Mike Munro: The workers are heading our way

New Zealand had a net migration loss in the year to March, but Treasury is now forecasting a rebound. Photo / Michael Craig

Opinion

OPINION:

In the daily battle for media space, a chorus of complaints about worker shortages is always going to prevail over the rollout of a new regulatory regime aimed at helping fix the problem.

That is the nature of the news business.

Stories of human suffering — and there are plenty of them in our stressed workplaces at present — trump everything else.

But given the labour shortages, the new immigration settings for migrant workers which took effect on July 4 without any fanfare are a big deal.

They should go a considerable way to increasing the available pool of labour urgently needed to fill skill shortages.

For businesses, the new rules are highly facilitative. Put simply, employers will need to be accredited and to have completed a job check — that includes providing evidence of an acceptable job offer and employment agreement — before hiring a worker from offshore.

But a key requirement is that employers wishing to hire migrants for most roles will, with a few exceptions, need to pay them an amount pegged to the median wage, currently $27.76 an hour.

That condition is already causing some to wince. The Employers & Manufacturers Association business lobby this week suggested that we should be allowing skilled "but lower paid" migrant workers into the country, while New Zealanders are upskilled to fill the gaps.

This tells us the EMA is still deaf to the Government's message about stopping the exploitation of migrant workers.

The new settings are about treating workers — whether they are New Zealanders or migrant hires — with fairness, and recognising the value of their work. As with Fair Pay Agreements, which will put a floor under workers' pay and conditions, it's what you would expect from a Labour Government, right?

The new immigration regime, which hangs on a simplified Accredited Employer Work Visa (AEWV) policy, probably cannot come soon enough, given the mounting alarm over workforce gaps. Employers seem to think so. Accreditation applications opened on May 23, well ahead of the July 4 go-live date, and already about 4500 have been approved.

It is an established fact that immigration increases when the economy is hit by labour shortages. So when the flow of migrants picks up, as it inevitably will, the Government is ensuring we have immigration settings that work for New Zealand — that is, contributing to the economy, treating people fairly and enriching communities.

And immigration will increase. In the year to March this year, New Zealand experienced a net migration loss of nearly 7000 people, but Treasury is now forecasting a bounce-back that will see a net gain of 40,000 by 2026.

In the meantime, we soldier on with a job market that is tighter than at any time in living memory.

Reports of worker shortages have become a daily dirge.

Embattled health bosses fear that a "catastrophic collapse" of the workforce is taking place just as Covid-19 patient numbers peak. And an EMA survey of 335 member businesses found that every employer seeking staff was "struggling" to find anyone, with almost 40 per cent reporting they'd been advertising for staff for more than six months.

It's not just here that job vacancies are scaling new heights.

In Australia there is talk of an acute labour crunch. National Australia Bank's latest quarterly survey showed a record 85 per cent of businesses reporting staff shortages, prompting calls to ramp up migration levels.

In the UK, too, job vacancy numbers are so bad that industries have warned that they are struggling to maintain operations because of pandemic-related upheaval and a post-Brexit exodus of European workers.

And Canada's national statistics agency has found that two-thirds of businesses in accommodation and food services will experience labour shortages during the northern summer.

There is another interesting angle to these workforce woes. It is the extent to which the fallout from Covid-19 has disrupted attitudes to work. And not just because of sickness or anxiety about catching the virus as restrictions ease.

In Britain — and perhaps the same is true of New Zealand — there is anecdotal evidence that the pandemic prompted many people to review the satisfaction they get from work.
Increasingly, people are opting for a hybrid working week, freelancing or even taking early retirement, as wellbeing is accorded a greater priority.

This shouldn't come as a surprise. The pandemic has been a traumatic experience for many, and a degree of self-reassessment is to be expected.

This is alluded to in a study by Wellington-based economic consultancy Berl on how Covid-19 has changed New Zealand's labour force.

Drawing on data from the Household Labour Force Survey, the official measure of employment, Berl concluded that there's a cohort of New Zealanders who ceased to be unemployed but have not necessarily moved into jobs.

They have simply stopped looking.

But one thing that is guaranteed is that people from other lands will come looking for work opportunities — in fact they already are. Immigration New Zealand is gearing up for what is expected to be heavy demand.

What those applying for work visas will find is that the New Zealand Government does not want to lurch back to the pre-pandemic world of over-reliance on — and exploitation of — low-skilled workers from abroad.

Those on temporary work visas once made up 5 per cent of the workforce, the highest in the OECD, and increasingly they were low-skilled and poorly paid.

The aim is to shift the balance so that New Zealand can attract migrant workers on the basis of skill and need. It's not just an admirable goal but also a necessary one in a world where competition for labour is intense.

It's now over to employers. They can no longer expect to rely on a business model based on low wages, the so-called race to the bottom.

It's time for them to get with the programme.

- Mike Munro is a former chief of staff for Jacinda Ardern and was chief press secretary for Helen Clark.