Opinion & Commentary
Pacific guests invited over our unemployed
The announcement that Australia is inaugurating a ‘guest worker’ scheme for Pacific islanders to pick fruit in Australia will earn Prime Minister Rudd a warm welcome at the Pacific Island Forum meeting in Nuie this week.
A ‘guest worker’ scheme has been strongly pushed by the World Bank as a win-win solution for Australian farmers and the South Pacific, and has the backing from the Australian Farmers Federation. But perhaps the loudest acclaim has come from Pacific governments themselves, who rightfully worry about employment opportunities at home for their young and growing populations.
Women in the Pacific are at least employed in subsistence and smallholder gardens. The real problem for the region comes from the army of men that are underemployed in rural areas and unemployment in urban centres because governments have failed to adopt policies that stimulate economic growth.
There are more than two million underemployed and unemployed men in the Pacific as a whole.
More than 100,000 men join the labour force each year. Most do not have any hope of earning an income or having a job in their lifetime. Men well into middle age can be seen languishing in villages and towns, ready recruits for the criminal gangs that help Port Moresby compete with Port-au Prince and Nairobi for the most violent towns in the world.
Papua New Guinea’s economy has only recently managed to grow faster than the pace of its population despite its enormous mineral and timber resources and its rich agricultural lands. As a result of economic mismanagement, Papua New Guinea alone has nearly 1.5 million underemployed and unemployed men.
The scale of the labour market problems in the Pacific suggest that, unless a million or more guest workers were invited, migration will fail to make any inroads into the problem. The only way to make the Pacific stable and prosperous is to pursue economic growth. Migration is not development.
Most of the criticism of the scheme to date comes from the risk of guest workers overstaying, or of health and security risks. This is not a big problem. With the right scheme design, it can be minimised and perhaps avoided altogether. The biggest costs are social. A guest worker scheme would represent a big departure from a highly successful migration policy that has focused on skilled, permanent migrants. There is a risk that like most countries that have pursued guest worker schemes in the past, a dual layered society could emerge, with permanent residents at one end and short term labourers at the other.
There is also something repugnant about bringing in poor neighbours into a rich western country, telling them they can pick our fruit, and then sending them on their way. Why not just invite islanders as permanent migrants to join the many nationalities that migrate to Australia each year? Because there is a risk that if given the freedom to chose their occupation, they might not choose fruit picking. So far from being a liberation of labour, the scheme is a greater exercise in coercion than in liberty.
Since the residency status of workers would depend on their employment status with a single employer, workers would be in a position far more vulnerable than any permanent migrant would ever find themselves. Despite all the protection the government promises, incentives and historical experience are stacked against the workers.
The real economic impact of the scheme will be on long term unemployed Australians. The rural labour shortage is a prime opportunity to amend welfare policy and encourage these workers back into the workforce. Thousands of Aborigines and Torres Strait Islanders living in or near fruit picking areas are a significant component of the long term unemployed Australians, mostly very badly educated. Picking fruit and vegetables represent one of the few job opportunities available. Many Aborigines have been denied these opportunities because a few hours CDEP (Community Development Employment Projects) work and other welfare has made real work unattractive.
It seems unfortunate that while farmers are prepared to pay for half the fares of guest workers from the Pacific, there is no such scheme for paying half the much lower fares of Aborigines from remote communities.
The guest worker scheme will undoubtedly benefit those Pacific Islanders lucky enough to qualify for the initial program. But unless this grows to at least a million people a year, it will have no impact on labour markets in the Pacific. The danger is that the warm glow that has accompanied the announcement of the scheme will serve to endorse the Pacific leaders unwillingness to take the steps that would provide significant farming incomes and jobs in the Pacific.
Helen Hughes and Gaurav Sodhi are economists at the Centre for Independent Studies, their paper The Bipolar Pacific was released by CIS on Thursday.
