Letting migrant workers say I quit could cut risk of exploitation

Monday, 15 November 2021

Chinese migrant construction workers tell harrowing stories of being overworked and underpaid.

OPINION: Quitting a bad job can be one of the most empowering things a worker can do. In well-functioning labour markets, workers flock to the good jobs and leave bad employers scrambling to fill vacancies.

Quitting is such an empowering act, that even leaving a decent job has its perks, offering workers the opportunity to earn more, or find jobs that better match their skills and qualifications. It’s about exercising choice.

The ability to easily move jobs rewards good employers, penalises bad employers, improves worker wellbeing, and can lead to improved productivity and a higher-wage economy.

It might seem curious, then, that for some migrants, staying with the same employer is a condition of their visa status. The practice – often referred to as tying a migrant to an employer – makes it difficult for migrants to change jobs if they are being exploited, and almost impossible to change jobs if they simply want to improve their lot.

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“The Productivity Commission recommends removing conditions that tie temporary workers to a specific employer.”

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Chinese migrant construction worker Gao Litong has taken his employer to the Employment Relations Authority for hundreds of hours of unpaid labour.

The Productivity Commission recently released its preliminary findings and recommendations for our immigration inquiry. During the course of our inquiry, we heard a range of views from migrants, businesses and unions.

But on one issue, there appears to be a consensus: tying migrants to a single employer increases the risk of migrant exploitation.

All employment relationships are characterised by an imbalance of bargaining power, where workers typically have lower bargaining power than employers. Migrants on tied visas are at heightened risk of exploitation as they are dependent on their employer not only for their livelihood, but their right to stay in New Zealand.

Ganesh Nana: the Productivity Commission has “found little evidence that, on average, migrants are driving down the wages of locals.”

So why does this practice continue?

Different immigration visas confer different sets of rights for migrants, including whom they can work for. Some visas are employer-assisted, where the visa conditions require a migrant to work for a specified employer, in a specified region and in a specified occupation.

Employer-assisted visas could reduce the risk of migrants “competing” with local workers in lower skilled jobs, by verifying whether the employer has made efforts to employ local workers first. The theory here is that migrants working in lower skilled occupations are more likely to compete with locals for jobs, lowering wages and working conditions. Another risk is that such migrants would be more difficult to “track” in the immigration system.

Regardless of the perceived risks, the same theoretical worries also exist for migrants on open work visas. Migrants on working holiday visas, student visas, and partner-related visas aren’t restricted in their ability to work in low-skilled occupations. While protecting local workers’ employment and wages is important, tying migrants to a single employer is not the answer.

Here’s an important finding from the Commission’s inquiry that is relevant to this issue: we have found little evidence that, on average, migrants are driving down the wages of locals. What we know is that in recent years, migrants increasingly filled vacancies in lower-skilled jobs. Yet in the period leading up to the pandemic, the job numbers were buoyant, with low unemployment and increasing rates of workers participating in job-related education and training.

If anything, there is a risk that tying migrants to an employer may entrench poor wages and conditions for migrants and locals alike as migrants can’t vote with their feet; and employers have little incentive to offer good wages and conditions to attract and retain local workers, or improve productivity.

The prevalence of migrant exploitation is not exactly a new discovery. The Ministry for Business, Innovation and Employment has conducted a comprehensive review of temporary migrant worker exploitation, and Parliament’s Education and Workforce Committee has also opened an inquiry on the topic.

A wide range of changes are being introduced to deal with the issue of migrant exploitation, including introducing a specific six-month visa to allow migrants to leave exploitative situations and remain in the country. But the effectiveness of that option relies on both migrants and immigration officials being able to overcome administrative hurdles.

The Productivity Commission recommends removing conditions that tie temporary workers to a specific employer. It is the missing tool in the toolbox to reduce the risk of migrant exploitation, and it makes economic sense too. Where there are real risks of displacing local workers, work rights could be limited to specific regions, occupations, industries or accredited employers.

If you want employers to step up their game in their treatment of migrant and local workers alike, let workers expose who the good and bad employers are.

Dr Ganesh Nana is the Chair of the Productivity Commission, and Jenesa Jeram is a senior advisor.