Dr Bob Birrell: High immigration killing jobs/wages

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By Leith van Onselen

Dr Bob Birrell from Australian Population Research Institute is the latest to question Australia’s mass immigration policy, which has the permanent migrant intake set at 200,000 people a year – even higher than the peak of the mining boom:

From the Herald-Sun:

AUSTRALIA imported about 375,000 migrants and temporary residents of working-age over the last two years despite the poor job market.

New federal figures show that 175,000 of those recent arrivals got jobs, including 114,000 in 2015.

Since 2007, 1.7 million migrants and temporary entrants have come to Australia, and about two-thirds of them had jobs as of November last year, said the ABS report Characteristics of Recent Migrants Australia…

Head of The Australian Population Research Institute Dr Bob Birrell said it was incredible that the Federal Government was adding over 100,000 foreigners to the work force each year.

“That is an enormous number given that job creation in the past two years has been sluggish,” he said.

“This is a gratuitous slap in the face to local job seekers”…

President of low-migration party Sustainable Australia, William Bourke, said the nation’s record annual immigration program of over 200,000 was driving rapid population growth.

“This growth not only puts downward pressure on wages and contributes to the slowest wage growth in 20 years, it makes it harder to achieve secure jobs, affordable housing, better planning and a sustainable environment,” he said.

“We urgently need to lower immigration back to the long term average of 70,000 per year.”

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Well said. The fact remains that it makes absolutely no sense maintaining a mass immigration program when average compensation per worker is falling:

Labour underutilisation is sky-high:

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And Australian housing is the most expensive on record:

As long as the labour market continues to be flooded with 200,000 migrants per year (mostly ‘skilled’), there will continue to be an oversupply of labour, which will continue to reduce workers’ bargaining power and maintain downward pressure on wages.

In the meantime, housing affordability will remain under pressure, especially in the migrant hotspots of Sydney and Melbourne, thus eroding workers’ real purchasing power even further.

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It’s not like the flood of migrants is boosting skills, either. According to the ABS’ Characteristics of Recent Migrants report, released this week, the jobless rate for recent migrants and temporary residents was 7.4% compared with 5.4% for the Australian-born population, whereas the participation rate was also lower among migrants:

So much for the notion that migrants have greater labour market attachment than the incumbent population. The opposite is in fact the case.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.