As I have noted in a previous post, immigration to New Zealand has become a key battlefield between National and Labour leading up to the national Election in September. Labour has waded in again with some ill-considered claims about what they would do if they got in.
One of these is that migrant workers should be paid a “living wage” to work here. This is presumably a measure to combat the downward pressure on wages because of migrants’ eagerness to accept low-paying jobs as the price for being here.
Their idea of a living wage is over $18 per hour, compared to the current statutory minimum wage of $14.25. Logically, this means that migrants who get visas to work here would be guaranteed, by law, a minimum income which is significantly higher than that guaranteed to New Zealand Residents and Citizens. I don’t know about you, but something about that equation sounds wrong, and is in fact inequitable to New Zealanders as a whole.
Or maybe the Opposition really wants to use this mechanism to stifle the influx of migrant workers. Labour’s manifesto points out that while 100,000 migrants come in to work every year, there are 147,000 locals who are missing out on the jobs. If employers are forced to pay migrants 30% or more than they might pay Kiwi workers, then taking on migrants becomes a whole lot less attractive.
This, however, ignores the fact that there may be very tangible reasons why employers hire overseas workers for jobs like fruit-picking which are not highly skilled and don’t command high wages. After all, if unemployed New Zealanders were ready and willing to work in the orchards, then there would be less need for the established Recognised Seasonal Employer scheme.
But not enough New Zealanders want to do those jobs. We hear the same story across many industries – employers want to hire hard-working and reliable people in rest homes, factories and farms, but local candidates sent to them by WINZ don’t show up or don’t want to work shifts. Make no mistake, hiring a migrant is inherently harder to do than to take a New Zealander, because the employer is forced to prove that they have advertised and to take the risk that the person will still fail to get a Work Visa. Despite this, employers are often left with little choice but to go down that route in order to secure someone who is keen and highly motivated over any number of Kiwis who can always go back on the benefit if they don’t get the job.
If so, then imposing a “living wage” on New Zealand employers merely adds yet another compliance cost on doing business. If they can’t afford it then they might consider scaling back their operations. Overall, the outcome of Labour’s proposal would be to strangle small businesses in particular, just at the time when Government should do everything to encourage them to make the most of the improving economy.