Wage fraud hits students hardest


By Jawad Akram Rana:

I would like to highlight aspects of the labour market which provide developed economies with a cheap or subsidised workforce in the form of students. Irrespective of similar practices observed in other developed countries, my focus will be on the Australian market. The idea comes from observations made during my stay in England for graduation, and in Australia for my Masters degree. Study requirements saw me living in these two developed economies for around six years.

Many young people who travel from developing or less developed backgrounds to developed countries in the name of higher education, end up becoming subsidised labor for employers who are experts in exploitation. These employers have found many ways to exploit this student sector, taking advantage of them to turn extraordinary profits. These extraordinary profits cannot be realised if employers abide by workplace regulations, using the locals as their workforce. But workplace regulations are violated when using this student workforce.

The minimum wage is a strong economic indicator in developed economies. This becomes only a theoretical phenomenon when employers start exploiting students; when an employer knows he has so many people out there to work for him, he can negotiate the minimum wage rate down to an even lower minimum level. Further, employers are well aware of the fact that this labour market sector is only allowed to work 20 hours and that it’s not possible to cover educational and living expenses, while working this many hours. Then comes the extra work on “subsidised’’ terms.

Recently we saw the 7-Eleven case in the media. That came as a big shock to these kinds of employers. Media reports detailed the many ways employers used to fabricate wage records. People would work for 40 hours while being paid for 20 hours on record, bringing the hourly wage from $20-24 to $10-12. Some employees said managers or franchise owners would take cash back for half of their wages after crediting the full amount in account records. This leaves no trail. With 7-Eleven, it was noted that the majority of the effected staff were students.

This was just one employee which became part of a public media campaign. During my six years of student tenure I have faced 8-10 employers who do similar things including security companies, delivery contractors, convenience stores, fruit markets, cleaning and other trades. This leaves an impression on me that such employers are almost everywhere and in most industries.

Exploiting workers like this is totally wrong, illegal and disrespectful. These unscrupulous employers are earning extraordinary profits while someone else is bearing the cost. Benefits are piling up while in another sector, people are suffering. Suffering is a word used intentionally, because after working in such an environment, one’s studies are heavily affected. It also leads to increased educational expenditure due to failures. In case of litigation, where local employers are penalized, they can pay from their illegally earned money and can set up in the same way again. But the students can be deported, which can harm them significantly and bring their careers to an end.

Some students take this lack of minimum wage enforcement as an opportunity to make extra money. They consider the cost of education as an investment and in return they earn extra money in the “off the record” workforce. With this money they make considerate remittances back home, with relatives not knowing that everything going on here is not as per the rules and regulations. This leads to social inequality and disturbance. I would also mention the tax evasion element here which, in my view, is a crime committed by not one but both parties. This all comes from exploitation of just one particular segment in society.

I assume that if labour rules are enforced it is possible to bring a significant reduction in the scale of this “subsidised labor” and to provide a chance to students to manage themselves in a better way. I would like to express my interest in finding a job in the tax department to crackdown on as many black sheep as I can.

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