Bus drivers and Essential Skills visas revisited

Last week I wrote a bit about bus drivers.  Not a usual topic here, but there were media stories about Ritchies in Auckland apparently being unable to recruit New Zealanders (or foreigners with existing work rights) to staff the new bus routes they’d won through the Auckland Transport tender programme.  My suggestion was that the company had probably deliberately bid at a price at which it could make money only if it could use government immigration policy to hire migrant labour.

In a typical market, there aren’t sustained physical shortages –  the price adjusts.  If in this case the price (driver wages) wasn’t adjusting –  if anything there was a suggestion Ritchies would be paying less than the previous operator –  it suggested the plan was to close the gaps another way (bringing in more relatively unskilled people from abroad.)    Ritchies has moral agency in that –  they made a choice to bid that way, and should live with the consequences if it doesn’t work (if, for some reason, MBIE turns down their application to bring in relatively unskilled workers from abroad).   But I didn’t want to focus on the individual company, since they are responding to incentives set up by various arms of government –  Auckland Transport offering the contracts, and even more so MBIE (as part of the New Zealand government) in making immigrant labour relatively readily available for what are really quite unskilled roles.    And it isn’t as if Ritchies is the only company operating this way.   Another operator has won most of the bus routes in Wellington, to take over in July, apparently operating on very similar assumptions about access to new immigrant labour.

(Just to clarify one thing.  My view is that managerial changes, or new technologies, that improve efficiency and/or lower the demand for labour in a a particular firm or industry are generally a good thing.   They aren’t always easy for the people concerned, but over time productivity –  the essence of higher living standards –  involves getting more output from the same inputs or (in many individual firms, industries) getting the same output with fewer inputs.   There are many fewer telephone operators or night soil collectors, and that is unquestionably a good thing.  Productivity gains make possible new firms, and new industries, and overall employment rates remain high.  Real wages, across the economy are far higher than they were a century ago –  and that too is a good thing.  It is a desirable outcome of economic progress.   If there were serious inefficiencies in the bus industry, I’d not be concerned out at all about those being rooted out.  But that doesn’t seem to be the issue here.)

In addition to the various visible comments on the post, I had some comments directly from people involved in the industry, on both sides.  In substance they were making quite similar points.  As one observed, demand growth (in this case for bus drivers) can always be met by expanded capacity (immigration) or higher prices (or wages).  They went on to argue that the ability of some companies to import drivers meant they won contracts, and that it was as clear a case of immigration driving down wages as you could find.

Of suburban driver jobs, I observed last week

It is a responsible role, but not one requiring huge amounts of skills or training (according to the story I linked to above 6 to 8 weeks training suffices).    It isn’t the sort of role one naturally thinks of when officials and ministers talk about skills-focused immigration programmes.

One driver confirmed that training story noting that his employer

…took me on with just a car licence. They spent about 8 weeks training me up and paid for the costs of getting a heavy traffic licence and a P endorsement (essentially a “fit and proper” test.)

In terms of (price-based) evidence of labour market pressures, this driver observed that over five years or so his basic hourly rate has increased by only around 1 per cent per annum (if so, that would be less than the average rate of CPI inflation, so a reduction in real wage rates).

There seem to be a variety of ways to spin the story as to how much bus drivers are being paid, and what the new entrants (Auckland and Wellington) are offering or planning to offer.   On old contracts there are basic hourly rates (pretty modest –  in fact about (in real terms) what the government wants the minimum wage to be a couple of years from now), but there are also shift allowances and penal rates for weekend work.  Relative to what the new operators are proposing/offering, there also appear to be differences on rules around split shifts (maximum number per day) and whether drivers get paid for the time positioning buses (to the start of a run or back to depot).    There doesn’t really seen to be much dispute that the new operators –  claiming an inability to find sufficient local labour –  are not offering drivers more than the current operators.  Indeed, the general sense seems to be that pay for equivalent effort would be less than at present.

And in a typical, well-functioning, market, when demand exceeds supply –  and not just for a day or two  –  the price of the product or service in question will rise (not fall).   Quite how much the rise will be will depend on the elasticities of supply and demand –  maybe a lot more potential drivers would emerge for slightly higher wages (or maybe not), and maybe bus patronage would drop away sharply with slightly higher fares (wages are by far the largest component in bus company costs) or maybe not.  But you wouldn’t expect to see the relevant price –  bus driver wages –  under downward pressure when there is incipient excess demand for drivers.

(It is not as if the outgoing operators have had abundant labour.  As one correspondent noted “Go wellington have about 340 drivers for the current contract but even with huge active recruitment and training from scratch they only get 100 new per annum which is as many as they lose”.)

In fact, the way the bus driver labour market exists seems to be possible only because our governments –  present and past –  have opened up a channel through which supply can be increased, at or below the current price.  Open up incipient excess demand at current –  or lower –  than prevailing wages, and then get in workers on a (so-called) Essential Skills visa.

Bus drivers aren’t an occupation that appears on the official “skill shortage list” (if they were there would no further labour market test involved for any firm wanting to hire foreign labour).  Occupations such as bricklayers, plasterers, bakers, and jockeys are on the list.   But not being on the list doesn’t mean bus companies can’t hire foreign drivers.  There are just more hoops to jump through –  which is why employers who think they might have multiple vacancies (like the bus companies) are strongly urged (by MBIE) to seek an “approval in principle”.

MBIE’s employer guide is here.   You’ll see that for unskilled or modestly skilled jobs, part of the required test is to check with WINZ as to whether there are New Zealanders seeking work they can refer to the employer.   Bus drivers are in that category.

Here is the Work and Income process, as MBIE describes it

You can contact Work and Income at the same time (or before) you advertise the vacancy. Once the vacancy is submitted to Work and Income it will be listed immediately. Work and Income will search its database for suitable clients, and suitable candidates will be referred to you for consideration. Candidates referred can either have the required skills, or be readily trained to do the work on offer. If you don’t believe the candidates referred are suitable, you should discuss the results with Work and Income.

If you want to support a work visa application, you should request a Skills Match Report. Work and Income will gather information about unsuccessful candidates and complete a Skills Match Report. Work and Income will provide the Skills Match Report to you and Immigration New Zealand within five working days of the date they close the vacancy.

Which sounds reasonable enough, if rather bureaucratic.   But given the huge increase in the number of people here on temporary work visas over recent years –  even as the unemployment rate has been at or above typical NAIRU estimates – it doesn’t seem to have been much of an obstacle to enabling firms to bring in workers to fill roles that aren’t particularly highly-skilled.  It isn’t clear that bus drivers roles will be any different (certainly there has been no change in government policy signalled since the change of government.)

Then you have to advertise the roles (which, I gather, the bus companies have already done).  There are various restrictions –  you can’t expect, for example, to get a work visa approval if you only advertise in Samoan (say) or in media that only foreigners are likely to read.  In the official guide to employers, wage or salary rates don’t seem to be part of the relevant test at all, although if you dig far enough there is an operations manual in which it states

For the purposes of these instructions an employer is not considered to have made genuine attempts to recruit suitable New Zealand citizens or residence class visa holders if:

  • the employer has advertised the work in such a way that no New Zealand citizen or residence class visa holder will or is likely to apply e.g. making foreign language skills a requirement when it is not necessary for the performance of the work; or
  • an employer has advertised the work at terms and conditions that are less than terms and conditions New Zealand citizens or residence class visa holders typically receive for equivalent work.

That looks mildly encouraging.  You can’t just offer the minimum wage (for a job in New Zealand typically paying $5 an hour more than that) and expect to get your approval in principle to bring in foreign workers.   But if your wage contract is a little different from other operators (perhaps base rates are a bit higher, but other payments are lower?)  or even if you can find one other company somewhere in the country paying the same overall rate, you have to wonder (based on total numbers approved if nothing else) how rigorous MBIE is in enforcing the test.  And why, for example, it isn’t given more prominence in their guide to employers?

Because, you see, MBIE is really keen that firms hire foreigners.    In fact, they have whole website pages devoting to extolling the virtues of immigrant labour –  so much so that one has to wonder whether they really see themselves working in the interests of New Zealand citizens.    Employers are told

“Hiring migrants is a great way for you to maintain and grow your business”

And then the first item under that “Why hire migrants?” employers are told

Migrant workers can do more than just fill a gap in your staffing. They bring with them an international perspective and connections, provide support to up-skill local employees, add diversity, and generally can help businesses to stay ahead of their competition.

The “international perspective and connections” being oh so important for bus drivers, bricklayers, or even the cafe or retail managers or aged care nurses (occupations topping the work visa approval list).    There is no hint for example that there might be any disadvantages –  eg lower returns to New Zealanders in similar occupations, or the simple fact that, in aggregate, migrants add more to demand pressures (including for labour) than they do to supply in the short-term.

If we are going to have government officials administering something like a mass market Essential Skills visa scheme, and deciding who does and doesn’t get approval, surely a key aspect of any labour market test should be something along these lines?

“has the effective wage or salary rate for this occupation risen materially faster than wages and salaries more generally in New Zealand over the past couple of years?”

If not, how can you seriously use the term “skill shortage”?    Even if wages in a particular occupation have risen faster than the norm, it takes time for locals to respond and shift occupations, so one wouldn’t necessarily want to jump at the first sign of a bit of real wage inflation in a particular occupation, but if after a couple of years the pressures were persistent then some sort of Approval in Principle for temporary migrant labour –  at wages at or above those now prevailing in the domestic market – might make some sense as a shock absorber.  But MBIE seems perennially averse to markets adjusting in ways the generate higher real wages, even though that outcome is one core part of what we look for from a successful economy.  Successive Ministers of Immigration –  from both main parties –  seem to buy in to the story, and believe that central planning by them and MBIE bureaucrats is going to work better than the price system.  It wasn’t a good system in the Soviet Union, and it isn’t here.

I can’t see a reason why we should be giving Essential Skills visas for suburban bus drivers, and we shouldn’t be creating a system where firms are encouraged to bid in the expectation that they can use that system, rather than pay a market-clearing wage for New Zealand resident workers.

More generally, I don’t think there is particular merit in a system in which officials are picking and choosing which firms can and can’t hire short-term workers.   As I noted in my previous post I favour something along these lines

To that end, I’ve argued previously for a system in which Essential Skills visas are granted on these terms:

a. Capped in length of time (a single maximum term of three years, with at least a year overseas before any return on a subsequent work visa, with this provision to apply regardless of skill level).

b. Subject to a fee, of perhaps $20000 per annum.

If an employer really can’t find a local hire for a modestly-skilled (or unskilled) position, they’d be able to get someone from overseas, but only by paying (to the Crown) a minimum annual fee of $20000.  It is pretty powerful incentive then to train someone local, or increase the salary on offer to attract someone local who can already do the job. If you can’t get a local to do a job for $40000 per annum, there might well be plenty of people to do it for $50000 (and still cheaper than paying the ongoing annual fee for a work visa employee).

There are lots of operational details that would need to be refined, but as a starting point it seems like a pretty attractive system.  In the current situation, if bus companies really can’t find New Zealanders to drive, they could hire foreigners, but would have to pay an additional annual fee to the Crown of $20000 for each approval (but also wouldn’t otherwise have to jump through bureaucratic hoops, legal fees etc).  I’d be really surprised if there were any bus drivers then on Essential Skills visas or –  reprising the list from my previous post – kitchenhands, waiters, or massage therapists.  But, you never know.   If the market price adjusted that much that it was still better to hire a foreigner, that price adjustment might be a pretty compelling argument for a rather more genuine “skill shortage” than what we have now.

Perhaps in the end, MBIE won’t allow the bus companies to hire immigrant labour to fill the vacancies.  I’d welcome that, but the bigger issue isn’t any particular role, but how the system as a whole is designed and operated.

(And, to be clear, the overall wage effects of high immigration are ambiguous, in part because in aggregate immigration boosts demand more than supply in the short run, and there are repeated waves of migrants, and thus repeated short-runs.  I am not one of those arguing that immigration policy is driving wages systematically down.  This post is about the impact in specific localised markets, and even more about the rules regarding labour market tests.)

Hiring migrants is a great way for you to maintain and grow your business

Hiring migrants is a great way for you to maintain and grow your business

Hiring migrants is a great way for you to maintain and grow your business

30 thoughts on “Bus drivers and Essential Skills visas revisited

  1. FYI

    Any bus company offering less than $20.65 per hour and seeking to bring in bus drivers on Essential Skill Visas are in fact seeking an exemption from the established rules. If Ritchies bump their hourly rate up to $20.65 the classification then achieves a status of lower-skilled, which enables a 12 month Visa that can be followed by 2 x 12 month stand down periods, and the employee has to go thru the hoops again each time. Can you see that happening in Auckland

    https://www.immigration.govt.nz/new-zealand-visas/apply-for-a-visa/tools-and-information/work-and-employment/how-long-you-can-stay-on-an-essential-work-visa

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    • Thanks. My reading of the rules is that for jobs like this (ANZSCO skill level 4), even at less than $20.65, you can only get a 12mth visa, but it can be renewed twice (for a total max stay of 3 years) without leaving the country or a standdown period.

      A Wgtn informant suggests Tranzurban is offering something near $20.65.

      Re your other comment, well quite. Then again, the Living Wage itself is a daft concept. But govt policy is to have the minimum wage to $20 by 2021. In today’s dollar terms (2% inflation a year) that is $18.80, so even the gap between minimum and “living” wages is rapidly closing, most probably at the expense of less able young people and others on the fringes of the workforce.

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      • Thanks – interesting article. My correspondent notes of Tranzurban that “Tranzurban has made public statements for many months that they might have to pay $22 per hour to “meet the market”. But, first, the currently pay their existing employees less than that and it seems they are offering around $20.50 mark at the moment”.

        In terms of this post, my real interest is that there is no sign either Ritchies or Tranzurban are looking to raise wages to attract additional drivers, even though that would be the natural market response (absent a migration “safety valve”.

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      • National leader Simon Bridges says it’s happening because the new Government has emboldened unions to strike.

        “They feel like their mates in the Labour party are in power and now it’s payback time.”

        Prime Minister Jacinda Ardern rejected the accusation, saying: “Are we seeing now the reverberations of ongoing, across the board, a low wage economy in New Zealand? Yes, I think we are, and that is now bubbling to a head.”
        ………
        CORIN You don’t want immigration to fall, though, do you? I just want to say something. I saw you in a speech after the Budget, and you were speaking to a big room of businesspeople – some of the biggest business minds in the country – and you stood up and you said, “Don’t worry about Treasury’s figure or estimation that it will go back to the trend of 12,000.” You were confident it was going to be a lot higher than that.

        JOHN I just think it’s unlikely it will go to 12,000.

        CORIN But it was like you wanted immigration to go up, because you were telling them, “Don’t worry. The demand in the economy is going to stay there. That’s what’s keeping New Zealand afloat.”
        http://www.scoop.co.nz/stories/PO1607/S00020/qa-prime-minister-john-key-interviewed-by-corin-dann.htm

        Meanwhile one election prior
        The Landlord Says Blog:
        Meanwhile the National Party released its immigration policy. You may wonder what this means for the property market. It is clear from research that immigration is one of the key drivers of house price growth.
        The logic is simple. If you import more people into the country, then you need more houses. Supply and demand means that prices are then pushed up, this is particularly so in Auckland.
        While the latest immigration numbers show the number of people coming into New Zealand is starting to rise, the Nat’s policy looks like it wants to increase immigration levels even further. (Although it is unclear what sort of number they are targeting.)
        This policy is, arguably, a plus for people who want house prices to rise. (But may be not so good for first home owners wanting to buy.)
        My guess has always been that property investors lean heavily towards the right rather than the left. (This was made clear in an email newsletter I saw from one developer this week.)

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    • Any foreign worker on a work permit of 12 months is still considered a Permanent and long term migrant. You can hire from the Study Visa pool who are also considered Permanent and long term migrants.

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  2. Wellington City Council is now a “living wage” employer @ $20.20 per hour. Last week it was commented that WCC was taking over all council owned car parks, terminating all existing employees and re-advertising the positions on a living wage of $20.20 per hour.

    What is the more onerous job – what is the more skilful job – a bus driver or a car park attendant

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  3. Reading your article with its clearly expressed argument is intellectually satisfying. However as I think of the low-paid workers in NZ and how our frenzied rate of immigration is keeping their wages down it makes my blood boil.

    “”Why hire immigrants? They bring with them an international perspective and connections, provide support to up-skill local employees, add diversity, and generally can help businesses to stay ahead of their competition.””
    Well one part of that cannot be argued with: cheap foreign workers let you squeeze out honest Kiwi businesses.

    You are not arguing that immigration policy is driving wages systematically down. Well I do; at least I do for low paid workers. The only bus driver I ever knew as an acquaintance was 40 years ago in London. He was married to the head of the French department at a local school; a trifle unusual but in terms of comparative annual earnings almost certainly not the ratio you would get in Auckland today. Similarly somewhere recently I read the average earnings of an Australian chef as a fraction of their average wage has declined rapidly since they started their high immigration experiment.

    There has been substantial effort recently comparing incomes by gender and how the ratios have changed over the years; could similar statistics prove how immigration has hit the low-paid in New Zealand? Is there data for average earnings by skill: for example chef, baker, care-giver, waiter and how they have changed compared to the national average wage over time?

    Immigration has occurred to an extent that many jobs are now predominately done by immigrants. That really should be a serious warning sign; it has led to a lack of interest in worker exploitation and poverty wages ‘because they are foreigners’. Having a special class of jobs that are too inferior for natives is a throw back to the Victorians having their dirty work done by Irish Catholics.

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    • I have a lot of sympathy with what you are saying (and feeling). The impact of economywide wages – even for low skilled people – is complex (partly because of the demand effects), but I have no doubt that occupations where there has been a lot of immigration will have materially reduced market wages for those roles. The thrust of my macro argument is that generalised high immigration has reduced our overall rates of productivity growth and thus real wage growth, but that is a different channel, and not one formal research has really even addressed.

      The weird thing is – as one business figure put it to me the other day – the govt claims to care about living stds of those at the bottom, but is trying to address that thru the bandaid route (big increases in minimum wages – very badly targeted, as many of the recipients are middle class teenagers and students – which will drive some peripheral people out of the workforce altogether while doing nothing at all about the low-skilled immigrant numbers.

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      • So am I understanding you rightly – all levels of high immigration have potential economic disadvantages. So very hypothetically if this years 70,000 new immigrant workers had all been experienced teachers, doctors, IT staff, engineers and equivalent there would have been a boost in demand in the NZ economy (for homes, cars, consumer goods and services) which in turn would have reduced incentives to increase productivity. Which in the medium and long term is bad for NZ.

        The govt is too divorced from reality. It can understand an hourly wage but not split shifts or minimum hour contracts. As an idea: all the staff who process work visas should be routinely seconded to in the field teams of the labour inspectorate checking actual working conditions (compare with all MacDonalds’ staff from CEO down flipping a few burgers).

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      • I’m arguing a specific case about NZ – that our remoteness and continued natural resource dependence means that large scale immigration is almost inevitably bad for NZers. The short-term excess demand pressures just accentuate the probable downside. I wouldn’t mount the same arguments in Belgium (say).

        In principle, it is plausible that if we screened highly enough, and brought in just say 1000 proven successful entrepreneur types or really creative academics, there might well be net benefits to NZers (the dilution would be very small, and these people would have a great deal to offer – so I’m not doubting the theory of potential productivity gains), altho you’d have to wonder why such people would want to move – and then work, rather than retire – to such a relatively poor (cf other Anglo countries) and distant place. And it simply isn’t credible, to think we could find 10000 such people a year, let alone 40000.

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      • It is rather difficult to reconcile the fact that NZ historically would have had a high of 80% of its population as migrants before that percentage dropped to a low of today of 26% as being “bad” for New Zealanders. Of course at a time when NZ born was considered 3rd class, Maori 2nd class and new british migrants as 1st class under the British Empire, NZ born should feel disadvantaged. However the days it is very much NZ born is treated as 1st class with new migrants as 2nd class there should be no real concerns.

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  4. I strongly agree with your concept that the only definition of skill is earnings. I doubt the bureaucrats will want to lose their power. Categorising the jobs taken by immigrants certainly makes sense but if only to prevent areas of work becoming so dominated that the benefits of diversity are throw out the window.

    The obvious solution to driving low wages even lower is to stop low wage immigration and do it by imposing a fee for employing foreigners. However this would not necessarily eradicate worker exploitation (as the Herald expressed it in a headline about an 30 year old female Indian worker being told “No sex, no visa”). Even $20,000 would not stop dishonest employers forcing desperate immigrant workers to sleep on floors, falsify hours worked and pay artificial rents so Mr Lees-Galloway’s beefed up labour inspectorate would still be active.
    https://www.tvnz.co.nz/one-news/new-zealand/hastings-bp-owner-fined-252-000-keeping-two-immigrant-workers-in-conditions-verging-slavery

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    • The way Auckland Council has now given total power in the hands of private building contractors and private engineers requiring Producer Statements and LBP(Licensed Builder) sign off at each Council Inspection my poor lady project manager has been asked to provide sex to have the building works signed off even after I have been paying the bills to these contractors and Council having already approved the inspections. Auckland Council final documentation process is a real nightmare for developers.

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  5. Yes, I agree enforcement on scandalous things like that is important. Having said that, if work visas (and work rights associated with student visas) were detached from the residence programme, there would be less incentive for people to put up with the exploitation in pursuit of the greater goal (residence points). I’d favour doing both.

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  6. But MBIE seems perennially averse to markets adjusting in ways the generate higher real wages, even though that outcome is one core part of what we look for from a successful economy.
    ………….
    The leftist manipulators at RNZ likewise. On Smart Talk at the Auckland Museum – Immigration Multicultural chief engineer. Paul Spoonley asks “how will businesses in Queenstown get their workers [without immigration]?’

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    • A tourism industry organisation (Tourism Export Council) links to this report by Deloitte
      https://www2.deloitte.com/global/en/pages/about-deloitte/articles/wef-business-case-inclusive-growth.html

      Which links to: Transforming our world: the 2030 Agenda for Sustainable Development (UN)

      They talk about “international law” and human rights and inclusiveness:
      This Agenda is a plan of action for people, planet and prosperity. It also seeks to strengthen universal peace in larger freedom. We recognise that eradicating poverty in all its forms and dimensions, including extreme poverty, is the greatest global challenge and an indispensable requirement for sustainable development. All countries and all stakeholders, acting in collaborative partnership, will implement this plan. We are resolved to free the human race from the tyranny of poverty and want and to heal and secure our planet. We are determined to take the bold and transformative steps which are urgently needed to shift the world onto a sustainable and resilient path.

      So the corporates by buying in benefit from PR but also by focusing on the World they can focus on a bigger picture (even if it is false) while overlooking falling wages at home. I notice both Air NZ and Qantas have brought into their overall agenda in their choice of documentary.

      Unions just aren’t up to any sort of response or are dominated by the types that hang out at The Standard.

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    • Build more accommodation. then people will be able to live and work there.
      Instead of moaning and complaining they should do what they need to do rather than rely on others to prop up their business. Simple realistic business.

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  7. Who ever decided that wage rates in NZ were low. From what I have read we are slightly behind Aussie and higher than most countries.
    I’m sure Micheal will correct me if I am wrong. We are overpaid and over indulged.

    The bus industry is the last of the dinosaurs. The last of the socialist subsidized community in NZ.
    Many years back the transport industry was hide bound by govt. regulation, road distance limits and rules stopping the transport of goods more the 40 miles without a permit from some Govt dept.
    Fortunately for NZ that was tossed out and the transport industry was reborn. That has seen much growth and development of the industry to where it is today. along the way the govt. has reaped the benefit via road taxes and many other benefits.

    Not the bus industry. That is still controlled by the Socialist wankers that run outfits like Regional and local Councils. A couple of years back when talking to then owner of a bus company about traffic woes and the lack of public transport I was amazed to learn that he couldn’t just buy a bus and run a route that suited the customers need at a cost he determined was profitable to his company.

    and there is the nub of the problem.
    These companies are hog tied to the screaming screeching bothersome socialists that spend tax and ratepayers money with no regard to customers needs and no regard to individual enterprise.
    Hence we get behemoths running around on routes that don’t have enough customers to be efficient and pay their way requiring subsidies to operate.
    Its not good for consumers, ratepayers nor taxpayers.

    And it will continue to be a drain on those funds because the companies won’t operate as required by the Socialists with out they get paid to survive. And in that process paying only what wage rate they need to to get by

    What is really needed is for that money to be stopped and the restrictions on bus and taxi companies to be removed and then all entrepreneurs to get cracking and make it work.

    In my town there are no buses before 7 am. No buses that take people from dormitory suburbs to places of work in the early morning. they all go to the town centre which is an irrelevance.

    e.g. one of my staff thought she would see if she could bus to work. !.5 hours against 10 minutes to drive to work. A drive that might take someone in a minivan say 25 minutes picking up on the way.
    Shortly she will be able to use a billion dollar cycle way and ride to work. Probably take her about 25 minutes. Nice on a nice day.

    Until the bus industry is deregulated like the rest of us and doesn’t get fed rate and or taxpayers money it will never be efficient nor will it pay good wages.

    Now last but not least perhaps someone might like to find out what truckies get paid as an hourly rate. I suspect its less then bus drivers.

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    • Who ever decided that wage rates in NZ were low. From what I have read we are slightly behind Aussie and higher than most countries.
      ………………
      But most of the world has a low standard of living thanks to burgeoning populations. Even China will only manage to lift a portion of it’s population out of poverty.

      On the other hand tourists say NZ is expensive.

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  8. Last time i looked the buses in Tauranga recouped somewhere between 20- 30 cents per dollar bus fare. The rate/tax payers paid the rest.

    Scandalous use of resources
    And we wonder why our productivity is so poor.

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    • If I understand it correctly in Auckland buses are paid for with a 50% subsidy by the council (I assume ratepayers). The idea is reasonable – every full bus is taking about 40 cars of the road at times of peak congestion. For example the Northern Busway which cost $300m to build has helped delay the replacement of the Harbour bridge by a couple of decades (maybe $5bn). A good investment.
      While Auckland has doubled in population the CBD has stayed the same size; it is simple maths: you can’t squeeze the vehicles in however many motorways and flyovers and tunnels and built. When I worked in the USA (1980’s) public transport was heavily subsidised in the cities and I guess it still is.
      I travel by Goldcard whenever possible so even a viking will be happy that I’m not doddering along the road in a car in front of him. Excellent use of taxpayers money.

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    • so Christchurch has an overbridge outside Chch Airport and a Southern Motorway. Who does all that serve (which new entrants in the economy)?

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  9. I think you have described perfectly – in a nutshell – what is wrong with our mass migration policy. I would agree with Bob Atkinson that wages are almost certainly being held down for the low paid (certainly in some industries), and the incentive to factor in low wage immigrant wages to your contract bid will likely spread further if the bus companies get away with it.

    Personally I would prefer someone already living here had the opportunity to train to get a heavy vehicle drivers licence, whose likely to be more familiar with NZ roads and rules and who I am sure would be motivated by a higher than minimum wage, certainly motivating and less costly to the taxpayer than being on a benefit.

    A couple of other points I’m wasn’t clear about – I imagine existing bus drivers get annual increases – are experienced bus drivers being dropped for non-experienced ones simply as cost cutting? Finally, where are these hundreds of people going to live? Isn’t there are housing shortage in Auckland?

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    • Matt: if you want a more respected and authoritative supporter for the argument against low-wage inflation try Nobel prize winning economist Paul Krugman.
      “”Immigration is an intensely painful topic for a liberal like myself, because it places basic principles in conflict. Should migration from Mexico to the United States be celebrated, because it helps very poor people find a better life? Or should it be condemned, because it drives down the wages of working Americans and threatens to undermine the welfare state?”” He concluded it does drive down wages. “”Immigration reduces the wages of domestic workers who compete with immigrants. That’s just supply and demand: we’re talking about large increases in the number of low-skill workers relative to other inputs into production, so it’s inevitable that this means a fall in wages””.
      There is something similar published in a report by the NZ Treasury but their website is playing up.
      There are differences between Krugman’s Mexican workers and our low wage immigrants: the former are often illegal immigrants and poor while the latter are legal and middle class in their country of origin.
      Most of the recent low wage immigrants working in Auckland have good English and a strong work ethic; have a conversation with them and they are decent people. However they are serving exactly the same purpose of suppressing wage increases.

      Liked by 1 person

  10. I don’t know any tour bus drivers who switch to urban buses to be around home. Instead they drive concrete trucks or other trucks (although it is a different skill set).

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  11. Surprise

    This article is a demonstration of the myriad components that influence a topic

    Would have thought that one of the topmost issues would be the “cost of living” for a new arrival “skilled visa” bus driver, landing on the doorstep of Auckland and surviving on $20.20 per hour.

    A matrix table of the (basic) weekly cost of living for
    (a) a single driver renting a room
    (b) a family driver renting rooms
    (c) a family driver plus family renting an apartment plus power
    (d) a family driver plus family renting a house plus power

    Can it be done?

    Will the employing company have to provide or subsidise relocation costs? I doubt it is even a workable proposition. I suspect Ritchies have reached for the “import a migrant” stick without bench-testing their model

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