Why would low-skilled British workers go to Sydney and Melbourne (in large numbers)?

Question

News from earlier this month

The Australian government has turned down the UK’s offer of a post-Brexit trade agreement that included visa-free work and travel between the two countries.

Trade minister Simon Birmingham said full free movement would not be accepted because it could cause an exodus of highly trained workers to the UK and an influx of unskilled British workers to Sydney and Melbourne.

The 2nd part of that last statement seems a bit weird. At least judging from the case of EU enlargements to the east, both skilled and unskilled eastern workers migrated to western EU (and there wasn't much of migration in the opposite direction). There are actually some countries in the EU that see both processes at the same, e.g. Italy, but the destination countries to which it experience its brain drain (mainly Germany, but also the UK) are not the source countries for (most of) Italy's low skilled immigrants.

So why would unskilled (or low skilled) UK workers flood Sydney and Melbourne (if Australia gave them the chance)? In pure economic terms, there would have to be a large enough different in attraction (for unskilled labor) between substantial parts of the UK and Sydney/Melbourne (wage difference, perhaps also taking into account the cost of living, and also regional unemployment); is that the case though?

(There's an article in the Guardian that says that the cost of living in Sydney is higher than even in London. I'm not sure how that translates into [unskilled] salaries though. Housing definitely seems more expensive in Sydney than even in London, with a median price to income ratio of 12.9 vs 8.5, and even Melbourne at 9.9 has it higher than London.)

Answer 1

Because it is already an issue.

Visa Overstayers

However, an estimated 86,940 people who entered Australia in 2017–18 breached their visa conditions. Many of them quickly left the country, but as of 30 June 2017, there were 62,900 unlawful non-citizens residing in Australia—a number that has remained roughly constant over the past few years.

50% of unlawful non-citizens had been in Australia for five years or longer. While popular media might portray the majority of ‘visa overstayers’ as European or American backpackers, remaining in Australia for five years or more hardly constitutes an extended holiday or gap year.

While I am unable to find a breakdown of overstays by country of origin, the breakdown of visas requested and granted, puts the UK at the top of the pack, representing 20% of working holidays Visas.

Australia is also a western English speaking country with a safety net benefits system, meaning total failure to work has similar consequences as can be found in the UK. It is also warmer and mainly known as a holiday destination in the UK.

It is not hard to see Australia as somewhere where the grass is greener if you are stuck in an unskilled job in the UK. Present circumstances with fires excepted.

Answer 2

This is politics. So the Australian trade minister gave an argument why a suggested trade deal wasn't acceptable. That doesn't mean his arguments are true, it means he wants a better deal.

It is not too easy at the moment to move from the UK to Australia permanently, and I'm sure the Australians have their reasons for that. They are not just going to change this because the UK comes knocking on the door. Especially since the UK will be desperate to get trade deals, so there is no reason why Australia wouldn't wait for a better deal.

Answer 3

So why would unskilled (or low skilled) UK workers flood Sydney and Melbourne (if Australia gave them the chance)?

For the same reason why hundreds of thousands of Britons currently live in Spain: better weather. Let's face it, weather in the UK is cold and rainy for the most part of the year. It's double miserable if you live in the northern parts of the country. So it is very appealing for many people to move abroad, especially if they don't have to learn a new language in the process.

For comparison, see the tourism score of London below, as calculated by Weatherspark. The tourism score favors days with no rain and a humidity-adjusted temperature between 18 and 27 degrees Celsius.

In comparison, here's the tourism score for Sydney:

In which of the two cities would you rather live in, all other things being equal?

Answer 4

I'm not sure this is really a correct answer, but according to Deutsche Bank data both Sydney and Melbourne rank higher than London in average salaries and also in "disposable income" after cost of housing (but not living in general) is subtracted (although housing is a large chunk of that). So, Sydney and Melbourne are financially more attractive cities "on average" than even London. It's possible that the Australian argument was simply based on this fact alone.

But it doesn't quite explain why given this difference in averages, the "brains" would choose to go to London/UK, unlike the "brawns" who (following the average better payoff = "disposable income") would choose to go to Sydney/Melbourne. I mean, going by those average figures, London would have to fear brain drain toward Sydney/Melbourne. One would have to see similar comparative "disposable income" data by job category (e.g. blue vs white collar workers), which I have yet to find...

Some economic theory predicts that countries with higher income inequality attract more skilled workers:

Borjas (1987) points out that migration responds not only to average wages but also to their dispersion reflecting underlying interregional differences in rewards to skills. In particular, regions or countries with a relatively egalitarian wage distribution will attract primarily low-skilled workers, whereas high-skilled workers will choose to migrate to regions with a more uneven wage distribution and higher returns to skills.

The funny thing however is that for one year I could find this kind of data (2008), Australia and the UK have exactly the same Gini coefficient (for income inequality)... 0.34.