Via Domain today, the former “independent always” turned immigration-dependent real estate listings firm:
Chief executives of some of Australia’s biggest companies have thrown their support behind the nation’s immigration program, saying it is crucial for bringing in the skilled workers they need and underpins economic growth.
With the federal government expected to cut the immigration intake in next month’s budget, the Sydney Morning Herald and Age questioned almost 50 business leaders during the recent corporate earnings season about the economic role of immigration.
More than half – including the leaders of Telstra, Woodside, Qantas, Suncorp, GPT and Australia Post – highlighted the importance of accessing skilled migrant workers, ranging from software engineers, to scientists, to welders.
This entire debate boils down to one simple issue. Sure, we can import skills cheaply from third world countries, or we can train local kids instead. CEOs love the former because they need neither to waste money on investment in training, nor raise wages to compete to acquire labour. That fattens their own bonuses and pay packets. Of course it also means no wages growth for anybody else. The kicker for the CEOs comes as more people grows demand anyway.
For CEOs it is perfect but for existing residents it is a recipe for ever declining living standards. That’s all there is to it.
But don’t take my work for it. A brave Ross Gittins, also of Domain, has stepped from a time machine to make the case against his own’s firm and its CEO mates today. Here’s what Gittins wrote in early 2018:
There are at least four counts against the advocates of high immigration. First, their refusal to engage with the academic environmentalists arguing that we’ve exceeded the “carrying capacity” of our old and fragile land. Scientists? What would they know?
Second, they keep asserting high immigration’s great economic benefits, blithely ignoring the lack of evidence. Whenever the Productivity Commission has examined the issue carefully it’s found only small net effects, one way or the other. Its latest modelling found only a “negligible” overall impact.
Third, the advocates not only decline to admit the high social and economic costs that go with high rates of immigration, they decline to accept their share of the tab, doing all they can to shift it to the young, the poor and those on the geographic outer, including many of the migrants.
…The more we invest in such “capital widening” to stop the ratio of capital to labour declining, the less scope for investment in “capital deepening” to keep the ratio increasing, and so improving the productivity of our labour.
And before that:
For a rigorous economic analysis it’s not good enough to simply assume that bigger is better. Why exactly is it better? The conventional answer is that bigger is better if it brings us a higher material standard of living – if it makes us more prosperous. But for this to happen – not necessarily for each individual, but on average, and for the community as a whole – the economy must grow faster than the population grows ie there must be an increase in real GDP per person.But there’s a third layer: even if increased population does lead to higher GDP per person, who shares in that increase? Conventional economics is about self-interest, so for immigration to be justified economically it has to be shown that the pre-existing population benefits from the decision to increase the population. If instead all the benefit went to the immigrants, then the immigration program would be merely an act of charity…
And before that:
The original bipartisanship was a kind of conspiracy. The nation’s business, economic and political elite has always believed in economic growth and, with it, population growth, meaning it has always believed in high immigration…
The most recent study by the Productivity Commission found an increase in skilled migration led to only a minor increase in income per person, far less than could be gained from measures to increase the productivity of the workforce.
What’s more, it found the gains actually went to the immigrants, leaving the original inhabitants a fraction worse off…
And before that:
The economic rationale for economic growth is that it raises our material standard of living. But this happens only if GDP grows faster than the population grows. So it doesn’t follow that slower GDP growth caused by slower population growth leaves us worse off materially.
That would be true only if slower population growth caused slower growth in GDP per person. I suspect many people unconsciously assume it does, but where’s the evidence?…
…But what’s strangest about the economic elite’s unthinking commitment to high immigration is the way they wring their hands over our weak productivity growth and all the “reform” we should be making to fix it, without it crossing their minds that the prime suspect is rapid population growth.
It’s simple: when you increase the population while leaving our stock of household, business and public capital unchanged, you “dilute” that capital. You have less capital per person, meaning you’ve automatically reduced the productivity of labour.
So you have to do a lot more investing in housing, business structures and equipment and all manner of public infrastructure – a lot more “capital widening” – just to stop labour productivity falling…
Lower immigration would help reduce a lot of our economic problems – not to mention our environmental problems (but who cares about them?).
And before that:
And before that:
The mass immigration economic model has destroyed Australian wages growth. Good on a ballsy Ross Gittins for taking on his own firm and its CEO mates and their endless class war.
