Where the media fails badly and repeatedly: 457 visas

Every three months, the Department of Immigration and Border Protection releases a quarterly update on the 457 visa program.

Every three months, media organisations repeatedly misunderstand these statistics with shoddy data analysis and retard the public’s ability to understand immigration policy.

The most egregious example I found was from Natasha Bita in the Australian yesterday, who led with:

RISING  unemployment has dampened demand for migrant workers, with 40 per cent fewer foreigners seeking visas to work here last financial year.”

Rising unemployment, at the margins, has likely dampened demand for migrant workers. Yet Bita ignores a much more pertinent impact that is behind the trends in 457 visas.

On 1 July 2013, the price of a 457 visa increased by between 200 and 800 per cent, depending on how many family members one has. This price rise was flagged before it was introduced, meaning people whose visa was due to expire, say in the following 12 months, applied early to beat the fee increases. We can see this here:

Screen Shot 2014-08-26 at 2.18.45 pm

(Source: Subclass 457 visa quarterly report – June 2014, p.1)

These people who applied for visas in June 2013, without any price rise, would have applied for these visas nearer the date their visas were due to expire sometime in 2013-14. This price increase has meant comparing visa trends from 2012-13 and 2013-14 is highly problematic and should be done with a great deal of caution.

While visa applications fell by 40 per cent between the two years, the number of primary 457 visa holders in the labour market actually increased by 0.8 per cent when you compare 30 June 2013 and 30 June 2014. This can be seen here:

Screen Shot 2014-08-26 at 2.22.49 pm

So we should ask ourselves, has demand for 457 visas “plummeted”? No, it hasn’t. In fact, the three month visa application trend in the first graph shows gradual increases in applications, meaning the window where people applied for their visas early to beat the price rise is likely closing. My guess would be that demand for 457 visas is about the same as it was 12 months ago, perhaps slightly less.

This stuff is on PAGE ONE of the statistical report.

Given this basic piece of data analysis is missing from Bita’s article, any inferred causations should be ignored. Rising unemployment has likely played a role in reducing labour demand for 457 visa applications but the impact of prices is significantly more relevant to this story.

The Australian wasn’t the only example of this reporting. SBS’ Gary Cox writes:

“The food services and accommodation sector is the biggest employer of foreign workers, but the number of staff on 457 skilled visas has halved in the past financial year, with rising costs and paperwork being blamed by employers.”

At no point does Cox challenge or investigate the claims of employers. If he did, he would see their claims are bogus. Cox says “the number of staff on 457 skilled visas has halved in the past financial year”. This isn’t even close to being correct.

On 30 June 2013, there were 10,010 primary visa holders in the accommodation and food services industry (table 1.22). 12 months later, this had increased to 13,940 (table 1.22). This is an additional 3930 people, an increase of nearly 40 per cent.

So employers are claiming rising costs and paper have occurred recently (true) however at the same time, this has resulted in an increase of nearly 40 per cent in the industry compared to growth in the program as a whole of less than one per cent. Gary Cox isn’t just wrong, he has come to the completely opposite conclusion to what he should have.

Some people may dismiss these concerns as journalists simply writing to deadlines with little experience in what they are writing about. Everyone makes mistakes.

But the opportunity cost of this shoddy, second-rate, completely useless journalism is that real policy issues go unnoticed.

Why are the number 457 visa holders for positions like Cooks, Chefs and Cafe Managers going through the roof while other occupations stagnate? Likely because of systematic abuse within the hospitality sector of the 457 visa program. Why is the capacity of the bureaucracy to investigate this so limited? Why do we wail over policy prescription and ignore enforcement and compliance mechanisms?

These questions need answers. The editors at the Australian and SBS should do better. There is a real story to be told but its not the rubbish which is being served up every three months when DIBP releases their quarterly reports.

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2 thoughts on “Where the media fails badly and repeatedly: 457 visas

  1. The whole 457 issue is a stuff up, not only do we have people exploiting the 457 holders in many industries but have companies, both local and international, creating bogus positions and experience requirements just so they can employ imported workers. I have experienced this and the Immigration dept has repeatedly ignored calls for these rorts to be investigated.

  2. Pingback: How to understand 457 visa statistics: Don’t read the Australian | Value for Money

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