Should organisations that use the 457 visa program be publicly named?

tl;dr Yes. Where enough risk lurks, public disclosure can help mitigate.

In the United States, this isn’t a complex question. Engagement with the government is liable to public disclosure. A derivative of freedom of speech, this penetrates across all levels of government. For example, the U.S. public doesn’t only know who sponsors migrants but how many each firm sponsors and at what wage. This public accountability feeds directly into the public debate about skilled migration in the U.S.

In Australia, a default public disclosure culture does not exist. Privacy – even for employers – is often embedded deep within public organisations and governments. This can be seen from our Freedom of Information framework and the lack of open data compared to many other countries.

For many situations, Australian governments of both stripes will go a long way to protect individuals from even a minimal risk of harm. This can be a positive. The abusive ex-lover. A vengeful employer. There is a litany of reasons why privacy is important across government portfolios from an individual point of view. In the U.S., the names of sponsored migrants are not released.

Yet when this privacy is conferred on for-profit organisations, we need to acknowledge the differences. An employer is not a person (with the tricky exception of the self-employed).

There are good reasons for employers not disclosing everything they do. Trade secrets promote innovation. Operational and policy work, particularly for firms which compete internationally, is the bread and butter of revenues and profits.

When interacting with government, employers sometimes have strong foundations for privacy. Procurement is such an example. Employers bid for government contracts and provide a large amount of sensitive commercial information in the process. This becomes ‘commercial-in-confidence’ and the government is obliged to keep it out of the public eye. In most situations, this makes government procurement run more smoothly than it otherwise would (however I would note the government has a large bargaining chip with its procurement and often fails to utilise this effectively).

Away from procurement and matters such as payroll tax, the notion of commercial-in-confidence becomes harder to sustain.

One example is employers using sponsored visas.

At the moment, we know very little about the 457 visa program.

We don’t know which companies hire 457 visa holders but we know over 35,000 do.

We don’t know how many workers each firm hires, except in the aggregate.

We don’t know what jobs they are hired to perform, except in the aggregate.

What we do know – aggregate descriptive statistics and some detailed non-firm specific survey research – speaks about the program but this information is not of the program.

Because of what we do not know, further knowledge is stymied such as how firms operate in labour markets under certain conditions and environments. This stifles policy making, amongst other things.

On this matter of disclosure, I think the question should be: does the benefit of this information being made public outweigh potential costs to the employers? Here is my attempt to outline various positions one could take.

The benefits of disclosure (from strongest arguments to weakest)

Research: Current research on temporary skilled migration in Australia is poor compared to what occurs in the U.S. where disclosure occurs. Some excellent examples are Michael Clemens on wages, Peri, Shih and Sparbar on productivity and Jansen and Piermartini on trade flows. All of these pieces used freely available U.S. temporary skilled visa data to provide valuable insights. In Australia, researchers must pass multiple barriers just to access anything better than basic aggregates. There is no detailed employer-specific information. This hurts analysis on understanding the effects of migration on the labour market and other economic concepts and restricts the ability to undertake qualitative research. The long-term opportunity cost is large for migrants, employers and policy-makers.

Risks to migrants: There is an inherent risk in being a sponsored migrant. Labour market mobility is heavy restricted to achieve policy goals. In the vast majority of cases, this is not a major impediment (approximately 5 per cent of migrants surveyed say their employer does not meet their obligations). However for the small minority of migrants where this causes major employment issues, vulnerability to exploitation is raised by excessive privacy. Publicly disclosing the names of employers mitigates this risk of exploitation by allowing non-government individuals and organisations to better intervene on behalf of migrants.

Cheaper government monitoring: Monitoring visa compliance is expensive and difficult. There is also an argument to be made we are not very good at it. Currently if government is unable to undertake monitoring activity, then it does not occur. By disclosing the names of employers who use the 457 visa program, other actors can generate accountability. The media, migrant support organisations, unions and other employers will use this information to ensure legislative conditions are being met by specific employers. This may only help at the margins but the cost associated with disclosure (in financial terms at least) is near zero meaning any marginal assistance on enforcement is likely beneficial.

Risks to Australian workers: There is a more diffuse risk to Australian workers. While skilled migrants on 457 visas in are beneficial to average Australian wages and probably beneficial to the aggregate number of jobs, it is likely a minority of individual employers will seek to exploit migrants on 457 visas, impacting Australian wages and conditions in that particular workplace and possibly in that local labour market. By publicly releasing the names of employers who use the 457 visa program, this behaviour is less likely to occur at the margins given workers in the labour market have access to more information.

The costs of disclosure (from strongest to weakest)

Public targeting of employers and misinformation: Undoubtedly the largest potential cost is specific employers being targeted because they employ people on 457 visas. Misinformation about how this occurs, combined with a visceral public reaction, will likely lead to individual examples of companies being harassed. The media will chase populist stories. In extreme circumstances, this may lead to tense situations where employers are placed in untenable positions and react to public opinion rashly, thereby hurting migrants and possibly other Australian workers. This may all occur despite employers meeting all their legal obligations.

Impact on employers (I): As an employee, we don’t know the intimate financial details about a firm. We can look up their annual report and similar information shareholders might use (if a public company). We can sniff around if its a local gig. Therefore we shouldn’t have intimate details about a firm’s labour policy, including where their workers come from. In a tight labour market, where employees have choice and more power, individuals may actively seek to avoid companies who employ 457 visa holders (akin to the ‘Buy Australian’ campaigns). In combination with a broader populist campaign, this could result in more negative employment environments where people on 457 visas work.

Impact on employers (II): More public information of any type tilts employment negotiations towards employees. Using publicly available data about migrant workers, workplace negotiators and unions will bargain differently. This may lead to positives for existing employees but as an employer, this would be a negative. Also, one can imagine new bargaining strategies around proportions of Australian workers and stipulations about migrants (in the aggregate) within employment agreements. This is by no means certain and may play out in the background of any negotiations but it is not impossible to imagine how this could work.

(Note: there are other arguments and counter-arguments to those listed above but I think these are the main considerations)

I do not consider the cost arguments strongly, apart from the first. I’m sure others can make them more persuasively than I have.

I also believe as we are discussing a potential public good, the onus for privacy should fall on employers, not on the government. Currently, this is very much not the case.

Thinking about this, I keep coming back to the benefits of open source information. The OECD migration report for 2002 accurately identifies ‘market signals’ being dampened by poor or unreliable information in labour markets, which negatively affects workers, industry, employers and education and training institutions. This benefit is difficult to quantify but undoubtedly it exists.

In conclusion, I see a strong net benefit for the public, migrants and even employers in releasing more detailed information about how sponsors use the 457 visa program. This would need to be done with the necessary privacy controls for migrants and should occur carefully given the potential risks.

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