The Times Australia
Business and Money

Up to one in six recent migrants are paid less than the minimum wage. Here’s why

  • Written by Brendan Coates, Program Director, Economic Policy, Grattan Institute
Up to one in six recent migrants are paid less than the minimum wage. Here’s why

From working 20 to 30 hours[1] of unpaid overtime each week in one of Australia’s fanciest restaurants to picking fruit while being exposed to dangerous chemicals for less than $10 an hour[2], the underpayment of migrant workers is rife.

The Grattan Institute’s new report, Short-changed: How to stop the exploitation of migrant workers in Australia[3], show a broad pattern.

We’ve used two nationally representative Australian Bureau of Statistics surveys of employees and employers – Characteristics of Employment[4] and Employee Earnings and Hours[5] – to find out whether employees are paid below the national minimum hourly wage in Australia, currently $21.38 an hour or $26.73 an hour for casuals[6].

We estimate that recent migrants – those who arrived in Australia within the past five years – are twice as likely to be underpaid as migrants who have been in Australia for at least 10 years, and those born here.

Underpayment is widespread

In 2022, 5% to 16% of employed recent migrants were paid less than the national minimum wage. Between 1% and 8.5% of recent migrants were paid at least $3 less than the hourly minimum.

This compares with 3% to 9% of all employees in Australia being paid below the national minimum wage; with 0.5% to 4.5% paid at least $3 an hour less. These numbers are likely to under-represent the extent of underpayment because our analysis only counts those being paid less than the national minimum wage. It does not count cases where workers are underpaid against appropriate award rates, which typically pay more than the national minimum wage, penalty rates, or are not paid their superannuation. Factors contributing to exploitation Part of reason recent migrants are more likely to be underpaid is because they tend to work in industries where underpayment is more prevalent, such as hospitality and agriculture. For example, temporary visa holders account for nearly 20% of workers in hospitality, the industry with the highest reported rate of underpayment.
Migrants also tend to be younger workers. Employees aged 20 to 29 are nearly six times more likely to be paid less than the national minimum wage than workers aged 30 to 39. But even after accounting for age, industry and other demographic characteristics, migrants are still more likely to be underpaid. Migrants who arrived in the past five years are 40% more likely to be underpaid than long-term residents with similar skills working in the same job with the same characteristics. Migrants who arrived five to nine years ago are 20% more likely to be underpaid. Several things explain this. First are visa rules, which make temporary visa holders more vulnerable to exploitation. For example, many international students put up with mistreatment for fear their visa may be cancelled for working more hours than permitted by their visa rules. Two-thirds of recent migrants are on a temporary visa[7]. Migrants have less bargaining power than local workers, partly because they have small social networks to help them find a job. They may not know what workplace rights they are entitled to and face discrimination in the labour market. Read more: What's in a name? How recruitment discriminates against 'foreign' applicants[8] Our analysis shows the likelihood of underpayment is also higher among those working less-skilled jobs with fewer qualifications. Without change, underpayment will rise again Rates of underpayment for migrant workers and locals alike have fallen since the pandemic began In 2018, 8% to 22% of recent migrants were paid less than the minimum hourly wage (compared with 5% to 16% in 2022). This probably reflects the decline in the number of temporary visa holders living in Australia, especially students and working holiday makers, and labour shortages boosting worker’s bargaining power. But with borders open again and temporary visa holders coming back in big numbers[9], the rate of underpayment seems sure to rise again without action from government to stamp out exploitation. The federal government needs to reform the visa rules that make migrants vulnerable, boost resources to enforce workplace and migration laws and make it easier for migrants to claim money owed. Underpayment has been widespread for too long. Now is the time to put a stop to it. Read more: How to improve the migration system for the good of temporary migrants – and Australia[10] References^ 20 to 30 hours (www.smh.com.au)^ less than $10 an hour (www.smh.com.au)^ Short-changed: How to stop the exploitation of migrant workers in Australia (grattan.edu.au)^ Characteristics of Employment (www.abs.gov.au)^ Employee Earnings and Hours (www.abs.gov.au)^ $21.38 an hour or $26.73 an hour for casuals (www.fairwork.gov.au)^ Two-thirds of recent migrants are on a temporary visa (grattan.edu.au)^ What's in a name? How recruitment discriminates against 'foreign' applicants (theconversation.com)^ temporary visa holders coming back in big numbers (www.theaustralian.com.au)^ How to improve the migration system for the good of temporary migrants – and Australia (theconversation.com)Authors: Brendan Coates, Program Director, Economic Policy, Grattan Institute

Read more https://theconversation.com/up-to-one-in-six-recent-migrants-are-paid-less-than-the-minimum-wage-heres-why-206067

Business Times

Agentforce for Financial Services: Merging AI and Human Expertise…

In this rapidly evolving world of financial services, deploying customer experiences that are personalized and intelligen...

Samsara Eco and lululemon announce 10 year partnership

lululemon and Samsara Eco Announce 10-Year Plan to Advance Recycled Material Portfolio Plan will see lululemon source a...

Barelli Bathrooms announces celebrity interior designer Kellie Ri…

Barelli Bathrooms, a leading name in contemporary bathroom accessories and design, is proud to announce its new national ...

The Times Features

The Role of Your GP in Creating a Chronic Disease Management Plan That Works

Living with a long-term condition, whether that is diabetes, asthma, arthritis or heart disease, means making hundreds of small decisions every day. You plan your diet against m...

Troubleshooting Flickering Lights: A Comprehensive Guide for Homeowners

Image by rawpixel.com on Freepik Effectively addressing flickering lights in your home is more than just a matter of convenience; it's a pivotal aspect of both home safety and en...

My shins hurt after running. Could it be shin splints?

If you’ve started running for the first time, started again after a break, or your workout is more intense, you might have felt it. A dull, nagging ache down your shins after...

Metal Roof Replacement Cost Per Square Metre in 2025: A Comprehensive Guide for Australian Homeowners

In recent years, the trend of installing metal roofs has surged across Australia. With their reputation for being both robust and visually appealing, it's easy to understand thei...

Why You’re Always Adjusting Your Bra — and What to Do Instead

Image by freepik It starts with a gentle tug, then a subtle shift, and before you know it, you're adjusting your bra again — in the middle of work, at dinner, even on the couch. I...

How to Tell If Your Eyes Are Working Harder Than They Should Be

Image by freepik Most of us take our vision for granted—until it starts to let us down. Whether it's squinting at your phone, rubbing your eyes at the end of the day, or feeling ...