to foreign workers (some of whom are exploited here by unscrupulous employers) is potentially counter-productive from both a social and economic viewpoint? It is counterproductive if it leads to more tensions between migrants and local workers, a backlash against structural reform and a community over-reaction against immigration. It is a fine judgment. The British and, European and American governments are all clamping down to some degree.

The main intention of my post was to question the argument that (because of the rising dependency rate and slowing work force growth) workers will be able to call the shots in the future. With no change in policy, that argument is seriously flawed.

Tony Healy
Tony Healy
15 years ago

Nicholas, if our aim is to help other nations, then let’s do it properly, and let’s share the burden from consolidated taxes, rather than hitting particular occupations, especially the low-paid. Let’s import lots of economists, get rid of tenure at universities, abolish protections for the legal and accounting professions and so on. The fact that we don’t do that illustrates the problem in your approach.

Secondly, there is considerable debate as to whether guest worker programs are much use to sending countries. Naturally it seems obvious that the inflow of remittances must be beneficial, but in fact remittances are often too small to be socially useful, usually entrench existing inequality in villages, discourage the development of local industry (in the sending country) and steal valuable university educated professionals from poor areas.

Fred, I think there is no question that claims of greater worker power in the future are false. You’ve joined the dots.

Nicholas Gruen
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Nicholas Gruen(@nicholas-gruen)
15 years ago

Tony,

Australia allowing guest workers mightn’t do their host countries much good. It does THEM good – that’s what I was talking about. Regarding tenure at uni’s, we’ve effectively got rid of a lot of it. And yes, no problem with removing protections for various professions. Don’t underestimate the degree to which offshoring will hit the skilled – iot’s already done so in engineering of various kinds (particularly software engineering). But there are all those international business services firms – to the extent they’re not doing it now, they’ll be arbitraging their little heads off as this develops.

And Australia’s health system would be in a pretty bad way if we didn’t use foreign labour in our medical system.

Tony Healy
Tony Healy
15 years ago

I’m not entirely sure of your point but I think you’re presenting the offshoring of IT and business services as a counter to my point that law, accounting, professorships and the like are protected.

Software engineering is in fact a profession that enjoys none of the protections of the more traditional professions. That’s why it’s so vulnerable to the predations of Indian firms and dodgy recruiting businesses. So software engineering supports my point rather than counters it. That is, that the contract overseas labour business is dodgy.

Health is a special case and not part of the general concerns about contract overseas labour. That said, though, the poaching of nurses from countries like the Philippines is actually a serious issue for them. I think they lose half their trained staff to overseas countries.

Fred Argy
Fred Argy
15 years ago

Nicholas Tony has made a powerful argument for slowing down the guest worker surge.

Your point about the benefits of the program for guest workers themselves (if they are not exploited) must be weighed against all the risks and costs he and I mention (damage to the sender country, threat to our social cohesion, possible backlash against liberal reform, effect on the bargaining power of low to middle income workers etc.). Like everything in economics, it is an ‘on balance’ argument and one’s values come into it (much as you hate me saying this).

Fred Argy
Fred Argy
15 years ago

I should have added also that, as Tony has said, there are ways we can help poorer countries such as through foreign aid, technical support etc. where the cost is borne by taxpayers as a whole not just a few low income workers.

Nicholas Gruen
Admin
Nicholas Gruen(@nicholas-gruen)
15 years ago

Fred,

I’m all for you saying that it’s your values that decide. Further I think our values are pretty similar. There wouldn’t be much point in my arguing if I didn’t think we shared a sufficiently similar values base to make it worthwhile.

But there are so many issues and anxieties being bundled up in the discussion (not necessarily a criticism of anyone, but frustrating at my – and probably your end as well) that it’s hard to figure out what’s going on.

There’s doing good for countries, people, professional protection etc. Generally I’m against professional protection. I’m not too worried about foreign workers being ‘exploited’. One would want to deal with eggregious cases, but the rest is in eye of the beholder. If we’re happy that they want to be here and that basic human rights are not being compromised – such as basic safety at work – that’s a good start.

Fred worries about low skill workers, but a lot of the examples we’ve been talking about come from higher skill workers. But isn’t there something dodgy about this composite picture where wages will come under pressure in both skilled and unskilled areas and we think that that will somehow hurt us all? Well it’s true that the cost of both skilled and unskilled labour can both fall together but unless it all disappears in greater returns to capital, it will come through in lower prices. With returns to capital being a lot smaller part of the economy it’s hard to see it absorbing such a large share of the gains – leaving them to be shared through the workforce.

There’s also the question of the impact on poorer countries of a brain drain. (Note this suggests the exact opposite of your (Fred’s) concerns with impacts on unskilled labour in the country that taps into this labour market.) But, yes, I share your concern. I guess as a first cut I’d like to see it dealt with with aid of various kinds and perhaps a less vigorous attempt by developed countries such as Australia to actively poach skilled labour from countries that can ill afford the brain drain. But it would take a lot for me to accept that we should actively discourage such migration and guest workers.

Tony Healy
Tony Healy
15 years ago

Nicholas, it’s hard to figure out what’s going on because temporary skilled migration is a complex issue and a billion dollar business.

An important issue is that many of the temporary migrants are products rented out by businesses, rather than individuals migrating to Australia to gain a job. Those businesses are competing against the local workforce, rather than filling vacancies.

The Australian immigration system has a unique characteristic that facilitates this. We let labour hire firms sponsor visas in their own right. Other countries don’t do this; they restrict visas to actual end-employers since temporary skilled visas are meant to fill existing vacancies.

Nicholas Gruen
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Nicholas Gruen(@nicholas-gruen)
15 years ago

As you might expect Tony, I’m not too fussed about whether a firm is the direct agent involved in organising working visas. Not saying it’s better than the alternative, but it doesn’t look obviously worse to me. I’m still focused on the benefits and costs to individuals in the washup – not firms.

Tony Healy
Tony Healy
15 years ago

It’s actually one of the most important points in temporary skilled immigration.

Ken Parish
Admin
Ken Parish(@ken-parish)
15 years ago

I did a quick Google about 457 visas and came up with the following:

“I have a Temporary Business (Long Stay) 457 visa and my sponsor is a Labour Hire Firm. Have there been any changes to my 457 visa?

There have been no changes to the conditions and requirements of Temporary Business (Long Stay) 457 visa holders who are employed by labour firms. The 457 visa requires the visa holder’s sponsor to be the direct employer. This is not new. It has always been the requirement. The department has found, however, through our monitoring and other enquiries that some labour hire sponsors are not the direct employer. We have asked that these arrangements be rectified and that the direct employer be the sponsor.

Some characteristics of a direct employer include: provision of your work environment, tools and equipment; allocation and supervision of your work; occupational health and safety responsibilities (including Workcover); determining your salary, deducting your tax, making your superannuation contributions; determining your conditions of employment including your conditions of appointment and dismissal.

If your direct employer is not currently your sponsor, your employer has the option to apply to the nearest departmental business centre to be an approved sponsor and to nominate you as an employee for a skilled position within their business.”

Unless the above is just spin and window-dressing, it appears that sponsorship of 457 visa holders by labour hire firms who then rent them out to the direct employer is not in fact condoned officially, although equally obviously some labour hire firms have been rorting the system. Like Nicholas, I don’t have a problem with a third party hiring agent as long as a vacancy is a genuine one where there is a local skills shortage and the overseas employee is recruited to fill that vacancy and sponsored by that employer and not as a “gun for hire” by the labour hire firm.

On the issue of whether 457 visas are impacting the low paid, low skill workforce, the same website seems to suggest otherwise:

What is the minimum skill level?
The minimum skill level relates to occupations on a list (the SOL) of acceptable occupations. They reflect occupational groups 1-4 of the Australian Standard Classification of Occupations (2nd edition) publication produced by the Australian Bureau of Statistics (ABS). Major occupational groups in this range are:

managers and administrators,
professionals,
associate professionals, and
tradespersons and related workers.
Some occupations within the ASCO 1-4 range, such as Apprentice positions, have been omitted from the list and cannot be filled.

What is the minimum salary level?
The minimum salary level is based on the annual average salary for all Australians, as calculated by the Australian Bureau of Statistics (ABS).

The minimum salary level represents gross salary and cannot include salary packaged items, such as superannuation, vehicles, bonuses or other allowances.

Employees may be provided with other benefits but these will not count towards the calculation of remuneration for the purposes of the minimum salary level.

From 8 June 2005, immigration law has been amended to revise the minimum salary levels for positions nominated under subclass 457 (temporary business (long stay) visas). Positions in Information and Communications Technology occupations will now have to be paid a minimum of AUD $50,775, and all other occupations will now have to be paid a minimum of AUD $39,100.

Unless employers are breaking the law (which no doubt a small minority are), it does not appear that the 457 visa class would be having much effect on the low paid, low skill sector of the workforce. It seems rather that this visa scheme is directed at higher skilled areas, although it may well be that the effect of a minimum salary level for 457 recruits (which one would suspect will mostly be the actual salary level) equal to average Australian salaries would certainly be exerting downward pressure on wages in highly skilled areas where wages are typically higher than the overall Australian average.

The other interesting thing about the 457 visa (as far as I can see – I’ve only had a quick look at it) is that, unlike previous visa classes designed to allow employers to sponsor skilled employees to fill a particular vacancy, there does not appear to be any specific requirement that the employer must demonstrate that there is in fact a local shortage of employees in the desired occupation in that area. Under the previous available classes (under which my firm employed a couple of foreign lawyers during the late 1980s and beginning of the 90s

Fred Argy
Fred Argy
15 years ago

Thanks Ken. Very helpful and informative. It clears the air on many issues.

Tony Healy
Tony Healy
15 years ago

Duplicitous definition
———————–

Ken, you’ve have highlighted one of the many duplicities in this area. In immigration economics, when we talk about an employer we mean the company or organisation that actually wants a worker. This might be a factory, university, office or farm. Labour hire firms are simply the agent that procures the worker.

This is important because temporary skilled visas are meant to fill existing unfillable vacancies. Therefore anyone alleging a need for such a visa should have an unfilled vacancy. Only genuine employers have such vacancies.

This is where the Immigration Department (DIMA) has been creative. They’ve defined “employer” to mean any company that’s hired 10 or more staff, which is an administrative category that can include labour hire firms. So while labour hire firms satisfy this administrative definition, they are not the end employers of the workers.

The irregularities
——————

Regarding the irregularities referred to in the quote, they relate to activities where labour hire firms sought to shield themselves from penalties against non-compliers by using fourth parties to apply for the visas. Those fourth parties would then rent the workers to the labour hire firms, who would rent them to the true employers. In this way, any sanctions applied by DIMA would be borne by the disposable forth party company.

For some reason DIMA decided to clamp down on this in late 2003, prompting a furious response from the recruiting industry. In the end, the process of using fourth party firms was stopped, but labour hire firms were recognised as employers for the purpose of sponsoring visas. This process seemed to result from some political deal-making. It certainly isn’t an appropriate system.

Removal of market testing
————————-

You’re correct that earlier requirements for market testing have been completely removed. Employers or labour hire firms do not have to even pretend to find local workers before bringing in overseas workers. This and other changes have allowed labour hire firms to become direct competitors to the local workforce, rather than working as agents for them.

Minimum salaries
—————-

The specified minimum salaries are well below market rates for many jobs, so certainly do contribute to pushing down wages. There are other factors at work as well.

1. Outside the major capital cities, even lower salaries can be paid. (Adelaide is part of the region where lower minimum salaries apply.)

2. Many of the jobs are contract type work, which usually pays a slight premium to compensate for the risk. Australian contract workers know this and expect to receive their cut of the premium to compensate for their other costs. Overseas workers in low-skilled areas are happy to accept the already low annual salary, leaving much higher margins for the labour hire firm.

3. Labour hire firms operating in this market are typically vertically integrated, providing accomodation and other services to the overseas workers, often at inflated prices. Thus they capture back even more of the workers’ pay.

DIMA has a PR spin on this, where they point out that the average salary of 457 holders is $65,000. However that average includes the earnings of doctors and senior managers, who are legitimate users of the 457 visas.

All in all, this is a complicated issue where some “entrepreneurs” have seen the potential to make huge killings, but at significant long term cost to the local workforce. The Howard government has been happy to acquiesce as these arrangements reduce the influence of unions and improve company profits. The only people they hurt are Australian workers.

Tony Healy
Tony Healy
15 years ago

As with most trends, business use of temporary skilled visas reflects lessons lobbyists have learned from America. Here are some more features of the Australian temporary worker visa system.

No documentation
—————-

Australia requires only minimal documentation, and it’s not public. By comparison, America requires formal public statements of the role to be filled by a visa, along with the designated market wage that applies to such roles. This is still abused, but the existence of data lets interested parties check.

No penalties
————

Australia imposes no serious penalties for infringing immigration laws relating to skilled visas. The only penalties are suspension of visa sponsoring rights, which can be easily worked around. By comparison, there are fines up to $250,000 and ten years jail for equivalent offences in America, according to this news report.

A federal grand jury in May indicted Mandalapa, Cybersoftec’s president, on 29 counts of immigration fraud, money laundering and mail fraud in the U.S. District Court in Newark, N.J. He pleaded guilty in June to one count of filing a fraudulent immigration document in a plea bargain, and faces penalties of 10 years in jail and a $250,000 fine.

No quotas
———

Australia has no limits on temporary worker visas, whereas America limits them to 65,000 in the main (H1-B) category. An Australian equivalent of such a quota would be about 6,000 given the different population sizes.

Comment
——-

America’s skilled visa system is frequently criticised, with that criticism facilitated by mandated public records. Australia’s system has features worse than America’s but is little examined. One reason for this may be that the Australian system is opaque, and was probably designed that way.

Note that overseas discussion of Australia’s immigration system generally refers to our focus on skilled immigration in the permanent stream, which is contrasted with America’s open door policy. That’s a different subject than the operation of the temporary worker system.

Nicholas Gruen
Admin
Nicholas Gruen(@nicholas-gruen)
15 years ago

Tony,

The proposition that ‘the only people hurt are Australian workers’ is a lame slogan. Like Ken, I’d like to see much more put into training, but with or without that, the it’s quite clear that the effects of what you describe are going to be complex and there will be many benefits.

If we get workers in to fill some skill vacancies, I fully agree that there will be some spillovers which will damage the wage prospects of some workers. The growth generated will also benefit a lot of workers as well as the economy generally – in other words it’s very likely to generate more dollar gains than losses. Whether the distribution of the gains and losses is something that is attractive or not is a matter as Fred says of one’s values.

If I could be persuaded that it harmed poorer Australians disproportionately I’d be sympathetic to your argument. But then I’d only be considering the Australian workers’ preferences in this. What’s wrong with giving some weight to the wishes of the immigrants – they want to come here so you’ve got to imagine they’re benefiting. How do you weigh that up in your calculus?

Tony Healy
Tony Healy
15 years ago

Nicholas, overseas people would like a great many things. I’m sure many would like your house. That doesn’t mean you will give it to them.

The argument that something benefits overseas people should not cause us to ignore other effects. There are 6 billion people in the world and we can’t cater to everyone. That seems to be the basis of nation states and it’s probably a reasonable starting point.

In terms of following that argument further, we would need to ask why, if we’re going to help overseas people, we do so in an inefficent way with a lot of social equity problems. If we’re going to argue we’re doing it to help overseas people, then let’s do that properly and share the burden. Bringing in a few welders and fruit pickers is not the best way of helping people who need it. If we’re not examining what’s happening, then we can’t honestly hide behind that argument.

In administrative terms, a stated aim of Australian immigration policy is that it will benefit Australians (DIMA web site). I do not necessarily set much store by that aim, but if this policy is harming Australian workers, then clearly it’s not complying with the government’s own stated aim. And yes I know you would ask whether we’re talking about Australians as a whole or Australian workers. I query the standard rationalisations on that topic.

In terms of training, the danger of these programs is that they remove incentive for training, starting a self-reinforcing spiral. The software field provides a good test case of this. Offshoring and excessive use of 457 visas in that field have contributed to enrolments in IT courses declining by about 50 percent in the last four years.

Now, if we want to change the rules so that anyone can come to Australia, that’s fine by me. But let us be honest about that, plan for it properly and ensure everyone shares the burden.

If we really want to help overseas people, which would be a fantastic goal, then let’s do that properly too, instead of just using it as a justification for a labour hire protection racket.

Fernando Ortiz
4 years ago

I agree with the author with respect to, that we should have a less open door policy on immigration and put a greater focus on training and developing our own less skilled workers, with a view to them being employed – but I feel that a very flexible labour market, like what we had when Workchoices was in, was good for the overall well being of the country – on the condition that we retained a minimum wage that would be set by the government and reviewed annually.