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Treasury propaganda denies immigration lowers wages

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By Leith van Onselen

Back in April, the Australian Treasury and the Department of Home Affairs released a joint propaganda report, Shaping a Nation, spruiking mass immigration and a ‘Big Australia’, which was widely debunked by economists.

Today, The Australian’s Higher Education Editor, Tim Dodd, has used this report to argue that immigration is not lowering Australian wages growth:

Five out of six international students do not remain in Australia but leave for opportunities elsewhere, according to official visa data.

The figures, published by the federal government earlier this year, also cite several studies of census and other data that found workers from overseas have no negative impact on employment or wage levels in Australia, including among youth and the low skilled…

In the run-up to this weekend’s Super Saturday by-elections, federal Labor has tried to tap into fear about international students taking jobs…

Mr O’Connor said that given the massive growth in international student visas it was clear “there are circumstances where people are coming only to work”.

“Why do we allow the overuse and abuse when we know youth unemployment is more than 11 per cent?” he asked.

Tim Dodd needs to take a long hard look at the evidence.

Even Treasury’s propaganda report admitted that most new jobs created in Australia have gone to migrants:

Recent migrants accounted for two-thirds (64.5 per cent) of the approximately 850,000 net jobs created in the past five years. For full-time employment, the impact is even more pronounced, with recent migrants accounting for 72.4 per cent of new jobs created.

Various Productivity Commission modelling has also shown that immigration lowers the wages of incumbent workers (see here). These  results were confirmed recently by modelling from Victoria University (see here). Several notable Australian economists have noted similar.

International analysis from the Bank of England and Cambridge University also shows that immigration reduces wages growth (see here).

The economics is simple: continually increasing labour supply via immigration necessarily reduces workers’ bargaining power and ergo wages growth.

Earlier this month, Dr Bob Birrell from Australian Population Research Institute argued that the ballooning number of foreign students “gaming” Australia’s immigration system are locking younger Australians out of the jobs market (see here).

It’s not hard to see why. As reported by MB over many years, foreign students are at the pointy end of the systemic wages fraud that has taken place, including:

  • For years we have seen Dominos, Caltex, 7-Eleven, Woolworths and many other fast food franchises busted for rorting migrant labour.
  • The issue culminated in 2016 when the Senate Education and Employment References Committee released a scathing report entitled A National Disgrace: The Exploitation of Temporary Work Visa Holders, which documented systemic abuses of Australia’s temporary visa system for foreign workers.
  • Mid last year, ABC’s 7.30 Report ran a disturbing expose on the modern day slavery occurring across Australia.
  • Meanwhile, Fair Work Ombudsman (FWO), Natalie James, told Fairfax in August last year that people on visas continue to be exploited at an alarming rate, particularly those with limited English-language skills. It was also revealed that foreign workers are involved in more than three-quarters of legal cases initiated by the FWO against unscrupulous employers.
  • Then The ABC reported that Australia’s horticulture industry is at the centre of yet another migrant slave scandal, according to an Australian Parliamentary Inquiry into the issue.
  • The same Parliamentary Inquiry was told by an undercover Malaysian journalist that foreign workers in Victoria were “brainwashed” and trapped in debt to keep them on farms.
  • A recent UNSW Sydney and UTS survey painted the most damning picture of all, reporting that wages theft is endemic among international students, backpackers and other temporary migrants.
  • A few months ago, Fair Work warned that most of Western Sydney had become a virtual special economic zone in which two-thirds of businesses were underpaying workers, with the worst offenders being high-migrant areas.
  • Dr Bob Birrell from the Australian Population Research Institute latest report, based on 2016 Census data, revealed that most recently arrived skilled migrants (i.e. arrived between 2011 and 2016) cannot find professional jobs, with only 24% of skilled migrants from Non-English-Speaking-Countries (who comprise 84% of the total skilled migrant intake) employed as professionals as of 2016, compared with 50% of skilled migrants from Main English-Speaking-Countries and 58% of the same aged Australian-born graduates. These results accord with a recent survey from the Bankwest Curtin Economics Centre, which found that 53% of skilled migrants in Western Australia said they are working in lower skilled jobs than before they arrived, with underemployment also rife.
  • The Australian Bureau of Statistics (ABS) latest Characteristics of Recent Migrants report, revealed that migrants have generally worse labour market outcomes than the Australian born population, with recent migrants and temporary residents having an unemployment rate of 7.4% versus 5.4% for the Australian born population, and lower labour force participation (69.8%) than the Australian born population (70.2%).
  • ABC Radio recently highlighted the absurdity of Australia’s ‘skilled’ migration program in which skilled migrants have grown increasingly frustrated at not being able to gain work in Australia despite leaving their homelands to fill so-called ‘skills shortages’. As a result, they are now demanding that taxpayers provide government-sponsored internships to help skilled migrants gain local experience, and a chance to work in their chosen field.
  • In early 2018 the senate launched the”The operation and effectiveness of the Franchising Code of Conduct” owing in part to systematic abuse of migrant labour.
  • Then there is new research from the University of Sydney documenting the complete corruption of the temporary visas system, and arguing that Australia running a “de-facto low-skilled immigration policy” (also discussed here at the ABC).
  • In late June the government released new laws to combat modern slavery which, bizarrely, imposed zero punishment for enslaving coolies.
  • Over the past few weeks we’ve witnessed widespread visa rorting across cafes and restaurants, including among high end establishments like the Rockpool Group.

Clearly, young Australians are being crushed by increased competition for jobs, lower wages, as well as upward pressure on house prices in the migrant hotspots of Sydney and Melbourne. Meanwhile, the rest of us living in the major cities are suffering from worsening congestion, ever-rising infrastructure charges, and declining liveability as the population swells year after year.

The reality is that Australia’s education system has become an integral part of the immigration industry and Australia’s population ponzi – effectively a way for foreigners to buy backdoor permanent residency to Australia.

Dr Jenny Stewart, Honorary Professor of Public Policy at the University of New South Wales, drew the direct link between permanent residency and foreign student demand in her excellent article Hooked on Students:

If you work in a university, you cannot help but be aware of the extent to which universities are dependent upon income from international undergraduate students. Many of us working in the sector realised that it was not for any intellectual brilliance on our part that the students came, but because for many, coming to Australia as a student was a significant step on the path to becoming an Australian resident…

What do these undergraduate students do once they have completed their qualification? Many, understandably, wish to remain in Australia…

With appropriate advice and support and the necessary persistence, it would seem to be possible for just about any international student who is a graduate of an Australian university to become, eventually, a permanent resident…

 

We need to switch the education sector from citizenship to pedagogical exports. If permanent migration is capped, many more students will go home. The economy will adjust quickly with lower house prices and a lower Australian dollar. Thus the students will still come in droves for the value offered in Australian degree but without being so detrimental to wages, house prices and crush-loaded public services.

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