Impacts of a dependence on backpackers and other foreigners on farm labour during a crisis
In the midst of the 2020 pandemic there's been a massive reduction in the number of people who are able to travel around.
One of the big issues that is looming is what to do with food production in Australia. I was watching a show earlier today about how people were dealing with the pandemic and the ways in which it was affecting them. The clear message was that there has been an enormous amount of unemployment and a lot of people are really struggling to get work. Many businesses are now insolvent but are still operating only because the government has suspended the trading while insolvent laws. Later on in that same show some farmers were talking about how they might not be able to get enough people to pick fruit because there's not enough backpackers to do it. For those not familiar with the Australian situation, Australia has built up a massive dependence on foreign labour for farming labour and even a during a crisis that's completely shut down the borders some people aren't rethinking their dependence on backpackers to do their work.
I have to say this specific attitude and the system that props it up has always annoyed me greatly but tonight I was more angry than usual when hearing this yet again. Honestly farmers get screwed badly by this system and have exceedingly small margins, even when retail food outlets jack up their prices farmers still can be doing it very tough. The average person who might be angry at farmers exploiting cheap labour probably don't realize how little a percentage the farmers are getting paid out of the retail price of the food, some call this the farm crisis. As a response to this relentless pressure it's going to be very tempting for farmers to hire foreign labour if the alternative is going broke. The fact that things have got to this point are incredibly depressing, if the system was fixed such that farmers were paid more and therefore had more capacity to deal with unexpected problems as they arose we probably wouldn't be where we are now. But one thing that's especially annoying is that in a time of perhaps the highest unemployment in Australian history there are people that have the gall to complain about a potential lack of workers. Seriously? Maybe for them the issue isn't a skills shortage but rather a sucker shortage?
Initially this issue came down to the fact that over the years a lot of people wanted to pay as little as possible in wages to their workers. So schemes came about that would give visa benefits to people conditional upon them working on farms. As time went on these schemes got more entrenched because they were a source of cheap and available labour. Because you could pay these foreigners less than local market rates a bigger and bigger reliance on foreign farm workers was created. Importantly this visa pathway is effectively non-monetary compensation, which is exceedingly valuable to foreign workers who want to get those immigration benefits. Immigrants have done all sorts of things to come to Australia over the years so putting up with somewhat bad working conditions is in comparison far easier than some things people may otherwise try. But what this does is strongly disadvantage citizens (relative to non-citizens) trying to find work in this industry. If you are already a citizen you get no additional utility from a visa program like this because the reward of permanent residence is something you already have so therefore you get no effective wage subsidy. Unfortunately as time goes on people have got more and more used to seeing foreign labour on farms and are starting to forget the real reasons why this is the case.
When this supply of below-market-rate foreign labour completely dries up, because lets say you get a global pandemic that results in a complete closure of the borders to foreigners, a labour issue now suddenly turns into a serious food security issue. The solution in any other time would be to pay market rate for finding the labour and then you'd get the workers you needed. But it's even easier than normal times because in 2020 because many people are unemployed and are desperate to work, so just fucking hire them. And before anyone says there's not enough money available to pay the locals market rate please stop to consider the enormous amounts of stimulus money that's being handed out everywhere to deal with other aspects of this crisis. Even before the dumpster fire scenario of 2020 I knew a lot of locals who would have happily worked on farms, I say this because they did work on farms (I even briefly picked fruit during a summer when I was younger). But I'm not sure that they would actually have got hired by many in this new era of foreign worker visa wage arbitrage. Sure some of this is not the most glamourous work, but it sure isn't the worst either1, in any case I'd take fruit picking over unemployment as long as the arrangement wasn't abusive and followed the local laws. And a lot of other people would take this work too, especially now. But there's issues for locals who might want to take this work up, what if their taxes show they are paid less than minimum wage? Even if locals wanted to take up this illegal work option then tax auditing could reval their illegally low pay which can then turn into a liability to the employer who is now actively disincentivised from hiring the locals. More about the excuses used to justify not hiring locals in a moment.
We see this same problematic dynamic come up WORLDWIDE in every industry across ALL skill levels where closed job visas represent a large enough proportion of that workforce in that location. This is not limited to just farming and other low paid labour, it's a huge problem in tech too which is a typically higher paid industry. When visa benefits are very beneficial it attracts foreigners who will tolerate work at rates below the local legal rate for the job and who will even tolerate illegal working arrangements in order to ensure their immigration benefits. A very convenient narrative to cover this abusive situation is to call the locals "lazy" and "entitled" and any to use any other smearing you can get away with to justify why you don't hire locals. You just want to make sure that under no circumstances does the company let on any "inconvenient truths" like paying less than the legal minimum wage and using the visa status as a blackmailing tool to do so). And given that people earning wages are the most underpaid they have been in decades while the economy was supposedly "booming" a lot of people who aren't desperate to get a visa will basically tell you "to take your job and shove it" if you offer less than the already suppressed market rate for wages. If people feel like they are badly getting taken advantage of then they won't take jobs even at whatever the prevailing market rate for that job is. This rejection of jobs in contravention of local labour laws is not complacency or laziness on the behalf of workers. If the labour share of the economy wasn't so pitifully low then the average person would be earning a lot more money and there would be a lot more entry level interest from locals in jobs like fruit picking. People who feel like they are actually getting included in the economic rewards of feeding their nation are often quite happy to do that work. Even in completely shit jobs you'll find workers if you pay enough. Because the labour share of the economy is so low we see situations where a lot of jobs are bunched up at the minimum-wage lower bound (not to mention lots of "innovations" like the gig economy to avoid those pesky legal obligations of the minimum wage laws). When wages are up against the minimum-wage lower bound if the choice is between two jobs at minimum wage it's no doubt that people will pick the most convenient one. Considering that most people live in urban areas these days getting people to move to rural areas to do farming will not win out over other minimum wage jobs that don't require a potentially long distance relocation.
Food security matters far too much to let this situation continue on, if we can't get enough people to work on farms despite one of the highest level of unemployment in Australian history something structurally is very wrong. A starving country is a weak country, hopefully we don't need a literal famine to get us to fix this deeply broken system.
There's a lot of jobs that are far worse than picking fruit out there but people still do these jobs. ↩