By Bernard Hickey
Finance Minister Bill English has admitted that the high number of student and working holiday migrants has helped depress wage inflation for lower skilled jobs.
But English said he expected the migration cycle to turn soon to take some of the downward pressure off wages and that real wage growth in New Zealand was higher than in some other countries.
His comments came after net migration hit a fresh record high 59,600 in the year to July and as Opposition politicians and others are calling for a moderation of migration, particularly of more lowly skilled migrants working in aged care, hospitality and farming.
Former Reserve Bank Economist Michael Reddell has highlighted the large number of relatively low skilled long term migrants who have been admitted to New Zealand in recent years and approved for permanent residence. He cited MBIE papers last week showing the top four occupations admitted in the previous two years were chef, aged care nurse, retail manager, and cafe or restaurant manager. A previous post cited figures showing chefs, bar workers, dairy farm workers and aged care workers were among the top categories.
English was comfortable withe current mix of migrants.
"I think we are going through a cycle there," English told reporters in Parliament before National's weekly caucus meeting.
"There was a big pickup in migration, particularly the shorter term working holiday visas and students. It'll be interesting to see what happens when that flattens out. Over recent years we have needed those people because there has been a lot of work to do," English said.
English said total wage growth, which includes wages earned by new employees and over-time, had been growing around 4-5%.
"That's certainly faster than inflation. Hourly rates have been growing a bit slower than that, but the picture for wages is that there has been growth in real wages and that's not that common across developed counties," he said.
Asked if the migrants were taking jobs New Zealanders could have done and were suppressing wage growth, he said: "If there's less people show up it's possible the wages might have been a bit higher. But we've had plenty of work, we've had a lot of job creation."
"But now we are moving into a bit of the cycle where it's likely that that migration must flatten out sometime."
English said he was generally happy with the quality of migrants.
"Generally for those who are permanent long-term migrants our hurdles are pretty high and we've just changed that to redirect them away from Auckland to the regions. Of course, they bring less skilled people with them because they bring their families, but we are pretty happy with the hurdles as we've got them - and the numbers of permanent migrants have been reasonably steady," he said.
'Regulate the flow'
Labour Finance Spokesman Grant Robertson told Corin Dann on Q+A on Sunday migration may need to be limited to take pressure off wages and unemployment.
Asked about the role of migration as a factor elevating unemployment and putting downward pressure on wages, Robertson pointed to Labour's policy of regulating the flow of migration and that per capita GDP fell in the March quarter.
"It’s about getting the right kind of migration into New Zealand, obviously making sure that it doesn’t just go into Auckland, that there are opportunities outside in the regions for people to go to," he said, adding that wage growth was low and migration was putting pressure on Auckland house prices.
Asked if migration was reaching a threshold where it needed to be reduced, he said: "I think we’re getting close to that point."
"The main thing is to make sure the flow of migration is supporting the kind of skills gaps that we’ve got," he said.
"What we’ve allowed to happen in New Zealand is actually to import people into areas where we should have been training them in the past. We’ve got to be much more active about getting our education and training system right to deliver the skilled workers that people need. Right now, we still need those people here because we’ve got skill gaps, but certainly it is putting downward pressure on wages, which long term isn’t good for New Zealand."
29 Comments
Ho ho ho. Good one Bill....
http://www.stuff.co.nz/business/industries/9662595/Days-of-zero-pay-ris…
http://www.stuff.co.nz/national/politics/9664436/English-backs-boost-in…
What is National's strategic direction for N.Z.?
Migration has been purposely used as a means to suppress real wage growth in NZ
has been noted on this site many many times over the years.
the only time the polys speak about it is when the sheeple start to notice.
it has been quite plain for a while now that wage inflation has been very very low and a lot of people in auckland are much worse off with housing inflation being much greater
I think you will find John Key gives nowhere near 100% of his salary to charity, though I guess he would be happy to think that you believe he does, as for the others, maybe they give something to charity, why you would think it would be a large portion is a bit baffling, but lots of people give what they are able to charity.
I'm actually of the opinion that John Key gives more than his MP salary to charity every year. In a somewhat related matter most National MPs take a significant pay cut to become MPs while left leaning politicians can as much as quintuple their salaries when they become MPs. Kinda goes to show who has NZ's best interests at heart. Perhaps we should institute a rule where your MP pay will be at most 25% of your annual pay from before you were an MP.
http://www.kiwiblog.co.nz/2011/12/mps_salaries.html
A ridiculous situation. Migrants on student visas with no skills taking scarce minimum wage (or below) work and prepared to work on very poor employment terms (for the employee).
Key and co are so utterly clueless they are not only stealing the opportunity for young people to buy a home, but also forcing them into unemployment as the tide of non citizens are prepared to work for peanuts and below our minimum employment standards.
Change is needed. Key is a wrecker and hater of NZ and needs gone. He hates our flag. He hates our built heritage. He hates NZers in favour of recent arrivals like himself. He needs gone.
Sad, but true. Key is an international money man. His loyalty lies with monied "elites" and not with his country or people.
However, I would not put down Key's dissociation from real life and his own people to the fact that his parents were immigrants. That's a bit unfair. Donald Trump has a similar background (God forbid, his paternal grandparents were German!) and nobody would question his patriotism. Key is money turned flesh. He has no empathy for us. Even his Syrian refugee stunt is just for media and not because he cares.
Any why did people vote for him? Because most would like to be just like him. Career as a wheeler dealer forex trader, houses around the globe etc. Isnt that what most Kiwis aspire to in our dark time?
that is what makes him so bad
he forgets the state housed him in affordable housing when he needed it
he forgets the state paid for most of his education
now he is rich the only time he remembers these things is when he is telling us look at me im rich and look how I started out.
Most National MPs take a significant pay cut to become MPs while left leaning politicians can as much as quintuple their salaries when they become MPs. Kinda goes to show who has NZ's best interests at heart. Perhaps we should institute a rule where your MP pay will be at most 25% of your annual pay from before you were an MP.
http://www.kiwiblog.co.nz/2011/12/mps_salaries.html
NZ Herald
Indian Restaurants pay $2 per hour and promise them a managers job for skills visa puproses
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=115…
Now that he admitted to the "student" immigration rip-off, people find it much harder to stick their heads in the sand and ignore the injustice perpertrated on them. So uncomfy ... it just about means that one has to do something differently and say goodbye to a few much loved illusions.
yes temporary migration for low skilled jobs means this kind of employment is less likely to give a pathway to higher skills-migrants effectively suppress incentives to train and upskill nz ers in entry level jobs-it's a vicious downward spiral for the less skilled.
Time for someone to do a longitudinal study tracing the so-called skilled migrant downstream over 5 - 10 years and check their continued involvement in "skilled work" where NZ has a "shortage". NZ is being back-filled with economic refugees.
Walk the length of Queen St., check the dozens of "International Campuses" run by every single University, Polytechnic, Private Provider in NZ from Bluff to Whangarei = all running "campuses" offering "degrees" leading to "jobs" so they can financially prop up their home campuses (which would be in serious deficit otherwise). Is this widespread business practice encouraged by the Govt ethical? What is it doing to the academic integrity of NZ qualifications?
All because NZ Govts (of all colours) will not fund NZ Universities & Techs adequately, and because Govts want to push the "migrant" filter from NZ Immigration onto Educators to move migrant/students from Diploma to Job Visa to Permanent Residency.
Where's an investigative journalist when you need one?
North & South made a start this month.
Also:
http://www.nzherald.co.nz/northern-advocate/news/article.cfm?c_id=15034…
If Bill English believes the hurdles are generally pretty high for permanent long-term migrants, he has no idea of what's going on in voluntary support throughout New Zealand. As anyone volunteering with English Language Partners can attest, their clients are great numbers of permanent immigrants (not on student or temporary visas, and not 'additional' family members) with little or no ability to speak English, and often without a shred of training or employment skill. Their situations are often desperate in terms of managing the most basic communication needs of day-to-day life, and their ambitions may be a cleaning job. This is not to talk down to them. It's why well-meaning volunteers feel the need to work with them, as part of maintaining a creditable society once they've been accepted into it as immigrants.
great numbers of permanent immigrants
not on student or temporary visas, and
not 'additional' family members
little or no ability to speak English, and
often without a shred of training or employment skill
so the obvious unanaswered question is - how did they get in?
Many get in based on obtaining a "job offer" in one of these so called skills shortage areas (see second graph in particular);
http://croakingcassandra.com/2015/08/31/what-occupations-did-our-perman…
And has been reported elsewhere (as per the Herald article you linked to), dodgy employers are producing these "job offers" for retail manager, chef etc. and when the people arrive they often work (without employment contracts and/or for less than minimum wage etc.) as a kitchen hand, cleaner, stock hand etc. In many cases I assume that the immigrants have actually paid money to get that "job offer" in the first place.
In short, we have a great deal of immigration scams going down - and no one in the government is properly funded to provide any enforcement or follow up of these resident visa recipients post-arrival.
this practice has been going on for years and years,
and when those in power are involved why am I not surprised the dont raise the issue
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10591650
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10587391
First link - 2009 investigation was shut down and never proceeded
Police ended their investigation into National MP Kanwaljit Singh Bakshi’s immigration scam after the principal accuser left the country in mysterious circumstances
http://thestandard.org.nz/tag/kanwaljit-singh-bakshi/
It [MBIE] found a 47 per cent year-on-year increase in ads for cafe and restaurant managers in August, a 62 per cent increase in ads for solicitors, a 49 per cent increase for medical imaging professionals and an 82 per cent increase for bakers and pastry cooks.
http://www.stuff.co.nz/business/industries/72104656/nz-skilled-job-vaca…
Eating our way to prosperity, or a bunch of fake job ads as part of the visas-for-sale programme?
After having lived & worked in Queenstown for 32 years I left in 2012, to retire. Over that time, Queenstown had always suffered staffing issues...lack of NZ applicants, unskilled applicants who weren't willing to apply themselves to learn new work skills, or even learn how to work. Consequently, Queenstown businesses were forced to take on staff who were, a lot of the times, not up to scratch (could be any Nationality) & had to pay well to keep staff. Then, in 2003/04 the Labour Government opened the flood gates to South America which resulted in the town becoming a Portugese/Spanish speaking enclave. From there on, a person whose mother tongue was English had no way of getting their foot in the door of lower skilled work.
Reasons? Most of the big hospitality businesses were/are off-shore ownership with extremely tight labour costings or they were/are small “local” business owners, who learned quickly how to exploit the high influx of economic refugees descending on Queenstown, with no repercussions from appropriate Government departments due to lack of funding.
Employers could: pay the minimum wage or less; not register their transient or work permitted employees with IRD but still deduct PAYE; get away without employment contracts or if they did supply one it could be so poorly written or photocopied that it made no sense to or could even be read by an English speaker; choose to employ only transients or non-English speaking work permitted people so they could get away without paying the 6-8% Annual Leave; or they could juggle their staff into ridiculous shifts (which staff had no choice but to accept because there was only one alternative...nada) so they didn't have to pay for the Statutory Holidays. Wage rates for low skilled workers in Queenstown were appalling up to 2012 & probably are still because of the economic refugees, who in spite of their exploitation with low wages & ridiculous hours of work are still earning more than their parents do back home, as professionals e.g. doctors, lawyers, school teachers etc. Oh, what a paradise!
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