Why we should welcome migrant workers - The Centre for Independent Studies
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Why we should welcome migrant workers

For a nation with such a high percentage of migrants, Australia’s relationship with migration remains very fraught. Of course, we don’t have to go too far back into history to find examples of flashpoints over migration (legal and illegal): from Julia Gillard’s border crisis to the Tampa, and back further to far darker times of White Australia.

At the moment, we are seeing attempts by people on both sides of politics to blame migration for high house prices, rather than acknowledging that the negative impact of supply side restrictions significantly outweighs the effects of migration on housing affordability.

Voices speaking out about the benefits of migration seem few and far between at times. It is against this background that we must assess reports this week that the government will soon make large scale reforms to our migration employment system.

According to these reports, the system will be reoriented to impose a significant regulatory burden on those seeking to employ lower-paid migrants, while those offering higher salaries will have a lower burden. In addition, migrant workers will have greater rights to switch employers and access to temporary visas if they become unemployed or wish to lodge a workplace complaint.

The government, perhaps believing this to be a virtue, argues that the system will shrink the overall level of migration. However, the big risk is that the new system will become even harder to negotiate for businesses  facing genuine skill shortages.

Given the current historically low unemployment rate, and high demands for skilled labour, it seems odd for a government to set out to lower the immigration intake.

Of course, unions have long wanted to curtail migration numbers to force businesses to hire domestic workers — regardless of the cost or availability issues — and they clearly have a significant sway over the government’s agenda.

So while the government may not accept the union recommendation to set access to the streamlined pathway at a salary of $200,000 or more, unions will be pleased they are to take a more central role in monitoring conditions for lower skilled migrants.

Unsurprisingly, businesses — especially in regional areas — have come out against much of the plan, arguing the new system will raise costs and rob employers of certainty.

While there is some merit to the complaints by business, in other areas their complaints are purely self-serving; especially those aimed at limiting options for migrants through effectively coercive visa conditions or clamouring for unfettered access to cheap labour.

While migration may lower wages for some jobs in some industries (and the evidence on this is actually quite mixed), it is important that this arises because of increased efficiency and competition in the job market.

As is the case in so many different markets, if some jobs in Australia pay above international average wages for those roles, they should attract skilled foreign workers. This influx of workers will lower wages.

Conversely, where jobs in Australia have remuneration below the level on offer in other countries, we can expect skilled Australian workers to emigrate. This outflow has the opposite effect to the one above, with relative scarcity raising wage demands.

This kind of competition for skills is actually beneficial to Australia, and we would be wise to put as few barriers in front of it as we can.

But this is different to arguing the main purpose of the migration system is to provide businesses with low-cost, foreign labour. This is especially the case where migrant workers are forced to undertake unattractive jobs to qualify for a visa or where overly restrictive visa conditions make it difficult for workers to leave jobs or bargain on wages.

And we absolutely should never tolerate those abusing the system, be they dodgy businesses or ‘students’ effectively studying a degree in gaining Australian residency. And it is not ok for anyone to rip foreign workers off on wages they have fairly earned.

But surely the supposed aims of protecting migrant workers and encouraging flexibility would be far better achieved by pairing streamlined and cheaper visa processes with fewer restrictions on the visas granted.

For example, if the reason migrant workers are being exploited is because they are trapped by their visa conditions to stay with their employer, why isn’t removing those restrictive conditions enough? Why do you also need more red tape and union participation and oversight?

On the other hand, if businesses are worried about being out-of-pocket when migrant workers change employers soon after coming into the country, why not lower those upfront costs? Why keep restrictive visa conditions that allow those businesses to offer below market rates of pay — which they must be doing if workers would jump ship immediately?

Instead, the government’s big initiative seems to be allowing unions to clip the ticket on the way through, with additional costs flowing through to businesses. It’s another step in the government’s likely futile attempt to re-centre unions in our industrial relations system.

Unfortunately, there is no reason to think a highly bureaucratic migration system, festooned with union representation, will contribute to the overarching imperative of improving the efficiency of the labour markets. Traditionally, unions prefer as closed a shop as possible to minimise competition.

Too often it seems this government’s ‘reform’ is not about improving outcomes or efficiency  but simply altering which set of vested interests benefits — usually in favour of Labor-aligned interests like unions.

There are steps the government could take to improve how the migration system worked so it was more efficient and delivered better outcomes for migrants and the country. However, it seems the aim is simply to shift benefits from one vested interest (business) to another (unions).

Such changes deserve opprobrium, rather than the label of reform.

Simon Cowan is Research Director at the Centre for Independent Studies.