Labour mobility can take various forms, including the mobility of a worker across a range of occupations (occupational mobility) and a worker’s mobility across distinctive labour markets (geographical labour mobility).
Most FICs are characterised by young and rapidly growing populations, but the domestic labour markets are not growing fast enough to absorb new entrants. The vast majority of the prospective new entrants are low skilled or semi-skilled and as such they face the daunting prospect of having to compete in an already saturated labour market, where there are acute shortages of skilled people rather than low or semi-skilled people.
The socio-economic and developmental implications of saturated labour markets have been quite damaging to the FICs in the form of high unemployment and underemployment rates which have undermined social cohesion and contributed to political instability in some of the countries. Long term economic productivity has been stifled and put a strain on already stretched government finances.
Labour mobility by unskilled workers in the Pacific to Australia and New Zealand can provide immediate relief to overstretched labour markets and lower the risks associated with this phenomenon. Remittances have been a significant source of foreign exchange and have contributed to the socio-economic development of several communities in the Pacific. At the individual level, workers returning to their home countries with enhanced experience and skills can improve their economic circumstances by starting a business or find better paid jobs. The money earned overseas can support families in diverse ways, including putting kids through schools and assisting partners to establish small businesses.
For all these reasons, the FICs attach a lot of importance to increased geographical mobility. It was therefore not surprising that at the Special Forum Trade Ministers’ Meeting (FTMM) in October 2009 Ministers designated regional labour mobility as a priority issue in the PACER Plus negotiations.
The objective of the Parties is to build on the current seasonal worker programmes of Australia and New Zealand, namely the Seasonal Worker Program (SWP) and the Recognised Seasonal Employment (RSE). It is acknowledged by the Parties that labour mobility represents a win-win for the sending and receiving countries. There is evidence on record that the RSE has contributed greatly to the enhanced productivity in horticulture and viticulture sectors of New Zealand’s economy. The assessment of the SWP also indicates positive gains for the Australian economy.