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No, Immigration Is Not Driving Down Wages in Australia

The Australian Labor Party’s Kristina Keneally is using the lockdown to call for a reduction in immigration once borders reopen, citing the nativist trope that migrant workers are driving down wages. But it's not immigrants that have driven down Australian workers' wages — it's the Labor Party's own history of neoliberal policies.

Australian Senate, Parliament of Australia, Canberra, Australia, 2012. JJ Harrison / Wikimedia

Australia has always relied on high levels of immigration to, among other things, fuel its economic growth. At the same time, immigrants have been an easy scapegoat to blame for the woes of the nation — especially during times of crisis.

The Australian Labor Party (ALP) has a dishonorable history in this context, with figures in the party routinely borrowing from the Right’s dog-whistle tactics and calling for nativist solutions. The latest instance comes from the ALP’s Kristina Keneally, the Shadow Minister for Immigration and Citizenship. In an opinion piece for the Sydney Morning Herald this week, she argued that the pandemic and its lockdown provide the ideal opportunity to put a curb on immigration. “Do we want migrants to return to Australia in the same numbers and in the same composition as before the crisis?” she asks. The answer, she tells us, “should be no.”

Keneally’s attack is specifically targeted at temporary migrants, or guest workers, who she accuses both of driving down wages and of depriving Australians of their rightful “fair go and a first go” at jobs. She even admiringly cites Boris Johnson’s restrictions to low-skilled migration in the United Kingdom, as a model for what Australia could achieve with the right intent.

It’s not the first time Keneally has reached for such arguments. More concerning still, is the way that Keneally’s comments have been defended by prominent figures in her own party, including the secretary of the Australian Council of Trade Unions, Sally McManus, who tweeted that “too many employers had been using the temp visa system to avoid hiring locals.” Penny Wong, the Labor Leader of the Opposition in the Senate, appeared on television to defend Keneally, though she combined her verdict on migration’s negative effect on wages with supposed concern for the exploitation of migrants.

The argument that migration — temporary or permanent — undermines wages for native-born Australians is commonly reached for by politicians on both sides of the House, but is nonetheless baseless. No credible study has been able to demonstrate any substantial link between migration and falling wages.

What is remarkably, undeniably, caught-with-the-knife-in-your-bloody-hands clear is the connection between Labor Party policy and wage stagnation since the 1980s.

Shoppies Drive Down Wages

For Australians under forty, it’s been a standard feature of working life that real wages decline while corporate profits rise. In fact, this lopsided arrangement was the gift to a new generation from the Labor Party in the 1980s. It was the Hawke government’s creation of the Prices and Incomes Accord in 1983 that led to the neoliberal restructuring of the economy that we’re all toiling in today. It was thanks to the party’s close relationship with what was, at the time, a strong union movement, that a Labor government was able to usher in these changes far more smoothly than Thatcher was ever able to do in the United Kingdom.

But more recent conspiracies are at hand. The Shop, Distributive and Allied Employees Association (the SDA) is one of the main Labor Party factions. It has arch-conservative politics, and an extremely cozy relationship with the supermarket duopoly and almost all of the major retail and fast food employers in the country.

The relationship works like this: the SDA helps to reduce working conditions in the big chains, and the big chains let the SDA recruit at their stores. The more members the SDA has, the more powerful it is at Labor Party conferences. Everyone (except the workers) wins.

Since the Labor Party created Fair Work Australia (now the Fair Work Commission) in 2009, the SDA has developed countless industrial agreements with employers that undermine the legal minimum wage and conditions. These dodgy agreements cost hundreds of thousands of young people billions of dollars in lost wages. Against the backdrop of these backroom deals, in 2013, the then–Labor Workplace Relations minister, Bill Shorten, proposed that the Fair Work Commission review penalty rates.

By the time these dodgy deals were exposed in 2015–6, thanks to fighting unionists from the Retail and Fast Food Workers Union, they’d already served their purpose: conditions in the industry had been reduced across the board. The Commission deemed the Award wages too high, and cut penalty rates for all retail workers in 2017.

If Keneally is set on finding a small group of people responsible for a detrimental effect on the wages of millions of workers, she needn’t have looked any further than her own comrades.

Crocodile Tears

A huge percentage of the “temporary migrants” Keneally is trying to turn us against are international students. These students can only legally work forty hours a fortnight. Unscrupulous employers often underpay these workers, forcing them to work more than technically allowed. Once this happens, reporting the underpayment to any authority becomes a one-way ticket to deportation. The 7-Eleven scandal, in which a majority of stores in the country were found to be drastically underpaying wages (many were working twenty-hour shifts for as little as $3 an hour) proved that thousands of these workers have labored in horrific conditions over years. Many undoubtedly still do.

When that scandal broke in 2015, Labor’s response then was more or less the same as Keneally’s comments this week. Labor Senator Deborah O’Neill — an SDA faction member — argued that vulnerable and exploited students had clearly broken the law, and that the issue was driving down wages across the board and needed “further investigation.”

But despite their current crocodile tears over the exploitation of migrant workers, at its national party conference in 2018 Labor voted against a deportation amnesty for workers who report wage theft.

The simple removal of the forty-hour-fortnight condition would put an end to the two-tier system once and for all. But the Labor Party has shown no interest in doing so, neither during its years in power last decade, nor in opposition since.

The Good Fight

Stagnant wage growth is real. And there’s no shortage of pro-worker proposals to deal with it. Research released by the Australia Institute’s Centre for Future Work last year showed that wages could be boosted by $10 billion a year for 3.3 million workers through three simple measures:

  • reversing the penalty rate cuts in retail and hospitality
  • raising the minimum wage to a living wage
  • removing the Commonwealth government’s cap on wage increases for its own employees

But if history has shown us anything, it’s that these kinds of ideas — hardly revolutionary — will not make it into reality unless bold unions fight to take them there. Keneally and co.’s divisive racism is the enemy of that good fight.