immigration used to suppress wages

http://www.theage.com.au/news/national/expert-warns-on-visa-loophole/2006/07/21/1153166587321.html#

Expert warns on visa loophole
Michael Bachelard
July 22, 2006

BUSINESSES that hire skilled guest workers from overseas should have to pay them market rates, one industry expert says, as concerns grow that temporary visas are being used to undercut Australian pay rates.

Information technology expert Bob Kinnaird said a visa used to bring workers into Australia for up to four years had "been tilted too far" towards the convenience of administrators and away from "fairness to Australian residents".

Writing in Monash University's People and Place, Mr Kinnaird said that about 30 per cent of all subclass 457 visas issued between November 2003 and June 2005 took advantage of a feature of the law that allows employers to pay less than the required salary if they are in regional areas.

People and Place, published by the university's Centre for Population and Urban Research, covers migration patterns, the labour market and urban growth.

In the IT industry, in which thousands of workers on 457 visas are employed in Australia each year, nearly 20 per cent of visas issued in 2004 were for jobs at or below the median starting salary for new computer science graduates of $38,000.

Almost a third of visa holders were paid at or less than the minimum specified by law. At the time, this was $46,620 for IT workers.

Indian workers, a dominant force in IT, had salaries approved by the Immigration Department that were "typically much lower than for other nationals".

In the four years to 2004-05, the number of 457 visas issued to Indians in IT "grew by nearly 90 per cent, while visas for other nationals fell by 14 per cent", Mr Kinnaird said.

Unions and the Labor Party have also criticised the visa system. They say the Government is using it, along with WorkChoices laws, to put a lid on wages.

The visa is often touted as a way to address skill shortages.

But Mr Kinnaird said employers could sponsor migrants without proving there was a skills shortage in the field.

He said it was surprising that the Government did not make employers pay 457 visa holders at market rates, "in line with free market and competition principles". "The visa is, in effect, giving these businesses an unfair competitive advantage over other employers, and is effectively a form of government subsidy," Mr Kinnaird said.

Next year, there are likely to be more temporary migrants approved for entry to Australia under 457 visas than there are skilled permanent visas granted.

Mr Kinnaird said the visa's use damaged employment and training opportunities for Australians: since 2001, the proportion of computer science graduates unable to find full-time work had been at record or near-record levels, and enrolments by Australian students in university IT courses had plummeted.

Mr Kinnaird said the Immigration Department should do "labour market testing" to find out if businesses needed to import skills. It also should monitor sponsoring businesses more closely.