MBIE is consulting on whether to continue to include “Chefs” in the category of “Essential Skills” that allow employers to bring staff in from overseas on temporary work visas for up to five years.
Andrew Little got into trouble recently for questioning whether this was a category of labour that was genuinely in short supply. He was made to appear as if he was against migrant workers coming to New Zealand.
Chefs have been one of the largest groups receiving these essential skills visas. There were 7000 visas issued in the last two years alone. In the 2013 census there were only 16,218 people employed as chefs in New Zealand so the annual intake is about 20% of the total!
The top ten skilled migrant categories are chefs, dairy cattle farmer, cafe/restaurant manager, retail manager, carpenter, dairy cattle farm worker, retail supervisor, aged or disabled carer, truck driver, registered nurse (aged care).
Most of these aren’t what would be considered necessarily highly skilled jobs. Most of them we should be expecting that training is made available to young school leavers to train for and be able to fill these sorts of jobs. I believe all school leavers should be guaranteed a job or training. That is a legitimate demand that can and should be made by the labour movement in this country.
The real problem is that there is a gigantic scam being perpetrated on the country by big business and their governments. This involves issuing tens of thousands of temporary work and student visas each year in the full knowledge that they are creating a massive pool of vulnerable and easily exploitable labour.
There are at least 150,000 people here working on some sort of temporary visa at any one time. Many of these workers are in very vulnerable positions. There are about 30,000 workers on essential skills visas. Around 30,000 of those on student visas are working. There are 30,000 on working holiday visas. Another 30,000 people have work visas as spouses of those on a skilled work or student visa. Study to work visas account for 15,000 and 10,000 mainly Pacific workers are in horticulture and viticulture.
In the 2014/15 year MBIE issued 170,814 temporary work visas as well as 84,856 student visas.
Some industries including hospitality, dairy farming and aged care have come to be permanently dependent on workers on temporary visas.
Companies that Unite Union represents staff in including tourist hotels and fast food, the bosses confessed that 30 to 40 percent of their staff were on temporary visas.
One of the reasons used to justify bringing in labour from overseas is the alleged urgent skills’ shortage. If there was such a shortage it would be reflected in rising wages for the industry or occupations concerned.
With this fact in mind I thought it useful to look at the wages being paid to chefs. The Restaurant Association of New Zealand used to produce an annual report but this was discontinued in 2013. The data I have goes back to 2007.
If we compare the rates being paid chefs in 2007 and 2013 we see that there was a real wage decline for every category over those years. The rates paid in the surveys of April 2007 and April 2013. I then adjust the 2007 rate by the 16% inflation that occurred over those years and find the rate should have been significantly higher just to match price increases. Real wages had declined. The minimum wage increased 22% over the same period.
Occasionally, Unite gets consulted by MBIE over whether a particular company’s application for the right to bring in labour from overseas should be approved. In November 2014, we got one about the SkyCity Casino. It seems they wanted to bring in about 40 chefs of various sorts. I assume SkyCity, too, are claiming they can’t find people in New Zealand to do this work. Fourteen of the positions were for commis chefs, a junior position that SkyCity they currently pay $16.49 an hour for – only $1.08 more than the minimum wage.
The hotel and hospitality sector was turned into a minimum wage industry not by importing migrants but by destroying unions in that sector in the 1990s under the Employment Contracts Act. It is a fact, however, that the industry would not have been able to keep it at minimum wage when unemployment began to drop again in the late 1990s and early 2000s had it not been able to use temporary migrants.
It is also simply a fact that the free availability of vulnerable migrant workers is used to push down wages and conditions in the industries they work in.
So if you hear anyone from the tourism, hotel and hospitality sector complain about the lack of skilled staff, they need to be told to start training staff and paying wages that will make that job worth doing.
It is also the entire dairy farm sector which claims it can’t survive without recruiting labour from the Philippines – even when dairy prices were at record levels. The dairy farm owners through their associations are strong advocates of letting the free market work when it is to their advantage. But when it came to having to pay higher market prices to attract labour to work on their farms in Southland, they got the government to allow them to recruit in the Philippines instead.
Employers always argue that they need to have the complete freedom to import labour at will. At the moment, tourism operators are screaming that they need more temporary workers and the government should allow more in. In an article in the New Zealand Herald on November 10, 2014, headlined “Foreign worker limits ‘choking tourism’” industry bosses complained that New Zealand workers didn’t want to go and work in the regions. The general manager of Goldridge Resort, Penny Clark, “said the ‘ideal’ of having Kiwis filling housekeeping or hospitality roles didn’t fit reality.”
Of course, there is a simple answer to the problem of a labour shortage in places like Queenstown – pay better wages to attract the staff. When the market doesn’t respond to the price being offered – raise the price. It never seems to occur to the business operators that paying the minimum wage for work that can be very heavy and skilled like housekeeping and hospitality, located in parts of the country that are extremely expensive to live like Queenstown, just doesn’t add up.
It used to be a standard condition of employment in hotels like those in Queenstown that board and accommodation was provided. In those circumstances, there was no problem attracting labour. Those conditions were eliminated along with set hours, overtime rates and much else during the dark days of the Employment Contracts Act in the 1990s, and they have never returned. It is no wonder the employers now rely on temporary migrant labour that they feel they can use and abuse.
Big companies have also used migrant labour to reduce the wages of management staff in New Zealand. In the fast food industry, wages for managers have declined by at least a third in real terms over the last couple of decades. Migrant labour has been used extensively to achieve this result.
Management visas used to be good enough for permanent residence in the past. Running a McDonald’s, KFC, or BK store is a complex undertaking. There are usually between 50 to 100 staff and the outlets often operate 24/7. The average wage for a manager today is around $40,000 a year.
Twenty years ago, the average was over $60,000 in today’s dollars.
With the removal of Restaurant Manager from the positions able to be used for permanent residence applicaions these companies now have a genuine crisis on their hands. The truth is they have been paying well below market rates for management staff because the workers were focused on future residency, not their current wage. It will be very hard for the companies to get anyone who is New Zealand-born or has permanent residence to run a 24-7 store with up to a hundred staff for a salary of only $40,000. Unite has evidence that companies are already being forced to adjust salaries upwards to attract management staff.
The current system of migration controls is designed to assist bosses by keeping hundreds of thousands of workers in vulnerable positions able to be exploited.
Having tens of thousands of workers come each year on temporary visas in the hope of being one of the lucky ones who are able to transition to permanent residence is cruel in the extreme.
Workers are competing with each other to win the favour of their boss so their visa will be renewed or changed in some way to allow work to continue. Many hope to be able to get into a position where they can get a job that qualifies as one able to be used to transition to permanent residence. However only one in five of those who come here on temporary work or student visas ultimately is able to become permanent residents.
The fact that there are hundreds of thousands of workers who are actually working in unskilled or semi-skilled jobs is proof that this labour is needed not just to plug a temporary lack of skilled workers as is often claimed. It is evidence that there is a need for these workers across a range of roles in the economy – skilled, semi-skilled and unskilled.
Instead of using a rotating door of migrant workers to fill these gaps, there should be a more permanent solution. Migrants that have been brought here to work already should be given the right to residency. Alongside this, there should also be compulsory training and apprenticeship programmes paid for by employers so that any young person in this country who wants to can have a chance at getting these jobs as well. It is inhumane to bring hundreds of thousands of young workers to New Zealand from other countries to fill a spot in the economy only to be replaced in a few years.
As a first step all workers currently in New Zealand must have full legal rights – including the right to change their employer which workers on essential skills visas cannot do. All workers currently in New Zealand should be given first preference to take up permanent residence if they want to.