Policy Preferences and Political Influence: The Role Employer Organisations in the Making of Labour Immigration Policy

Over the past 20 years, governments in many advanced economies have relaxed of labour immigration controls in response to labour shortages, demographic change and international business activity (OECD, 2009). In some cases, employers have been granted substantial capacity to determine which migrant workers are granted entry and on what terms, as reflected in the rise of sponsored visa schemes regulated according to business demand (Sumption, 2014). Employer organisations, which are widely recognised as a critical actor in labour immigration policy making (Freeman, 1995; Money, 1999), are generally seen to have played a central role in these developments (Caviedes 2010; Cerna 2009; Devitt, 2011; Menz 2008). However, in some cases, the influence of employer organisations over government immigration decisions has been relatively marginal, despite the presence of favourable institutional market and political environments (Wright, 2012).

This paper examines the factors shaping national variation in the preferences and influence of employer organisations over labour immigration policy decisions. Drawing upon an analysis of the role of employer organisations in recent policy reforms in Australia and the United Kingdom, it identifies the importance of ‘non-market factors’, namely political considerations (Boswell, 2007) and historical legacies (Schmidt, 2002), in influencing the decisions of employer organisations engaged in the policy process. The paper argues that comparative scholarship needs to pay greater attention to non-market variables, which are overlooked by comparative political economy accounts emphasising the importance of market-oriented institutional and interest-based variables, such as production regimes, sectoral composition and market regulation (Caviedes 2010; Menz 2008), and theories of employer organisation influence emphasising organisational factors such as lobbying capacity, internal governance and party-political relationships (Grant, 2000; Schmitter and Streeck, 1999; Traxler, 1999). Without overlooking their importance, the paper argues that these variables alone are unable to account for national variations in the policy positions of employer organisations.

A small-n, most similar case methodology is used to compare the labour immigration policy preferences and influence employer organisations across national contexts. This method was prejudged as the most effective way of ‘process tracing’ the multifaceted dynamics of policymaking in order to make causal inferences about the role of employer organisations in this process. Australia and the United Kingdom were selected as most similar cases for three reasons. First, both states are ‘liberal market economies’ (Hall & Soskice, 2001) with similar regulatory arrangements that make ‘liberal’ options for meeting employers’ labour needs, such as expansive immigration policies, relatively more attractive. Second, these two states oversaw a significant liberalisation of visa regulation in the decade preceding the global economic downturn, perhaps to a degree greater than any other state (Abella, 2006). Third, employer organisations in Australia and the UK have similar characteristics in their structures, functions and strategies (Sheldon and Thornthwaite, 2004; Traxler, 2008). The research methodology involved an analysis of 98 interviews with policymakers and lobbyists in the two states, including 37 representatives of employer organisations and other business groups. The analysis also drew upon time-series industry-level and occupational labour market statistical data, which was complemented by an examination of relevant primary documentation and secondary literature.

The paper focuses in particular on the period between 1999 and 2007, when governments in Australia and the UK adopted similar expansive labour immigration reforms, in similar macroeconomic and political circumstances. In Australia, the national and sectoral business organisations played a prominent role in driving labour immigration policy change. Their preferences were informed by the liberal shifts that had occurred in Australia’s political economy, with certain national organisations used their organisational coherence and associative capacity to successfully lobby for the adoption of key reforms. In contrast, employers played a marginal role in driving labour immigration reform in the UK. National organisations took a greater interest in this issue as labour shortages became pronounced around mid-2000s, and supported a number of government decisions. But for the most part, employers were largely ambivalent and disengaged from the process and did not instigate any key changes. This was despite a preference among UK employer organisations for liberal policy mechanisms to meet their labour needs and similar degrees of associative capacity to their Australian counterparts.

Despite the presence of similar environmental factors, market-oriented policy preferences and organisational similarities, the preferences and influence of employer organisations in Australia and the UK with respect to labour immigration policy were starkly different during the period analysed. The paper finds that differences in the immigration ‘policy legacies’ (Hollifield et al., 2014) of the two states was critical in influencing the respective positions of employer organisations. Whereas Australia’s status as a so-called ‘traditional destination state’ led employers to see expansive immigration policy a “key policy principle”, to quote one representative, employer organisations in the UK – widely considered to be a ‘reluctant immigration state’ – primarily saw immigration as a risky “political” issue that they would avoid associating with where possible. These findings lead to the conclusion that non-market factors such as political considerations and historical legacies exert a greater influence over the policy positions and strategies of employer organisations than is acknowledged within the literature.