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Scarce jobs: migrants or locals at the end of the job queue?

During this election campaign, the major parties have professed their concern about employment opportunities. The mantra is jobs, jobs, jobs. This is appropriate in a context where growth in the number…

Are working holidays makers taking away jobs and other visitors on short-term working visas from young locals? Andos/ElloShutterstock

During this election campaign, the major parties have professed their concern about employment opportunities. The mantra is jobs, jobs, jobs.

This is appropriate in a context where growth in the number of employed persons has fallen sharply, from 259,000 in the year to May 2011, to 171,600 in the year to May 2012 and 126,900 in the year to May 2013. According to Treasury forecasts, it will fall to around 110,000 in 2013-14, followed by a modest rise to around 150,000 in 2014-15.

In contrast, the Australian government’s permanent-entry migration program was set at the record high level of 214,000 for 2012-13 and is encouraging temporary migrants to work in Australia in unprecedented numbers.

There are almost no caps on the number of visas issued in these temporary visa subclasses and the desperation of people in job-scarce countries to access Australia’s labour market seems enormous. The number of working-holiday maker (WHM) visas issued has grown from 185,480 in 2010-11 to 249,231 in 2012-13.

As of March this year, there were 1.1 million temporary visa holders (not counting New Zealanders) in Australia, most of whom held work rights. This stock is growing rapidly, in part because of the ease with which temporary residents are permitted to switch to another visa.

The incompatibility of this migration policy stance with the stated concern about “jobs for locals” is jarring. This is because recently-arrived migrants (defined as those arriving in Australia since the beginning of 2011) are dominating the growth in the number of employed persons in Australia.

The key statistics are as follows. In the year to May 2013, there was an increase of 168,000 recently arrived overseas born migrants aged 15 plus in Australia. Of these, 108,200 were employed. This is almost as large as the 126,000 increase in employment in that year.

The migration surge would not be an issue if the local working age population was stable or shrinking as some commentators assert. But it is not. Their numbers are growing strongly.

It is young local workers who are the main losers in the competition for employment. This is especially the case for those without post-school education, who are seeking less skilled, entry-level jobs.

They encounter a weak labour market where a growing share of local workers in the 55 plus age category is staying in the workforce. For example, the share of those aged 60-64 in the workforce increased from 39% in May 2003 to 54% in May 2013. Young people also have to compete for less skilled entry level work with an increasing number of job hungry temporary migrants looking for the same work.

Currently, around 250,000 young people leave school and enter the workforce each year. This is about the same number of WHM visas issued in 2012-13. All these WHMs are aged 30 or less.

They include a new breed of WHM, primarily looking for work rather than a holiday supplemented by work. They include large numbers from Taiwan, Ireland and Italy, all leaving economies where employment is difficult to find.

The consequence is seriously high unemployment amongst locals aged 15-24 years (14.5% for 15-19 year olds and 9.5% for 20-24 year olds). In addition, there has been a persistent decline in the labour market participation rates of these cohorts since 2007 (from 59.4% in May 2007 to 54.1% in May 2013 for 15-19 year olds and from 81.3% to 78.1% over the same period for 20-24 year olds).

There has been a steady increase in the number of working holiday makers in Australia. AAP/Johnan Palsson

While it’s a good thing if they obtain valued skills, many are seeking refuge in low-level training courses because of lack of employment opportunities.

Not a word is being heard about these issues from the major political parties. The Coalition, at least, is not responsible, since it does not have its hands on the policy levers. But, it is proposing to make the situation much worse by extending work rights to overseas students who complete vocational training courses.

Our work on the issue has also shown that the official Labour Force Survey (LFS) from which most of the data reported above comes from, does not include many of the recently-arrived migrant groups under discussion (including the majority of the WHMs). The LFS only surveys migrants if they stay in Australia or are estimated to stay in Australia for 12 months of the 16 months after first arrival in Australia.

As a consequence, the LFS misses at least 500,000 recently-arrived migrants, of whom some 250,000 are likely to be employed. This finding does not significantly affect the conclusions reached regarding who is losing in the competition for employment.

However it does mean that policy elites and commentators alike, tend to underestimate the scale of the recent migrant challenge for local youth who are seeking employment.


This is an edited extract from the report, Scarce jobs: Migrants or locals at the end of the job queue?, which can be read online.

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8 Comments sorted by

  1. Dale Bloom

    Analyst

    According to this, Australian workers are working the lowest hours of work in 30 years.

    http://www.smh.com.au/national/parttime-trend-cuts-average-work-hours-20130125-2dc3n.html

    The decreasing hours of work are attributed to "part-time jobs, flexible working hours and casualisation of the workforce in a softening economy"

    Many Australians will find it very difficult to pay their bills if their hours of work are declining.

    To continue to bring in such high numbers of foreign workers in such circumstances is total lunacy on an unprecedented scale in Australia.

    report
  2. R. Ambrose Raven

    none

    All this talk about flexible labour practices/ labour productivity/ labour market reform is really code for sweatshops and coolie labour. Business (BIG and small) and the politicians they own all want large quantities of sweatshop labour, for which the interests of young citizens are entirely and absolutely expendable. 2013’s s457 visa controversy demonstrated the extent of that business greed.

    CFMEU in Jan '13 demanded that employers be granted the right to discriminate in favour of Australian…

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  3. Paul Prociv

    ex medical academic; botanical engineer at University of Queensland

    Yes, we have dug ourselves into quite a hole on this issue. From talking with various fruit and vegetable growers, I gain the impression that local young adults have excessive and unrealistic work expectations and find the physical labour involved in horticulture is beneath (or beyond) them. Add to that the Spartan conditions, usually in remote areas, and low pay, and you find that almost no locals will work in that industry, which is further complicated by its high seasonality. For many, it would also mean leaving the parental home, with all its comforts and economy.
    On the other hand, our politicians constantly extol the virtues of cheap food, conditioning us to expect it as a basic human right, without realising that somebody has to work bloody hard, and for long hours, to get it to our supermarkets.
    Foreign, casual workers are more than happy to live under the tough conditions, with poor (although, with their backgrounds, relatively generous) pay, to ensure we stay well-fed.

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    1. wilma western

      logged in via email @bigpond.com

      In reply to Paul Prociv

      But the foreign backpackers are not only working in horticulture;they're popping up at supermarket checkouts,at the deli counters,visitor information centres, roadhouses , fuel outlets, in cleaning jobs , you name it.

      Noticed a couple of Aboriginal trainees in a Kalgoorlie supermarket, but along the coast didn't see any. Anecdotal , but surely there's hard to- justify- preference for visa holders over locals going on here.

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  4. Stephen Powell

    Artist, Photographer at Stephen Powell Wildlfe Artist

    The spotlight on 'boat people' is a distraction from the flood arriving at our airports. We are being inundated by 'financial refugees' from every continent with Europe the biggest contributor. The results as you say is devastating for the young job seekers. Businesses take advantage and drive down wages to take advantage of the desperate. The wealthy also. I drove past a sprawling property with a large house just last week. A work group made up entirely of Asian workers trimming hedges and gardening. The wealthy get a cheep compliant workforce. When did the people of Australia decide to allow hundreds of thousands of people to flood the employment market? When did we decide that companies did not have to contribute to training of young Australians?
    The 500000 people also distort the property market making housing unfordable to young Australians.

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    1. Jeremy Culberg

      Electrical Asset Manager at Power Generation

      In reply to Stephen Powell

      To counter the criticism (and a mild counter it is), for many of the business owners I talked with, the biggest problem with putting on Australians in the country areas, is that once the apprenticeship / traineeship is complete, the young worker moves on to the major cities. Hence the preference to bring in a foreign worker, because at least the person will stay, as the visa conditions are more restrictive (no work, no visa . . .).
      That, and the comment that many Australians (particularly of west…

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  5. Andrew Smith

    Education Consultant at Australian & International Education Centre

    This article could have been more informative by asking fruit growers, tourism operators etc. their opinions, versus more urban myths.

    Much of the work backpackers do is temporary or casual, and the type of work many Australians cannot or will not do (while our population is ageing and in many regional centres declining).

    Many younger Australians have issues of Centrelink credits which limits amount of work before Newstart is reduced or stopped, not completing apprenticeships and too many simply…

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  6. Emma Tomkinson

    logged in via LinkedIn

    I'd be interested in any evidence that Aussie youth and working tourists are competing for the same jobs. In the full report, the example of accounting is given, but not the number of unemployed accountants, so it's hard to know if this is a problem or not.

    We need to know the extent that Aussie youth and working tourists are directly competing for jobs to understand if this is a problem or not. We certainly don't want unemployed young people and a whole heap of unfilled vacancies they're not…

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