Australian immigrants and agriculture

Following on from the release of Michael Clemen’s latest paper, Matthew Yglesias has a short post at Slate that includes a comment from someone comparing US agricultural workers to Australian agricultural workers. It reads;

Farm laborers in Australia make much more than American ones. And yet they still have a functional agricultural sector. It turns out that allowing companies to import an unlimited number of foreign workers desperate to work at a wage of epsilon will create shitty working conditions and low wages!

Yglesias responds with “It’s not the foreign workers who create shitty working conditions and low wages, it’s the shitty working conditions and low wages that make people willing to serve as imported labor.”

In relation to the comment, Australian agricultural employers also have basically unlimited access to foreign workers, in our case, the Working Holiday Maker and other types of immigration. These ‘WHM’ workers are unsponsored and given the visas are cheap and accessible for the vast majority of young people in the developed world, this option to see and work in Australia is very popular. In addition, the Government created an incentive for the Agricultural sector by making WHM visa holders eligible for a second 12 month visa if they worked in regional Australia in certain industries for more than 88 days. This incentive has worked. According to the latest statistics, there were 19,112 second visas granted in the 6 months from July to December 2012. This is about 14 per cent of the total number of visas granted (sidenote: many people would be surprised to know that over 136,000 of these visas were granted in 6 months, a 28 per cent rise from the same period the year before).

These 19,000-odd migrants (who are almost all under 30) predominantly work in the agricultural industry in regional Australia – picking fruit and operating farm equipment amongst other duties. However the number of working holiday makers in agriculture could be substantially higher. This study by Stephen Howes and Danielle Hay about the Pacific Seasonal Work program estimate it could be 37,000 (or higher on current trends) when we take into consideration those who only stay for one year. In addition, ‘illegal labour’, such as undocumented visa overstayers (approximately 100,000 in Australia) and New Zealand citizens (about half a million total population) also play a role. All of this falls under ‘foreign labour’.

Agriculture in Australia relies on migrant labour, just not as we traditionally understand it. There are no 457 visas which you hear so much about. There are about 370,000 total employees in the sector. Based on the figures above, migrant labour could make up anywhere from 5 to 15 per cent of this. In terms of lower skilled job, the percentage is almost certainly significantly higher.

Yet despite this, Australian wages in the agricultural sector are higher than the US wages as the commenter points out. Yet his inference that an unlimited number of foreign workers driving down wages and conditions is not true in an Australian context. As Yglesias’ points out,

Well I think it stands to reason that there is some wage at which native workers will pick crops, and it also stands to reason that the higher the wage a farm owner has to pay the fewer acres will be brought into cultivation. Where exactly the quantitative balances lie, I couldn’t quite say.

It’s a difficult empirical point to make either way. But imagining that Australian agriculture does not rely on migrant labour to a certain extent is ignorant and misplaced. The wage difference is much more likely to be accounted for by overall income disparities between the two countries. All lower skilled workers in Australia – from kitchen hands to retail workers – are better off in terms of income than their US peers due to a higher minimum wage and an overarching award-based industrial policy. It’s not about the migrants in this instance.

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