Eslake: Mass immigration collapse to drive wages growth

God bless COVID-19. After years of battling a kind of corporate wokism that was designed to destroy Australian wages via immigration (cheered on by an idiot fake left) the reality of life without mass immigration is forcing everybody to shift. Saul Eslake was certainly far from the worst on these topics over the years, mostly pointing out the pros and cons of immigration rather than advocating directly for it. Today he wraps the numbers superbly to describe what it did:

  • Unemployment is falling fast in part owing to no immigration.
  • With mass immigration in place, it took 29k new jobs per month to soak up the jobless.
  • Without it, it only takes 17k new jobs to drive unemployment to 5% by year-end.
  • The RBA may, therefore, face higher wage gains much earlier than the last cycle.
  • The Morrison Government should plan cuts to stimulus spending to give the RBA wriggle room, in coding cutting FHB grants.

The chart does not lie. Mass immigration from the millennium gutted worker pricing power:

Wages share of national income

Wages share of national income

Slash immigration, restore wages growth and trigger productivity gains via automation to lifts profits and income.

A much stronger, more competitive, and fairer economic model.

Houses and Holes
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  1. Arthur Schopenhauer

    Hooray! 🙂

    As an employer of Australians, three cheers! Higher salaries drive productivity and technology.

  2. – NONSENSE. The chart doesn’t prove immigration pushes wages share of national income lower. Becasue the falling “share of national income” already starts to fall in the early 1980s.
    – If you want to blame someone/something then blame increased productivity. As I have written many times here on this blog increased productivity reduces income and reduce demand for workers. But it seems that 2 followers of the austrian school (David Lewellyn Smith & Leith van Onselen) don’t want to hear that. To understand what’s going on one has to follow the keynesian approach of aggregate demand.