16 Dec Seasonal workers’ important NZ role
It’s time to start giving credit to the seasonal pickers, packers and pruners for the role they play in our economy, writes the University of Waikato’s John Gibson.
The Government recently announced increases in the cap for visas under the Recognised Seasonal Employer (RSE) scheme. After the second increase, the scheme will allow up to 16,000 workers to come in the 2020/21 season. These seasonal workers are mainly from the Pacific, and come to pick and pack fruit, to prune, and to carry out other labour-intensive tasks in the horticulture and viticulture industries.
This increase comes as the kiwifruit industry faces the possibility of fruit rotting on the vines if there are not enough workers to pick it. And they aren’t the only export industry facing a shortage. In February, a lack of workers for the 2019 Hawkes Bay apple harvest led the Ministry of Social Development to declare a seasonal labour shortage in the region. This was then extended in April alongside news of a new shortage in the Bay of Plenty.
No doubt the cap increases sparked arguments about ‘foreigners taking Kiwi jobs’ and raised questions about the benefits of various immigration programmes to New Zealand.
But in reality, the RSE has been a good thing for our country
Seasonal workers have helped the horticulture and wine industries to expand and have enabled our exports to grow. And given that RSE employers are obliged to show that no New Zealanders are available for the work, I’m not sure if these sectors could have grown to where they are today without the help of our overseas friends.
In fact, 89 precent of employers report that the expansion in their operations that the RSE has enabled has also let them create more job opportunities for New Zealanders. So, it is wrong to think of these seasonal migrant workers as ‘taking away jobs.’
As for other common arguments based on concerns about scarcity and congestion, we shouldn’t forget that for the few months that RSE workers are here, they are based in the regions. Consequently, they likely place less pressure on infrastructure than is the case of migrants who settle in Auckland or other rapidly-growing cities.
Moreover, there’s evidence that more local jobs are created in the regions as the seasonal labour force swells. A good example is the tens of millions of dollars that the Hawkes Bay apple industry is investing in housing for staff in line with their employer obligation to provide suitable worker accommodation. Construction jobs will grow on the back of this injection.
Seasonal work also helps the countries that supply workers
My colleagues and I have been investigating the impacts of the RSE since it was introduced in 2007. This research was supported by the World Bank and other international and domestic agencies. Initially, we focused on what happened to households and communities in the countries supplying workers, especially Tonga and Vanuatu. We found that the impact in these island countries was significant – entailing increases of 30 percent or more in measures of monetary welfare alongside large gains in several non-monetary measures. These impacts are much greater than for other rigorously-evaluated development interventions, like micro-finance and conditional cash transfers.
New Zealand employers recognise the benefits of addressing the labour shortage with overseas workers
Other researchers have followed the employers’ side of the story, relying especially on annual surveys. These show that around 99 percent of employers participating in the RSE scheme feel that it gives them access to a better quality and more productive workforce.
In fact, orchard-level case studies of productivity we carried out showed that the RSE workers were between 22-54 percent more productive than NZ contract labour. The gap was even larger with respect to backpackers and casual labour, with the RSE workers from 49-82 percent more productive than these workers.
So, if employers were ‘on the money’ about RSE worker productivity, are they now ‘in the money’ because of the RSE programme?
In a word, yes. And not just marginally either.
To supplement our previous analyses, I recently studied the aggregate impacts of the RSE scheme on New Zealand’s exports. The focus was on apples, kiwifruit, and wine: the biggest export products within the horticulture and viticulture sectors and the three biggest employers of RSE workers (especially if the time spent pruning and maintaining vines is accounted for).
The New Zealand exports of these three products each year between 1993 and 2016 were compared to those for 45 other countries. I found a significant jump in the value of New Zealand’s apple, kiwifruit and wine exports that occurred after the initiation of the RSE scheme in 2007. This analysis suggests that the value of the exports of these products from New Zealand are about one billion dollars (specifically, US$670 million, in inflation-adjusted terms) higher per year than would have been the case in the absence of the RSE scheme.
Some of this increase is a relative effect, as resources move from other sectors into the horticulture and wine sectors (as seen from their bigger slice of the total exports cake). So, we can think of these seasonal work migrants as helping to augment New Zealand’s comparative advantage in land-based industries.
An extra billion dollars in exports for a small country like New Zealand is significant. We have generally struggled to export, compared to other small developed countries. Indeed, exports as a share of GDP in New Zealand seem to have declined about 10 percentage points since the turn of the century. So, finding sectors where we are doing better, such as horticulture and wine, is heartening. At least some of this growth is thanks to the RSE scheme and to the hard work of thousands of seasonal migrants who spend their days picking, packing and pruning every year.
The scheme is mutually beneficial. There’s no doubt that it helps our friends on neighbouring islands who supply a large percentage of RSE workers. But if we recognise the ways that the scheme helps Kiwis too, the RSE starts to look like an economic partnership more than just another migration programme.
So, let’s start appreciating the pickers, the packers and the pruners. Let’s start crediting the role they are playing in our economy.