universities

In November 2018 The Australian Population Research Institute (TAPRI) published an analysis of the higher education overseas student industry. It was framed around the remarkable growth in the share of commencing overseas university students to all commencing students over the years 2012 to 2016. This share increased from 21.8 per cent in 2012 to 26.7 per cent in 2016.

Bob Birrell and Katharine Betts

(This post is republished from John Menadue’s site, Pearls and Irritations, 27 December 2018.)

In November 2018 we published an analysis of the higher education overseas student industry. It was framed around the remarkable growth in the share of commencing overseas university students to all commencing students over the years 2012 to 2016. This share increased from 21.8 per cent in 2012 to 26.7 per cent in 2016.

Since publication, higher education statistics for 2017 have been released. They show  that the share of commencing overseas students to all commencing students have increased to 28.9 per cent. In the case of the Group of 8 (Go8) universities, by 2017 this share had reached well over 40 per cent in the University of Sydney, ANU, and the University of NSW (Table 1).

The following brief summary indicates why such extreme reliance on overseas students should be of concern. We then explore another issue, not canvassed in the November report. This is the implications of the rapid growth in overseas student commencements for access to higher education on the part of domestic students.

This a highly topical matter because in December 2017 the Coalition government announced that it would henceforth cap the level of domestic higher education enrolments. Since that time, Australia’s universities, including the Go8, have mounted an offensive against this decision on the grounds that it limits opportunities for domestic students. Yet the enrolment data examined below indicates that, at least since 2012, the Go8 have effectively enforced just such a cap on domestic enrolments.

A summary of the November report’s findings

The November report argued that the overseas student industry was in a precarious state because of its increased reliance on overseas student enrolments. The share of overseas commencing students to all commencing students at Australia’s universities increased from 21.8 per cent in 2012 to 26.7 per cent in 2016.

We concluded that the tail was wagging the dog. That is, such was our universities’ reliance on overseas students, that most were prioritising the health of the overseas student industry over the educational needs of domestic students. In the case of research, the universities’ focus was primarily on basic research. This is because it is this that is relevant to their aspiration to achieve a place in the top 100 institutions in the global university ratings systems. As documented in the November report, research of this kind is the most likely to be accepted by the top international journals that drive the ratings system. Research focused on local priorities wouldn’t make the cut.

Australia’s overseas student industry is split into two distinctive markets. The first includes most of the Go8 universities, where overseas students were charged some $40,000 a year, mainly for courses at the undergraduate and post-graduate-by-coursework level in business and commerce. Most of the students are Chinese. Indeed, between 2012 and 2016, the total increase in overseas student commencers at Go8 universities was 13,738 . Of these 12,198 were Chinese.

Students’ (or parents’) willingness to pay for such high priced courses can be attributed to the fact that they deliver credentials from a university rated in the international top 100. (This includes almost all of the Go8.) Qualifications from these universities appear to be highly regarded in the Chinese labour market. Relatively few of these Chinese students stay on in Australia after completing their studies.

This enrolment pattern helps explain the universities’ focus on basic research. In order to maintain enrolments from China, they have to promote such research because it scores best on the metrics used by the international ratings systems.

The second market is composed of almost all the other universities. The number of overseas students enrolling in these universities also increased significantly between 2012 and 2016 (though at a slower rate than occurred in the Go8). However the countries of origin were primarily located in the Indian subcontinent. Most of these students were attracted to Australian universities because of the access their enrolment gave them to the Australian labour market and thus to the potential of a permanent residence visa.

We concluded that the overseas student industry was in a precarious state. In the case of the Go8, overseas enrolments were vulnerable on three points.

First is the risk of reputational damage on account of the poor quality of the education overseas students are receiving. In the business and commerce faculties at the Go8, where Chinese students often constitute the majority, such courses have had to be made less demanding so that the many Chinese students with relatively limited English language skills can cope with their requirements. Then there is the risk from geopolitical tensions that threatened Chinese enrolments. And finally there is the risk of competition from other countries.

For the other universities the main issue is current changes in the rules governing overseas-student access to the Australian labour market and to long-term employment contracts. This means that their chances of obtaining a permanent residence visa are contracting. As a consequence we argued that these changes would diminish the attraction of enrolling for higher education at a non-Go8 Australian university.

Table 1: Per cent share of commencing onshore* overseas students to all onshore commencing students, Go8 universities and all Australian higher education institutions, 2012, 2016 and 2017

Source: Department of Education and Training, Higher Education Statistics, Table 1.10, Commencing Students by State, Higher Education Provider, Citizenship and Residence Status.

* The term onshore is used to distinguish overseas students being educated in Australia from those in Australian campuses set up overseas. The latter are not included in these figures.

Higher education opportunities

Australia’s universities repeatedly assure the Australian public that increased enrolments of overseas students are not damaging the prospects of domestic students aspiring to a university education. Rather, they state that the two sets of enrolments are independent of each other; opportunities for locals are not being crowded out.

How could this be? Well, according to a 2014 policy document from the Go8, international students actually ‘directly facilitate domestic participation in higher education’. This is achieved, the document claims, because revenue from overseas student fees contributes to the costs of domestic education. It asserts that international student fees ‘subside each domestic student by around $1,600’.

This might seem plausible given that domestic enrolments have increased since the removal of enrolment caps for domestic students in 2009. Over the years 2012 to 2017 (years in which overseas enrolments expanded rapidly) the number of commencing domestic students at Australia’s universities increased from 370,314 to 416,371.

The result is that a very high share of the cohort of university age are currently enrolled as higher education students. In fact, university competition for potential domestic students is such that some universities have seen a drop in their domestic enrolments over the past couple of years. Concern that this enrolment scramble had gone too far (and was costing the Commonwealth government too much in funding) prompted the Coalition government in December 2017 to announce that it would re-impose enrolment caps in 2018 (caps which Labor promises to withdraw should it win government in 2019).

The universities have responded to these caps by insisting throughout 2018 that they amount to a reduction in opportunities for domestic students. According to Margaret Gardiner, Vice Chancellor at Monash University, the cap acts as a funding freeze which ‘will limit the share of highly-skilled well-paid jobs in our economy that can be done by qualified Australians in the decades ahead’. Or, in the words of the newly appointed (in June 2018) Chief Executive  of Universities Australia, the reinstating of caps puts an end to the ‘unearthing and unleashing’ of talent that has occurred since the caps were removed, starting in 2009.

If expansion of overseas student enrolment was helping to create opportunities to increase domestic enrolments you would expect that more domestic students would be gaining places in Go8 universities. Over the period 2012 to 2017, when there were no caps on the number of domestic students that any university could enrol, domestic student commencements at Go8 universities barely moved. They were 87,939 in 2012 and 87,930 in 2017. By contrast, over these same years the number of overseas student commencements at the Go8 increased from 30,320 to 56,363. (The data are drawn from Higher Education Statistics releases, various years.)

Given that there were no caps in place, the Go8 could have taken more domestic students over these years. Many more thousands of these students would have jumped at the opportunity to attend a Go8 university. They were precluded from entry by the high ATAR  entry thresholds imposed by Go8 universities. Such is the Go8 universities’ prestige that they attract the best domestic performers in secondary school exams. Like the overseas students, domestic students know that a credential from a Go8 university gives them a competitive advantage in the labour market (in this case within Australia).

The stabilisation of domestic enrolments was not because the Go8 lacked the capacity to increase their student load. They did have the capacity, but all of it has been taken up by increased enrolments from overseas students.

Clearly, the Go8 universities preferred to enrol overseas students. In effect, the benefits of the allegedly superior education that these universities offer went to overseas students rather than to local students. This was not because overseas students had superior potential to take advantage of what the Go8 offers. The contrary is the case. The Go8 do not preference high performing overseas students. There are minimal entry barriers to their enrolment other than the ability to pay the huge fees required.

Conclusion

Australia’s universities, especially the Go8, are caught in a vicious circle as their reliance on overseas student revenue deepens. This reliance means that they cannot prioritise teaching which benefits the vocational needs of their domestic students, to expand enrolment opportunities for domestic students or to focus on research activities relevant to Australian industry or the well being of Australian citizens.

Report authors

Bob Birrell (mobile 0413 021 126) is the Head of the Australian Population Research Institute (TAPRI), an independent, non-profit research organisation. Katharine Betts is deputy head.

This paper is based on two TAPRI research reports:

Australia’s higher education overseas student industry revisited, December 2018  and Australia’s higher education overseas student industry: in a precarious state, November 2018.

Senior law lecturer at UNSW, Bassina Farbenblum says, "Our study confirms that Australia has a large, silent underclass of underpaid migrant workers,” commenting on a report entitled, "Migrant Worker Justice Initiative." The authors do not question the impact on Australians of this corrupt industrial and academic underbelly, but observe complacently, that if Australia is to "position itself as the destination of choice for international students and backpackers, reforms must be urgently implemented to prevent wage theft and enable migrant workers to report and recover unpaid wages." This report would benefit from wider and more historical context: When most wages in Australia were regulated by state awards, and strong unions defended Federal awards, there was very little illegal labour, hence little motivation to import cheap labour. It was easy to enforce written awards that covered entire industries and occupations, and were regulated by dedicated entities. This changed when Kennett abolished Victorian State Awards in 1993, setting the scene for Howard's Workchoices, and going on to widen the use of the corporations clause in the Australian constitution, which exempted corporations from many employer obligations. (See /node/4612.) The privatised for-profit university system gave up on real research in favour of importing students like cash-cows, to pay large fees and rent university owned apartments. Many of these students had to work any conditions in order to survive and pay their fees, fearing that if they failed to retain student status, they would be deported. A win-win situation for exploiters all round, as it drove down wages for everyone. In fact, if 'reforms' were successfully implemented to prevent wage theft from migrant workers' we would soon see a huge reduction in the numbers of migrant workers. It's all slave labour under other names. (Candobetter.net Editor.)

An overwhelming number of international students and backpackers in Australia are suffering wage theft in silence, a landmark study by UNSW Sydney and UTS has found.

Fewer than one in 10 migrant workers took action to recover unpaid wages even though most know they are being underpaid, according to the report Wage Theft in Silence.

“Our study confirms that Australia has a large, silent underclass of underpaid migrant workers,” said senior law lecturer at UNSW, Bassina Farbenblum. “The scale of unclaimed wages is likely well over a billion dollars.”

The report draws on the first large-scale national survey of temporary migrant workers, with 4322 respondents from 107 countries working across all Australian states and territories. It is authored by Farbenblum and Laurie Berg, a senior law lecturer at the University of Technology Sydney (UTS).

Migrant workers comprise up to 11% of the Australian labour market. The authors’ previous report found most international students and backpackers are underpaid, with one in three earning about half the legal minimum wage.

The new report paints a bleak picture for the few who try to recover their unpaid wages. The study reported that for every 100 underpaid migrant workers, only three went to the Fair Work Ombudsman. Of those, well over half recovered nothing.

The authors conclude that for most migrant workers it is neither possible nor rational to try to claim their unpaid wages through the forums that currently exist.

“The system is broken,” said Laurie Berg. “It is rational for most migrant workers to stay silent. The effort and risks of taking action aren’t worth it, given the slim chance they’ll get their wages back.”

“There is a culture of impunity for wage theft in Australia. Unscrupulous employers continue to exploit migrant workers because they know they won’t complain,” said Bassina Farbenblum.

The study dispels the popular assumption that few migrant workers would consider coming forward. In fact, though few had actually taken action, a majority (54%) were open to trying to claim unpaid wages. The study identified the key barriers that prevented them from coming forward.

“The findings are deeply troubling but give cause for optimism, because they reveal a path forward,” said Laurie Berg. “The study indicates that some of the most significant barriers to wage recovery can be practically addressed.”

The most cited barriers were not knowing what to do and concerns about the amount of effort involved. However, more than a quarter said they would not speak up because of fears of losing their visa.

Migrant workers’ reluctance to come forward was not explained by poor English or foreign culture. In fact, Asian migrants were most willing to come forward.

The report concludes that if processes and support services are improved, and immigration safeguards strengthened, more migrant workers would report and seek redress for wage theft in the future.

The authors observe that if Australia is to position itself as the destination of choice for international students and backpackers, reforms must be urgently implemented to prevent wage theft and enable migrant workers to report and recover unpaid wages.

They urge the government, the education sector and business to act swiftly to implement the report’s recommendations.

The report is available at the Migrant Worker Justice Initiative (www.mwji.org). For further information on a new initiative by the education sector to address wage theft see https://www.mwji.org/international-students-in-australia.

About the survey:

· Anonymous, online survey of 4,322 people who worked in Australia on a temporary visa

· Available in 12 languages as well as English

· 2,392 respondents were international students; 1,705 were enrolled at a university and 523 at a vocational or English-language college

· 1,440 respondents were backpackers (Working Holiday Makers).