The impact of border closures will further complicate Australia’s economic recovery from the pandemic by hitting some of Australia’s most important industries — and potentially helping wages growth.
Data from nearly 65,000 temporary work visa holders in Australia at the end of December shows that, after the general “professional” and “other” employment categories, the accommodation and food services sector was the biggest user of temporary workers, with chefs and cooks the two biggest visa occupations, and cafe or restaurant managers the sixth biggest.
Cafes and restaurants are currently confined to take away and look unlikely to reopen for dine-in meals until the second half of the year, but will have to rely on local staff once they do.
IT-related roles such as software engineers occupied the other three of the top five occupations. IT-related roles also formed three of the top five approved visa applications for the six months to December. Australian IT companies have long relied heavily on the former 457 visa program and its successor temporary work visa programs for staff, insisting they were unable to find Australian graduates with appropriate skills.
IT-related visa holders are particularly dominant in NSW and Victoria, with other states more likely to have medical professionals at the top of the list of visa holders or, in Western Australia, mining-related occupations. Medical professionals, such as resident medical officers and general practitioners, are seventh and tenth on the list of occupations of visa holders across Australia.
India and the United Kingdom are by far the biggest current sources of temporary workers, and with the Philippines, provide over 40% of temporary workers.
Border closures will also severely limit foreign student numbers (and Australia’s failure to support foreign students during the pandemic won’t help). That will undercut the supply of labour for the retail sector and cafe and restaurant sector, where foreign students have provided a readily exploitable source of labour for industry-wide wage theft. Another epicentre of industrial-scale wage theft, horticulture, will also be hard-hit by border restrictions.
With a considerable proportion of 65,000 temporary visa holders, and hundreds of thousands of foreign students, removed from the employment pool, employers in affected industries will need to attract Australian workers. In some sectors, such as hospitality, high unemployment will prevent any impact on wages growth, which is likely to collapse as unemployment surges.
But in more specialist industries such as IT, health and mining, pressure on wages is likely to grow as employers look for appropriately skilled staff from the ranks of locals. Health and social care has for much of the period of wage stagnation been the sector with strongest wages growth, and that doesn’t look likely to change any time soon.
And if borders remain closed, IT companies may discover that years of failing to invest in training for Australian workers will come back to haunt them.
No wonder business lobby groups and mining peak bodies have recently called for industrial relations deregulation to enable them to put further downward pressure on wages. Watch out for pressure to ease border restrictions in order to allow more temporary workers back in, to accomplish the same goal.
Wage bubble aka wage justice?
Time to send the unemployed to the areas they need workers instead of letting them sit idle in high unemployment levels
457 visas in IT particularly have been used largely to keep wages down and avoid training up locals. I’ve worked on a few large projects where these specialist roles that couldn’t be sourced locally, cough, barely required graduate skills. Graduates of IT have been large in numbers but they often don’t get a job in industry because the entry level jobs are taken by visa holders.
There is a large body of evidence suggesting that these visas are mostly used to suppress wage demands and avoid training, much as they were when very big employers decided to cut their apprenticeships and then had to import boilermakers, or god forbid, chefs and cooks, tilers, roofers, plumbers, the lot.
When will the Business “Leaders” finally learn the value of sustainable practices. Engineering is suffering from similar attacks, first it was outsourcing of engineering expertise from the large manufacturing and processing companies. The argument being that we (the company) produce XYZ not do engineering as our core business. Now the outsourced engineering firms are using “Value Add Engineering Centers” in Asia to deliver engineering that was once done in Australia.
Even Assistant Minister for Immigration Michaelia Cash agrees that business certainly cheated on s457 visas at least until the peak of the mining “boom”: “… the 457 visa programme expanded rapidly from 68,400 primary visa holders in Australia in June 2010 to over 110,000 … in September 2013 … Much of this growth occurred in occupations not known to be in widespread shortage – moreover this rapid increase occurred during a period when growth in the economy was slowing.” Yet Gillard Labor’s 2013 effort to rein in the abuses was savagely attacked by the sweatshoppers and Liberal politicians.
It has been said that “Actually might be easier for our Aussie kids to get an Aussie IT job if they first migrate to UK, India or E. Europe and then apply for a 457 – it’s just a rubber stamp as long as you have a “letter” from your overseas employer and a “sponsor” here that’s all you need, and don’t worry, the Department won’t check the authenticity of your o’seas reference. But for Aussies applying for IT jobs there are numerous checks – multiple phone calls to previous employers & managers, reference checks, criminal record checks, credit checks etc etc.
We could only benefit from limitations on visa workers. But observe the silence from unions and the labor Party too on any such prospect – they have sold out too completely, for too much personal benefit, and for too long.