Over the decade leading up to COVID, the exploitation of international students became systemic across the Australian economy.
Multiple reports bemoaned the rampant wage theft from international students, especially from migrant employers of the same nationality.
For example, the 2016 Senate Committee report, A National Disgrace: The Exploitation of Temporary Work Visa Holders, noted that international students “were consistently reported to suffer widespread exploitation in the Australian workforce”, and that “a large portion of the hours that international students worked was undocumented (and unpaid)”.
The 2018 book, The Wage Crisis in Australia similarly noted that international students are vulnerable to exploitation as they “see themselves as involved in a project of ‘staggered’ or ‘multi-step’ migration”. The book’s analysis claimed around two-thirds of international students were paid below the minimum wage, with one-quarter earning $12/hour or less and 43% of students earning $15/hour or less.
And in 2019, the Report of the Migrant Workers’ Taskforce found that about one-quarter of international students were paid around half the legal minimum wage, with exploitation of international students labelled “endemic”.
It seems the pandemic has done little to stem the exploitation, with international students continuing to report widespread wage theft:
Kajal Limbachiya says she would sometimes sleep on the couch at the Indian restaurant where she worked when she had insufficient breaks between her shifts…
For $10 an hour she worked day and night shifts, doing a range of tasks including cooking, waitressing, and other odd jobs…
Ms Limbachiya was also struggling financially because her employer wasn’t paying her properly — she was owed nearly $15,000 in wages and superannuation when the pandemic hit in March…
Vaishnavi Lella and Vineeth Kuddigana also worked at the Indian restaurant in early 2020 and were underpaid.
Like Ms Limbachiya, Ms Lella had verbally agreed to be paid $10 per hour, less than the minimum wage, because it was hard to find work at the time…
JobWatch’s principal lawyer Gabrielle Marchetti is no stranger to tracking down “unscrupulous employers”, as she calls them.
Former immigration department deputy secretary, Abul Rizvi, warned that recent visa changes allowing international students to work for unlimited hours could worsen exploitation:
Dr Rizvi has warned that the recent removal of limits on overseas students’ working hours risks subverting international education and reviving the problems of over a decade ago, when enrolments were motivated by migration and work opportunities rather than course quality.
He said foreign students were increasingly competing for low-skilled jobs with backpackers, Pacific Island agricultural labourers and “trafficked asylum seekers”, amid rampant exploitation and wage theft…
Dr Rizvi said international education was being undermined by the poaching of students and worker exploitation that had “overwhelmed” the Fair Work Ombudsman…
“We now have students with unlimited work rights in tourism, hospitality, retail and agriculture,” Dr Rizvi said. “That is a fundamental change to Australian society. It’s a fundamental change I thought Australia would never make.”
Rizvi also noted that there has been a surge in Nepalese students coming to Australia for work rather than study:
The most interesting development in March 2022 was the increase in offshore student visa applications from Nepalese students. In March 2022, there were 4,788 offshore student applications from Nepal compared to 3,930 from China and 3,483 from India.
The key risk will be if the strong demand from Nepal is a response to the unlimited work rights now available to those on Australian student visas compared to our main competitors. If that is the case, we may see large numbers of Nepalese students switching from tier one Australian education providers to tier two and three providers who offer cheaper courses, less pressure on studying and more freedom to work in multiple jobs.
Meanwhile, International Education Association of Australia (IEAA) chief executive Phil Honeywood is concerned that allowing unlimited work hours would entice students to prioritise work over study:
[Honeywood said] this would equate to a full semester of many international students being under family pressure to work over 100 hours a week not just to support themselves, but to send money back home.
“The national regulators are no doubt keeping a watchful eye on the academic progress implications of students being compromised by paid employment pressures,” said Honeywood.
Australian policy makers should target a smaller intake of higher quality international students by:
- Raising entry standards (particularly English-language proficiency);
- Raising financial requirements needed to enter Australia; and
- Removing the explicit link between studying, work rights and permanent residency.
These reforms would lift student quality, since most would come to Australia for the primary purpose of studying, rather than to gain backdoor working rights with the hope of transitioning to permanent residency.
They would raise genuine export revenues per student, given tuition fees and living expenses would be paid for by funds from abroad, rather than from money earned in Australia.
They would remove competition in the labour market, improving job prospects for young Australians, while also reducing wage theft and exploitation.
They would also reduce enrolment numbers to sensible and sustainable levels commensurate with international norms.
Sadly, our rent-seeking edu-migration industry would oppose moves to lift entry/financial requirements, because it would make gaining a student visa more difficult and stem the flow of fees.
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also Chief Economist and co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
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