Maybe things are different elsewhere, but in Australia you can hardly read the news or watch TV news reports without hearing about how hard it is for local businesses to recruit staff. And you hear those tales of woe whether unemployment is high or low, in good or in bad times.
After a while, if one pays attention, one realises that kind of story seems to follow a template or a script.
The story always begins with a boss (frequently a mum-and-dad capitalist) claiming that his/her business is currently facing difficulties or even on the verge of collapse – through no fault of his/her own, evidently. It’s all hard luck. This gives a human dimension to the story, it’s meant to make readers feel for our protagonist.
Mercifully, all is not lost … yet. There’s still hope. The “entrepreneur” needs workers pronto.
Alas, local labour supply is either inadequate or not forthcoming.
Frequently, but not always, the story adds the suffering boss’ explanation for that problem. From lazy and pampered to outright dishonest or just unqualified to perform jobs as demanding of qualifications as waiter or barista or fruitpicker, local workers are useless and nowhere to be found.
What the story never misses is the boss’ proposed solution. And because in their tale they are blameless, the solution never involves them. Instead, it always involves the Government and workers.
The particular wish-list may vary in details, but it invariably includes at least one of the following:
- The Government must punish the unemployed on the dole (aka “dole bludgers”), so that they take on any job available, or
- It must “encourage” (or force, if you prefer) some category of locals to take on their job offers (often they have in mind the young, but sometimes they go as far as targeting the pensioners, believe it or not), or
- Bring in temporary foreign workers. The Government must allow employers to “import” (a frequently used word, very appropriate if slightly insulting) visa workers, from either across the Pacific or from other poor countries.
And as soon as people express any doubt, however moderate or qualified or motivated, about that argument – particularly about #3 – the automatic retort invokes racism.
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I have two observations and I suppose astute readers may well have guessed the first one, for it’s entirely obvious: Generally bosses resent Government intervention to regulate their activities. But it’s false to claim they dislike all Government intervention, isn’t it?
Moreover, capitalists preach the gospel of competition … except when competition implies their need to compete to attract workers, by paying higher wages or offering better working conditions or training their workforce.
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Left-leaning readers, I’m sure, will be nodding in agreement.
That may be a little premature for some of them.
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All that sounds remarkably contemporary, doesn’t it? You know, something commentators from the Twitter era enjoy squabbling about.
What may surprise modern readers, particularly those from the identitarian Left, is that the whole thing follows an old script. I found an instance of the same discussion, dating from … 1863.
At the time, the American Civil War had disrupted the world supply of cotton. Prices went through the roof (“from 10 cents a pound in 1860 to [US]$1.89 a pound in 1863-1864”). Worldwide, entrepreneurial spirits rushed to seize the opportunity. A global race to grow cotton started.
Egypt was well placed for that. And over there those intrepid souls were remarkably successful.
Down Under, however, things didn’t go as smoothly. The notoriously difficult weather did not help, one entrepreneur revealed. By far, however, the greatest problem was the inadequate labour supply. He had invested big, but locals didn’t want to work for him on his 1,600 hectare plantation.
He was nothing if not resourceful, however. As an experienced labour importer, he had already imported Chinese and Indian workers a decade or two earlier. So this time he imported German indentured workers. Sadly, much like the coolies earlier, Germans didn’t prove satisfactory. Many (presumably those unencumbered by families), unhappy with their pay and conditions, just left, ran away. Those who for some reason stayed behind were just too lazy and ate too much.
So, while a civil war over slavery was being fought on the other side of the planet, he decided to import more indentured workers, this time from the South Seas islands: They, no doubt, would gladly accept what the Germans had found unacceptable.
Unsurprisingly, the press was critical of his initiative, pressuring the colonial authorties to stop him. That forced our impresario to make his case in what we would call today an open letter to the government. To demonstrate his good intentions, he, on the one hand, guaranteed Pacific Islanders – or Kanakas, as they were also called – one-year work contracts, establishing pay (in money and in kind) and their repatriation at the end of the contract (what we call “visa workers” or “temporary visa workers”). On the other hand, he took pains to make it clear he regarded Kanakas as highly as he regarded his previous imports poorly (contemporary Left-identitarians would have said he “spoke up for Kanakas”).
The word “racism” had not yet been coined, but he effectively accused his accusers of racism (whether fairly or unfairly, I know not), much like today the identitarian liberal/Leftish accuse everybody of racism.
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Chattel slavery in the US and Latin American mould was not found in Australia. That, however, would have provided little comfort to those sentenced to penal transportation to Australian colonies (sometimes for crimes such as stealing a loaf of bread or being trade unionists or asking the right to vote), or the nominally free, but indentured, workers – white and non-white.
Robert Towns was the name of that character (his Townsville statue is shown above); his trade pioneered the practice of blackbirding and, with it, what some call, in practice if not in law, slavery (here, here, and here). (As a curious note, one of Towns’ ships was called “Uncle Tom”. Appropriate, uh?)
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While blackbirding is today a shameful, painful, dark chapter in Australian history, the importation of Pacific Islanders to work in Australian farms continues. Today’s Kanakas are joined by backpackers – of all races, as EEO mandates. Moreover the Commonwealth supports the importation of cheap labour for urban areas as well.
And even if the worst practices associated with 19th-century blackbirding (like kidnapping) are bad memories, 21th-century blackbirding is not free of problems.
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Until recently, the identitarian liberal/Leftish and their strange business bedfellows kept a lid over the subject of immigration and “visa workers”. For good or ill, COVID19 changed that. The ABC’s Gareth Hutchens (business and economics Canberra-based reporter) is right: “This is a topic the RBA (and other economists) have been talking about more in recent months”.
Once again the identitarian liberal/Left was caught with their pants down.
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Update.
15-07-2021. All-too predictably, the combined business/identitarian Left knee-jerk, panicked reaction against Philip Lowe's recent speech on the likely links between cheap migrant labour imports and wages stagnation came swiftly.
After presenting his counter-arguments, John Kehoe – a bloke whose job it is to firmly believe whatever his masters order him to believe – concludes his reply with an appeal to the authority of Ivan Colhoun, from NAB.
Kehoe – apparently without realising what he claims Colhoun says is virtually the same Lowe said – writes: “even if the closed border accelerates the drop in unemployment and pushes up wages, the RBA should treat this as a temporary trend that will correct when migrants return.” (my underlined)
Greg Jericho, identitarian Left spokesman, opens his salvo thusly:
“Last week the head of the Reserve Bank suggested migration could have caused lower wages growth. It was an unfortunate statement that goes against evidence and ignores the many other factors at play.” (my underlined)
This is how Lowe began the section of his speech where overseas workers are considered:
“There are 3 elements of the supply story that I would like to touch on:
- “the rise in labour force participation
- “the ability of firms to tap into overseas labour markets when workers are in short supply in Australia
- “the trend rise in underemployment.”
Greg, breath deeply and count to ten. After that I am sure you will realise that Lowe was talking about much more than foreign workers, yes? If someone is ignoring something, that is you.
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Having said that, I agree that Lowe failed to consider important things (apparently, the word “union” is not a part of Lowe’s vocabulary, for instance). I also agree that unsavoury characters like Mark Latham and Pauline Hanson could capitalise on that.
But it is of vulgar political economists to judge ideas only by thinking who benefits from them. There is something called truth. American heretical Marxists, I am sure, will appreciate that.
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