New Zealand should encourage and welcome high-skilled migrants, and not treat students and temporary workers as commodities to be exploited, Bernard Hickey says

New Zealand should encourage and welcome high-skilled migrants, and not treat students and temporary workers as commodities to be exploited, Bernard Hickey says

By Bernard Hickey

Three news items this week highlighted some of the big economic and social risks and opportunities posed by New Zealand's current migration settings.

Firstly, there was the case of the Indian student who came forward and told TVNZ about how an Auckland employer offered her as little as NZ$9 an hour to work as a receptionist for up to 60 hours a week, even though her temporary visa only entitled her to work 20 hours a week. This came as the Labour Inspectorate noted it had prosecuted 54 employers for migrant abuse over the last two years, and many others believe this is the tip of the iceberg.

Reports have escalated this year about how foreign students in particular have been taken advantage of and are being paid below the NZ$15.25 an hour minimum wage in all sorts of low skilled jobs. Some are being forced into prostitution and crime to repay debts. An Auckland University survey of nearly 900 temporary migrants in October and November last year found over 40% worked in hotels, food service (cafes, restaurants and fast -food outlets) and shops. It also found 20% were being paid less than the minimum wage.

International student and temporary work visa migrant numbers have jumped 27% in the last two years to 71,762 in the 12 months to the end of August, with most coming to Auckland and looking for jobs in relatively low-skilled areas such as fast food, hotels and retail. Unaware of the law's protections and wary of authorities in a foreign land, many face exploitation or worse.

Secondly this week, the New Zealand Institute of Economic Research (NZIER) published its September Quarter Survey of Business Opinion (QSBO), which found 27% of businesses wanted to take on staff in the next three months. This was the highest level since September 1973. The survey also found 41% of employers nationwide said it was difficult to find skilled labour, the tightest the market has been in a decade.

However, fewer employers (14%) said it was difficult to find unskilled labour and in Auckland the proportion who said it was difficult to find unskilled labour actually fell to 21% from 25% the previous quarter. The surge of low-skilled temporary and student migrants into Auckland has helped employers find low-skilled workers on often below-minimum wages, but it hasn't helped them find skilled workers. The survey found 47% of Auckland employers said they were finding it difficult to find skilled workers, up from 43% in the June quarter.

This tallies with the call in August from Auckland Chamber of Commerce Head Michael Barnett for a review of migration settings to better calibrate the migrant skill levels to the jobs available. Unlike Winston Peters, who wants to slam the door shut and just cut the number of arrivals, businesses actually want more and and higher-skilled migrants. Essentially, Auckland needs a lot more engineers, project managers and truck drivers, and not so many cleaners and fast food workers. Treasury and MBIE have also worried over the last year about too many low-skilled workers dragging on wages and making it harder for beneficiaries to move into work. Treasury would like to encourage many more higher skilled and entrepreneurial types to settle here.

"It's not about the number. It's about the matching," said Barnett of the disconnect between migrant arrivals and jobs on offer.

ANZ Chief Economist Cameron Bagrie also noted the apparent gap between the skills of Auckland's migrants and the skills employers are short of, as shown in the QSBO.

"That points to a mismatch over what New Zealand needs versus what is coming in," Bagrie said.

Thirdly, the post-Brexit announcement this week by British Home Secretary Amber Rudd of a crackdown on low-skilled foreign students and migrants with temporary work visas looks set to make it much harder for New Zealanders wanting a traditional OE in London. Just as Australia's relative economic slowdown drove a significant part of New Zealand's record net migration surge over the last three years, a British crackdown could turbo-charge that net migration by discouraging New Zealanders from leaving and bringing many home early. This is both a threat and an opportunity, as Xero CEO Rod Drury highlighted with a tweet within a couple of hours of Rudd's announcement.

"UK should totally send all software developers and technology leaders back home," he said, pointing to Xero's page for job openings.

This week's events show the debate about migration New Zealand is going to have ahead of the 2017 election should be much more sophisticated than just a contest about the overall number. It should also be about the types of skills we are welcoming in, and about being a welcoming society that treats its new arrivals as valued new citizens, rather than just another resource to be exploited.


A version of this article also appears in the Herald on Sunday. It is here with permission.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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One thing you didn't point out about needed skills was this
http://imgbox.com/hPbuHrAE

I think Michael Reddell of Croaking Cassandra has argued a similar point. That the demand effect of immigration is greater than the supply effect. So it is impossible to solve housing supply constraints by importing foreign workers. Specialist or not.

Employer representative bodies keep making ambit claims their employer-members can't obtain skilled employees. They want the immigration spigot kept open. Have you ever seen published a list of skilled vacancies required. We keep hearing about this lack of skilled people. Never any detail.

What we would like to hear is what skills, what jobs, where are they located and what remuneration is offered

For the first time we see Bernard offering a glimpse into that murky world wanting engineers and truck-drivers

Treasury and MBIE have also worried over the last year about too many low-skilled workers dragging on wages and making it harder for beneficiaries to move into work.

Does this claim constitute a cause for the high and rapidly rising number of NZ children enduring poverty?

The UN has said in a damning report that it is deeply concerned about New Zealand’s persistently high rates of child poverty.

Unicef says 300,000 children – a third of New Zealand’s child population – now live below the poverty line. This is a rise of 45,000 in a year. Read more

Remember that driving large vehicles around our cities is frustrating.

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One thing is very clear that most students specially from India and China are comming here not to study but to get residency and enrolling as a student is the first step in that process.

Am sure even the national government is aware of it. Stop work visa that leads to residency and the number will drop drastically.For employers many survive on cheap underpay wages and also many business people are in the business of giving job letter to students for a fee/money - one example is restaurent and travel agencies.

This government policy is harming NZ in the long run.

No international student should be allowed to work. Period. And they also fine here to buy property

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How can a student have the financial resources to buy property anywhere?
They can't.
Acting as a proxy more like it.

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If they come here to study and bring in the $billions the education system is supposed to earn, why do they need to work? They're supposed to bring export dollars in with them

Now they are allowed to work 20 hours per week.
Then they are burgled into working 60 hour weeks by their own countrymen

When do they get the time to attend lectures and study. Impossible

When I was at school 20 years ago, we had international students who moved to NZ and boarded at the school, and most appeared to purchase houses in towns around the area. With some, their families came over to visit them and stayed in the houses. So this isn't new, it has been happening for at least 20 years, but it is probably a lot more widespread now.

Frankly I'd rather the government take on debt. What is more harmful in the long term? Neocolonialist immigration dividing society culturally and economically, or; some debt which can be paid off later.

We have to import skills because, successive NZ governments have failed to encourage businesses to train Kiwis.

How exactly do you encourage private businesses? Pay them? Subsidise? Force them via legislation?

Face it, the failure isn't with the govt on this one. The free market just doesn't work.

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Immigration has nothing to do with skills, nor has it anything to do with reducing wages.

John Key is Hell Bent on destroying the English-nes of New Zealand and destroying the English culture

Just as a hundred years ago the English used immigration to destroy the Maori-nes of New Zealand and Maori culture.

A vote for John key is a vote to destroy the English culture in New Zealand

We were an ethnic nation up until Labours immigration review 1987 and it's "long awaited" changes. What is interesting is the way that is being down played as something easily analysed and deconstructed ("a social construct") in the drive to multiculturalism.
http://www.teara.govt.nz/en/new-zealand-identity/page-1

A pretty dodgy comment there, Mike B. New Zealand is now not "little england" no matter how much many traditionalists would like to see that backward idea preserved. If you want England, it is there for you. But we are ourselves, a vibrant South Pacific nation. We have grown up to be ourselves, not a cultural colony of anywhere else. It is our independence I value.

I live in a growing cosmopolitan city, and I love it. Sure it has stresses, but in change you need to accept that is the way it is. Harking backwards to a old era that was less stressful is just willful blindness. The old New Zealand of a couple of generations ago was a false, stilted, uncreative time. I for one don't want to go back there - and I am nearly 70!

Despite the flaws in transition (to a cosmopolitan NZ), I am sure it will be far better than where we came from. And my kids are thriving here, and my grandkids will too.

David, if your point is correct then why do we have all this revision of Maori culture?

According to you this is backward thinking so i guess you are opposed to all this revision of Maori culture. Is that Racist i wonder.

I never said multiculturalism is bad i am just saying what is actually happening.

David you said "If i want England it is there for me" I could equally say if you want Cosmopolitan life then it is also there in England for you, or maybe you prefer to live in Europe as they are having a great time with their immigration. You would love it.

I agree. I think it is a huge positive that we(finally)have a large and cosmopolitan city like Auckland. If people don't like it there is a massive country out there that they can escape to.

No.

Thats a very fashionable statement David Chaston, but are you sure it's true. New Zealand a couple of decades ago was actually magnificent.
Like it or not New Zealand is the great place it is today because the English bought here the virtues of democracy, law, and rights of the individual. (And I speak as somebody who's ancestors have been shooting the English for centuries.)
David, respect for the good things of cultures, includes respect for the good things of all cultures.

David Chaston perfectly echoes the mantra that change is coming and only small minded people oppose it. 'Cosmopolitan' types embrace the future while tradition is backwards and irrelevant. And of course he adds we are a "vibrant South Pacific nation", a meaningless platitude.

Go back to little England if you want, he says, but remember that England too is subject to the demands of the David Chastons who insist that change is inevitable and that Britain should be "vibrant", a polite of way of saying there should be fewer white people and more "people of colour" (white people are the negative correlative of diversity and thus not cosmopolitan enough)

Of course no specifics as to what this transition to a "cosmopolitan NZ" will look like. I don't think the rest of the country got the memo, David, so perhaps you should fill us in as to what this exciting future holds for us.

No. There is no easy dreamy future coming in lovely Cosmopolitan cities ... I suggest taking 30 minutes to watch this to see where (population) growth is taking the planet
https://www.youtube.com/watch?v=VOMWzjrRiBg

> If you want England, it is there for you

England has been turned into well, not-England. The London mayor Sadiq Kahn hates the native culture. The police in Rotherham ignore all kinds of sexual crimes committed mainly by Pakistani men which the media refer to as "Asian". The BBC have an affirmative action HR policy which is resulting in white men losing their jobs. It can only get worse with birth rates being higher for non-natives. This kind of multicultural experiment has permanent ramifications. England is long gone thanks to Tony Blair.

You wouldn't want to live there and neither would Mike B.

You are largely correct although I have been staying in and travelling around Kent as I have a brother there and that is still very English. You can buy a decent old cottage/terrace house in a gorgeous village less than an hour by train to central London for around 600-800k NZD. I'm pondering retiring here as it is quite cheap to live. If you own a house you only need about 1000 pounds a month to live on - mind you exchange rate is great at the moment. However this will likely change as large areas of countryside are being developed into housing estates. The new estates are nicely designed but it is a bit ominous.
My whole family still prefer NZ they say.

The old New Zealand of a couple of generations ago was a false, stilted, uncreative time. David Chaston

It is interesting that you feel that way. I suspect most other countries were the same or worse. I don't think anyone is actually saying that we should return to the past. The old New Zealand without massive immigration would have continued to develop and evolve. The problem is the scale of immigration and the very real possibility of New Zealand culture being erased and replaced with something worse. I'm actually typing this comment in a hotel room a few minutes walk from the Louvre in Paris. It is a great city and is the result of the energy of a unique and chauvinistic European people. I doubt they would have built something so magnificent if they were 'wonderfully diverse'.

And my kids are thriving here, and my grandkids will too.

I reckon they are thriving despite the diversity rather than because of it. A Chinatown, a few ethnic restaurants, celebrating Diwali and so on does not help your family thrive in any way particularly. Immigrants gain far more from their new hosts by gaining access to the resources and institutions built up over generations. Resources that are often not available in their own countries. Your children are thriving because of the efforts of our ancestors, because of the foundations that they laid down.

I so like that comment Zac "Your children are thriving because of the efforts of our ancestors, because of the foundations that they laid down."

mmmm, I see your points and David's. Both have merit. NZ was a pretty grey,unsophisticated and repressed place in many respects.
Having said that, lots of great art (painters and musicians) made it out of that repressed culture. The repressed culture was probably an outlet for it.
I tend to side with David in liking the NZ today better, overall.
Having said that, I think it is going too far down the route of opening it up to all the world, at the expense of its citizens.
For me, it's not 'either / or'. It's both. But we need to ensure a balance

Many professional Kiwi's in London have been caught by the whole BREXIT situation. Whereas many hoped to sell London property and move back here to educate their Children they have the double whammy of exchange rate and property prices moving in the wrong direction. The differential is around 30% over the last year if not more.

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They took a risk. Why do we care?

Because they are our family members perhaps ?

Is this below minimum wage carry on a case of earlier migrants operating businesses employing more recent migrants and paying them cash? Perhaps we need Dept of Labour (if there's still is such a thing) inspectors calling in on all of these businesses on a regular unannounced basis and keeping pressure on - IRD also need to keep their finger on the pulse. The entire downtown area of Auckland should be worked over and weed out all these black economy cash businesses.

We do have a Dept of Labour, and they do target employers who break the law, including by profiling. They do bring prosecutions and almost all are successful. It is just that while there is a problem, it is not at the level some conclusion-jumpers assume. You clearly know little of the businesses in the central Auckland area.

How do you know David. I don't know the Auckland CBD, but I do walk around my area. I can see businesses that almost never seem to have a customer. Usually some poor immigrant living off funds until they can establish. What about the cleaning businesses at prices that are a joke.

they only start an investigation if they get a complaint, the days of targeted checking are long gone.

There's a major shortage of skilled bank economists. Why aren't we chasing more of those? :)

Because we still don't want them :-)

Encourage high-skilled migrants like the doctors to come here to drive taxi? No thank you.

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Dodgy business is dodgy business and New Zealand will never get rich chasing it. Our export ''education" industry is just dodgy to the core with fees being extracted from 'students' who in most cases just want to get a ticket into the country.
We don't get rich and we get a mess on our hands - always a sure thing with dodgy.
Stephen Joyce should be apologising, as should some of our government owned education institutions.

A country is a business. As a very simplistic example, compare NZ to a dairy farm.
If the farm has 3 employees and nets 1million dollars shared evenly thats $333,000 each.
If the farm needs infrastructure like effluent ponds and therefor employs more people the profit drops and is shared amungst more people.

That is exactly what were doing to NZ, Population growth needs infrastructure. Building the infrastructure is a cost on the economy, The bigger population means there are more people to share NZs reduced wealth.
NZs reduced wealth means increased child poverty, increased homeless families, increased crime, but yes Mr Chaston we are more cosmopolitan.

I sincerely hope you don't run a business. Your argument has more holes than a piece of gruyere cheese. For a start,efficient growing businesses need to invest in infrastrucure and if properly costed,that becomes profit enhancing. Take F&P Healthcare as an example. They 'spend' some huge amounts on R&D. In your world,that would reduce their profits and the employees and shareholders would suffer. In the real world,this is not only profit enhancing,but essential to their survival.
Countries are not businesses.. Governments have to spend money on stuff that in conventional terms cannot make a profit;basic infrastructure like sewage disposal,prisons,etc.
NZ needs immigrants;those with the skills to help drive the economy forwards.

Sorry linklater, my simplistic example was too simplistic.
I assure you a country is a business and what it can afford to import has a direct correlation with what it exports.
Government policy has huge impact on the running of this 'Business'.
NZ needs to take responsibility to train its own young people for meaningful rewarding employment. Our universities train marine biology when the only employer DOC is loosing funding. Our polytechs teach dressmaking when we import dresses for $5 from China. Our kids have huge student loans while our productive industry employs immigrants instead of training our own.
There is a huge disconnect between our education service and our reality employment.
Not to mention when we rob third world countries of their educated people we do them a huge disservice.

woops, pushed button twice.

My question would be how many of the prosecutions that have been taken against employers who take advantage of immigrant labour are in fact from the same country themselves.

Answer: most of them

There is something strange going on with immigration. I am aware of a number of situations where European families have be sent back despite being good contributors to our economy.
First a young couple where the husband was a cameraman. In this area work is not normally continuous. His current project ended so the family was sent back.
Another couple are both actively employed in work that are on the list of needed skills. The Immigration department is doing everything it can to make it impossible for them.
Recently we read of a Danish electrical engineer and her husband were establishing a orchard in Nelson. She is to be sent back because she is not practising as an engineers.
All these people are European. Contrast this with the number of Asian, Indian and middle Eastern immigrants who allowed to remain here on very flimsy pretexts. It seems to me that we are strongly favouring immigration from some counties and strongly discouraging it from others. Are we obligated by trade deals? or is it part of some grand world plan that we are not being told about?

They were too honest and played by the rules

If they were really smart, the Danish Engineer would have got her husband to set the business up in his name, register it as a business called Electrical Engineering Orchards, employ his wife, work her for 60 hours per week and give her a written letter of intention that he will help her with obtaining her PR

That's what the dodgy PTE's do, enrol them, charge a fortune, send them down the road to a friendly ethnic take-away restaurant who works them 60 hours per week, the PTE registers them as having attended courses for those 60 hours that week and furnishes a diploma at the end of it all

Maybe, but the second case, which I cant reveal too many details about, is unbelievably blatant, because the professions that both are actively contributing at a high level, are the very same professions that the government offers up as a reason for the need for immigration.