Migrant exploitation is in the news often these days, with a shocking article from the New Zealand Herald revealing how two hundred people from South America were forced to beg for food in New Zealand, after having paid thousands of dollars against promises of well-paid jobs in Aotearoa.

The typical reader will probably feel sorry for these uprooted families for an average of 10 seconds, before thinking something along the lines of “Oh well, they should just have stayed in their home countries.”.  Pondering further that such events are rare occurrences driven by particularly nasty individuals rorting a system that is generally fair.

The typical reader couldn’t be more wrong. An article released on the 23rd of August by Stuff journalist Steve Kilgallon reveals how INZ staff tried to warn their managers continually for 12 months that the new Accredited Employer Work Visa (AEWV) system was a recipe for migrant exploitation and abuse, but were systematically ignored.

But it gets worse.

The weak guardrails featured in the AEWV were not even applied, with deputy secretary of immigration Alison McDonald telling staff to skip checks on almost all applications under the scheme. This means that for every application, INZ staff were not checking the employer’s history, greenlighting employers with no hiring history or with history of abuse. INZ staff were not checking whether the job advertised is genuine or could be fulfilled by resident job seekers that applied for the job and finally, INZ staff were not checking whether the migrant worker was fit for the vacancy.

Instead of these checks, they’ve been told to focus on faster processing times. And they delivered. Between the AEWV’s start date in July 2022 and May 2023, 80,576 visas were approved, or almost 300 per day.

Why would INZ cut corners on the application process? What is there for them to gain, apart from the application fee?

INZ depends on the Ministry of Business, Innovation and Employment (MBIE), which is the economy-minded arm of the government. If we rewind the clock back to July 2022, every employer in New Zealand was ‘screaming out for workers’. This was a result of borders being closed due to the pandemic, and one unfortunate consequence was wage inflation: too few workers chasing many jobs. According to Stats NZ, the annual wage increase was 6.8% in June 2022, up from 2.8% the previous year. For the year ended June 2023, it is 6.6%, while the consumer price index climbed 12.5% in the year ended June 2023. One could say that opening the floodgates of immigration was a cheap way to keep wages low compared to general inflation, a win for business owners who are not natural friends of Labour.

Another critical metric ahead of the election is house prices. Residential real estate prices had fallen in 2022 from their late 2021 peak. Migrant workers need to be housed, and this can have the effect of increasing rents and mechanically house prices too. Another win for Kiwi business owners who tend to invest significantly in real estate as well as mom and pop house owners.

Migrant exploitation is an inevitable consequence of an economy that relies on an influx of low-skilled workers to fill positions that residents cannot do because more of them flee overseas each year to seek a better, more affordable lifestyle. In the words of the political economist Bernard Hickey, this is a churn and burn economy and it stifles incentives for businesses to be more productive, because it allows them to just throw more bodies at the problem, consequences be damned. In the coming years, there will be plenty of migrants seeking hospitable shores due to climate change making many parts of the world unlivable. Let us make sure they find well-paid, decent jobs by investing in our real economy and making life more affordable for everyone.

It’s not enough for all of the political parties to denounce migrant exploitation, it’s critical to articulate solutions. The Green Party has been the only party focusing on issues such as decoupling work visas from single employers, extending the migrant exploitation protection visa, more and stable funding for immigration NZ so accreditation checks can be meaningful and unions having a stronger role in working closely with migrant workers.

By Suveen Sanis Walgampola – Auckland