This article is basically to support the return of foreigners pmets n SHITCAs etc. This is where singkies r most discriminated. But of course Nothing said as the gahmen n companies benefit from the flood gates being opened.
Even kangaroo land has as admitted that foreigners depressed wages
Why closed borders mean you may finally get a bigger pay rise
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A woman walks away from newspaper jobs in a rubbish bin
With international borders closed, will the bargaining power of Australian workers increase?( ABC Western Qld: Damien Lakrins, File Photo )
Have a think about this.
The size of Australia's "labour force" is roughly 13.8 million people.
That's the pool of workers in the economy.
Now, imagine it can't grow quickly.
It can only grow slowly as babies are born, and with very low levels of immigration.
In such a scenario, if there's a shortage of skills in the economy, workers with those skills will become more valuable.
If employers want to hire them, those workers will have more "bargaining power" and can demand higher wages.
And if the economy starts growing strongly and unemployment rates decline across a range of industries, the bargaining power of lots of workers will increase.
Eventually, employers will have no choice but to pay higher wages to lots of people.
If you were an employer, what would you do in that situation?
Ask the government to increase the supply of labour
One solution would be to lobby the government to allow much higher levels of immigration.
That way, the labour supply would increase by a lot, giving you more workers to choose from.
And you'd want those higher levels of immigration to remain in place. Year after year.
Net overseas migration and population growth
The components of Australia's population growth, by calendar year, from 1981 to 2018.( Scanlon Foundation Research Institute; Bureau Of Statistics )
If that occurred, it would remove wage pressures from the economy.
Why? Because with hundreds of thousands of new workers joining the labour force every year, the bargaining power of existing workers would diminish.
It would stop skills shortages occurring, too.
Australia experienced something like this
The above scenario is simplistic.
But it matches the broad outline of what happened in Australia's economy over the last thirty years.
See the graph above, from the Scanlon Foundation Research Institute.
In the early 2000s, the Howard Government began sharply increasing Australia's immigration intake, and the higher levels of immigration were maintained by subsequent Labor and Coalition governments.
The size of the labour force expanded by 46 per cent in 20 years, from 9.4 million in January 2000 to 13.7 million in January last year.
Over the same period, Australia's population grew by roughly 30 per cent, so the labour force increased at a faster rate.
It was accompanied by a change in the composition of Australia's immigration program, away from permanent migration towards temporary migration.
"The overall effect was to integrate much of the Australian labour market into a global labour market for the first time," says economics Professor Ross Garnaut in his latest book.
"Integration into a global labour market held down wages during the resources boom, [but] it contributed to persistent unemployment, rising underemployment and stagnant real wages during the expansion of total economic activity [between 2013 and 2020]."
We could be embarking on an experiment
However, Australia is at a crossroads now.
International borders were closed last year during the lockdowns and they haven't reopened.
That's had a huge impact on immigration.
Between April 1 and September 30 last year, net overseas migration to Australia declined by 41,815 people, meaning more people left the country than arrived here.
With migration disappearing, Australia's population grew by just 23,919 people over the period.
It begs the question: what will happen if borders remain closed for a couple of years?
According to Commonwealth Bank's head of Australian economics, Gareth Aird, it could see wages start to grow.
With borders closed, the labour supply can't grow as quickly
In a note to clients last week, Mr Aird explained why.
He said before 2020, Australia's economic policy settings were suppressing wages and our historically-high levels of immigration had something to do with it.
"Pre-COVID, Australia had for many years run a very high immigration intake by OECD standards and this meant strong population growth," he said.
"Australia had a high level of immigration despite low wages growth and a relatively high level of underutilisation (the broadest measure of labour market slack)."
He said Australia was accepting higher-than-necessary levels of skilled migration too, which contributed to the weakness in wages.
"'Skilled' migration was worth around 70 per cent of the total migration programme outcome pre-COVID," he said.
"In industries with skills shortages, bargaining power between the employee and employer should move more favourably in the direction of the employee and higher wages should be forthcoming.
"But in Australia's case pre-COVID there was no evidence of widespread skills shortages based on the broad-based weakness in wages growth.
"The relatively high intake of skilled workers looked to be a pre-emptive strike on the expectation there would be skills shortages in the future."
However, Mr Aird said now that migration had disappeared, the bargaining power of workers should start increasing.
"If firms are not able to recruit from abroad then, as the labour market tightens, skills shortages will manifest themselves faster than otherwise and this will allow some workers to push for higher pay," he said.
However, it depends on borders remaining closed
Mr Aird said things were "very different right now" with the international borders closed.
He suspected the labour market would improve reasonably quickly from here and has forecast an unemployment rate of 5 per cent by the end of 2022 (it's currently 5.8 per cent).
However, he said there was a lot of uncertainty around when the international borders would reopen and what that would mean for the migration program and how it would impact wages around the country.
"We do not have all the answers," Mr Aird told his clients.
"We will continue to retain an open mind to how the economy may evolve over the next few years.
"And we would not be surprised to see some skills shortages manifest themselves as the labour market tightens, in the form of pockets of wages growth," he said.
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