Work visa numbers soar

Working my way through the text and tables that make up MBIE’s very-belated Migration Trends and Outlook for the year to June 2017, I found this on the very first page.

Temporary worker numbers continue to grow

At 152,432, the number of temporary workers present in New Zealand on 30 June 2017 was 16 per cent higher than the year before.

That is a staggering increase in a single year.  Perhaps just as well for MBIE –  and political advocates of the status quo – that these data are held so tightly and released so belatedly.  If this was normal economic data –  released, in accessible formats, every month a few weeks after the end of the month –  that sort of statistic would have been a valuable addition to the pre-election debate.      As it is, it is now 31 March 2018, and we have no idea whether the numbers have gone on increasing as rapidly this year.  Even if MBIE gets back to its normal publication schedule, we won’t know for another seven or eight months.    For a government that talks of a commitment to more open government, that should be inexcusable –  whether you support the current immigration policy or not.

There are various different classes to temporary work visas.  Here are the growth rates for each of the main classes, as reported by MBIE.

work visas stock

There were big increases in the so-called Essential Skills category, but far and away the largest increase was in the Study to Work category –  people graduating from tertiary institutions, and granted the right to work here for a year in any job whatever.  Many of these people will, presumably be hoping to graduate to an Essential Skills visa or a residence visa.  Essential Skills (so-called) numbers aren’t capped, but residence visas are managed to a numerical target, reduced a little by the previous government.

Perhaps you had the impression that most temporary work visas were issued subject to some sort of labour market test (to be clear, I don’t favour such tests).  If you thought that, you were wrong.

work visas 2

Of the top 4 categories, only the Essential Skills visas are subject to a labour market test.  And Essential Skills visa holders make up just under a quarter of the people here on temporary work visas.

The number of people here on temporary work visas has increased by 63 per cent since 2009.   For those interested in nationalities, the main countries with large increases have been India and France (the latter presumably mostly Working Holiday visas).  The number of people here from the UK has increased a little, while numbers from Fiji and South Africa have actually fallen.

And these are the occupations where more than 500 Essential Skills visas were granted in 2016/17

Occupation Number %
Chef 2,178 6.6%
Dairy Cattle Farm Worker 1,617 4.9%
Carpenter 1,478 4.5%
Retail Supervisor 961 2.9%
Cafe or Restaurant Manager 942 2.9%
Retail Manager (General) 767 2.3%
Aged or Disabled Carer 748 2.3%
Dairy Cattle Farmer 508 1.5%

There might have been a building boom on, but actually that apparently-chronic shortage of chefs continues to dominate the numbers.   You may recall my pre-election post noting that the actual make-up of migrant numbers was exacerbating –  not easing –  workforce issues in the construction sector.

Here is another way of looking at the skill level of the people getting Essential Skills visas last year, using the broader occupational categories MBIE reports.

Occupations of people granted essential skills visas, per cent of total
Food trades workers 8.9
Hospitality, retail and service managers 7.1
Labourers 17.6
Community and Personal Service Workers 11.9
Machinery Operators and Drivers 4.4
Sales Workers 4.7
Clerical and Administrative Workers 3.2
Sub-total 57.8

When the labourers make up 18 per cent of those getting Essential Skills visas, I think people might reasonably conclude we’ve been sold a pup.   To be sure, only a small number of those people will end up getting permanent residence, but a large stock of imported labourers –  even if the people themselves are rotating –  is still more likely to be depressing New Zealand wages in those particular sectors, than adding to trend productivity for New Zealanders.  For those sceptical of any adverse wage effects, simply listen to the squawks of employer lobbyists when there is any talk of tightening the criteria.  The natural response when particular types of labour is scarce is for the price of that labour (wages) to rise.

On which note, I happened to read the “China Business” supplement that came as part of Thursday’s Herald –  mostly apparently paid for by firms wanting to keep on good terms with the People’s Republic.    One article that caught my eye was by the National Party’s spokesman for foreign affairs and trade, Todd McClay.    It was a curious article in some respects.  There was this claim, for example

Trade flows remain remarkably balanced for two countries whose economies are of such different size. This is not by chance, but a direct result of successive governments, officials and particularly Foreign Affairs and Trade Ministers regularly visiting China, to secure opportunities for Kiwi exporters.

I have not the slightest idea what the first sentence is supposed to mean (and it is only a few weeks since the China Council was touting that New Zealand trade with China was unbalanced –  more New Zealand exports to China than imports from it).  Surely, the Opposition must have some advisers who know some economics?

Then there was this

As a parliamentary colleague often says “words have meaning”. This is particularly true when Ministers speak of our international relationships. In fact when it comes to trade, “words have consequence”.

One certainly hopes words have meaning –  although sadly one fears that with politicians that isn’t always the case.  Quite what point McClay is making here also isn’t remotely clear, although perhaps it is a dig at anyone suggesting that, as regards China, New Zealand politicians might ever stand up for New Zealand values?

Then again, if words have meaning, what did Mr McClay –  Trade Minister at the time –  mean by these words when his government signed on to the People’s Republic Belt and Road Initiative last year?

BRI 2

Or did those words not have meaning?  “Fusion of civilisations” with such a noxious regime……..

But the main reason for linking to McClay’s article was his comment about negotiations to upgrade the New Zealand-China (so-called) Free Trade Agreement.

China can be expected to push for better access for investment and labour. The revised TPP has doubled the OIO investment threshold from $100m to $200m for China under a most favoured nation clause, but this has already been banked. Given the importance of China to the economy you can expect this will be a hot topic for negotiation.

So too will be access for temporary labour. It is a demand they have made of others and it is likely to be a demand they will make of us.

It is a “demand” that our government should simply refuse.   But as successive governments have traded away the interests of New Zealand low-end workers, in the way they’ve run our own immigration and work visa policies, it is difficult to summon much optimism that they will in fact resist.  From the tone of McClay’s comments, the National Party doesn’t seem to believe they should.

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