Angry immigration elephant in the room tramples Greg Jericho

The Guardian’s economics poster boy, Greg Jericho, has written another article chock full of shiny charts attacking the federal government’s inability to drive unemployment down and wage growth up.

Jericho’s key points are as follows:

  • “We’ve had years of absurd budget projections about wages growth that never came true” because the Treasury’s assumed natural rate of unemployment (5%) was far too high.
  • The Australian economy is suffering chronic labour underutilisation.
  • Australia needs to get unemployment below 4% to drive wage growth.
  • In the decade since the GFC Australia suffered from low per capita growth and stagnating real wages.

The next chart encapsulates Jericho’s arguments:

Australian GDP per capita

Australia’s real GDP per capita growth has stagnated since the GFC.

Regular readers will know that we agree with Greg Jericho’s points and have argued similar for nearly a decade. The difference is that unlike us, Greg Jericho deliberately ignores one of the key drivers of Australia’s sluggish per capita GDP and wage growth: mass immigration. Why? Because it is supposedly racist to suggest that Australia’s immigration intake was far too high:

“Immigration – because there are many desperate to hate – must be treated with extreme care by politicians and journalists… The inherently racist parties will seek to use any discussion and any seeming evidence of the negative impact of migrants as fuel to burn their fires of hate”.

Because of this view, Greg Jericho never mentions immigration, despite its obvious deleterious impacts on the labour market and wages. But the proof is in the data.

Australia’s net overseas migration (NOM) jumped from an average of 89,000 between 1991 and 2004 to an average of 215,000 between 2005 and 2020 – an annual average increase in immigration of 140%:

Australia's net overseas migration

Australia’s immigration intake accelerated after 2005, flooding the labour market.

This huge increase in migrant workers flooded the labour market, making unemployment higher that it otherwise would have been and wage growth lower.

Heck, even the Australian Treasury’s own propaganda report, entitled Shaping a Nation, explicitly acknowledged that the overwhelming majority of Australian jobs growth went to migrants between 2011 and 2016:

Recent migrants accounted for two-thirds (64.5 per cent) of the approximately 850,000 net jobs created in the past five years. For full-time employment, the impact is even more pronounced, with recent migrants accounting for 72.4 per cent of new jobs created.

Migrants stealing jobs

Migrants took most jobs between 2011 and 2016.

The flood of migrant workers also contributed to Australia’s productivity decline since 2005 by congesting our cities, driving up the cost of infrastructure provision, and discouraging firms from adopting labour saving technologies and automation (explained here).

Australian labour productivity growth

Australia’s labour productivity collapsed after 2005, coinciding with the boom in immigration.

The biggest risk to Australia’s labour market is the Morrison Government’s planned reboot of the mass immigration program via:

  • Abolishing labour market testing requirements;
  • Lowering costs and speeding up approval times for importing foreign workers;
  • Expanding the skilled occupation list to include almost any role;
  • Providing all ‘skilled’ visa holders with a clear pathway for transition to permanent residency; and
  • Granting ‘skilled’ visa holders priority access to flights and hotel quarantine ahead of stranded Australians.

If the pre-COVID level of migration was restored, an extra 200,000 workers would enter the Australian labour market every year. This would necessarily drive up unemployment and put downward pressure on wage growth (other things equal), making it impossible to reach the new 4.5% unemployment target (let alone the 4% championed by Jericho).

Despite this threat, Greg Jericho refuses to question the Coalition’s immigration reboot because to do so would supposedly be ‘racist’ and ‘hatist’.

Yet it is precisely because of the Fake Left’s failure to rationally discuss immigration that ordinary Australians have been pushed to “the inherently racist parties” that Jericho hates so much.

Unconventional Economist

Comments

    • SnappedUpSavvyMEMBER

      wonder if anyone at the guardian is allowed to migrate to another position, and if you do can you talk about it

      do they have a work place culture, or lots of different work place cultures all competing in the one office, so in one corner its ok to force women to cover their face, but in the other all men are bad…

  1. Well Grey has bills to pay as well otherwise he will show up on that unemployment chart.
    Look, all this talk about lowering interest rates more, trying to stimulate spending, trying to lower unemployment sub 5 or 4 to get wages to grow to get inflation up is such an old tired song now. Japan tried and failed. Germany tried and failed. Everyone else is trying the same lever and hoping it works for them.

  2. kierans777MEMBER

    > But the proof is in the data.

    And that’s how the discussion should be framed. The Fake Left also need to stop giving fuel to the racists by refusing to have a grown up conversation about immigration.

    • GarethMEMBER

      Data is selectively picked at the guardian with a general narrative being migrants and women are disadvantaged, White Australians are racists and men have too much power. Any data which goes against that narrative is ignored. Female journalists seem to have a much more assertive tone when it comes to issues affecting women, the men tend to shut up and write factual pieces with selected data around economy, business and sport. The men who are talked about tend to be the arty types discussing a movie or book review, the masculine is generally not celebrated. I doubt any of this is by accident. Here is a snapshot from their opinion pages today;

      Female Agenda
      Some conservative commentators in Australia say it’s a ‘tough time for men’. Are they serious?

      Australian’s are all Racist
      Criminalizing citizens returning from India signals some are more Australian than others
      Stoking fears of war could serve China’s goals. Australian policy needs rethinking
      We need more, not less, critical thinking about race in Australia

      I am generally supportive of their environmental coverage as it removes much of the culture war stuff. They do go off the reservation a bit with certain elements of agriculture being dressed up as the grim reaper without understanding the deeper context behind it.

  3. Chinese contempt for Africans whilst they are working there on the Brlck and Road debt traps..

    Thats Real Racusm

    Australians are the least racist

    Most generous and gracious people on the planet.

    Such is thier generosity they show this Portuguese person the ropes on thier yacht so I can connect with my Lusitanian maritime heritage.

  4. My comment on his story and fair play to The Guardian, they allow you to make a comment, unlike the The Age and the Sydney Morning Herald which heavily censors its comment section: “”Lol, wont mention the role vastly increasing the labour supply since the GFC has had on declining wages growth. Because that would mean criticising mass immigration and in some left wing zealots eyes, it can never be criticised. Isnt it terrible, these reports that restaurants have had to vastly improve the salary offers for locally based chefs since the airports were shut? Oh terrible, no supply of migrant wage slaves to boost the bosses’ profits like we have had in the previous decades. They have had to raise wages to attract staff. Wont some one think about the bosses?””

    • BradleyMEMBER

      I get plenty of comments posted on SMH, some not popular. I find it more open than the Guardian by a mile. I do subscribe though which gets me priority apparently.

        • BradleyMEMBER

          I donated at the Guardian and numerous accounts were BANNED from commenting ever again and after 4 goes, I gave up. I write similar or even more controversial comments in the SMH and Fairfax prints most. And this was the case before I started paying them when Covid started.

          • Thanks for the info Bradley. I understand The Guardian can also censor comments, community standards, but I can navigate within that and still have a go at Jericho. However I understand they are also a bit touchy, especially when it comes to population and immigration. I find it amazing in the SMH and The Age that so many comments oppose high rates of population growth but their editorial and their opinion pieces never reflect that

        • I do find the Guardian comment section is better technically – as they comment goes up straight away (unlike the SMH where I no longer bother) … but it still makes me giggle when a perfectly normal comment by macro standards is later modded at the Graun. All those pinko no hopers – they don’t want to hear a different side.

      • DingwallMEMBER

        I think that’s the only way to get them to even peruse a comment. If you are not subscribed , the comment gets electronically shredded.
        At lease the SMH does not hit you with an immediate paywall to articles……. the Courier Mail LOL …… who even reads that TP.

      • Whether it reflects the ideology of the person on the day approving comments or not, but the SMH seems to vacillate between comments being either majorly for or against the same topic on differing occasions. Perhaps the editors aren’t too keen on ostracising half of their readership by being permanently committed to partisan approvals in the comments so they mix it up. The editorial direction doesn’t show the same variance.

    • Narapoia451MEMBER

      There’s a ton of comments on immigration on his article, I’ve not known the guardian to vendor anything that is communicated in a civil manner. But I am not as active there as I was.

  5. BradleyMEMBER

    I used to read the Guardian and comment, especially on Jericho’s articles. Over the last couple of years, they have severely restricted that and in particular, anyone who politely and with links, argued what LVO has stated, had their comment deleted. After being suspended a few times and despite contributing $, they banned me. I used a few different accounts but after it happened 4 times, I gave up. They are a joke and obviously like foreigners more than Australians.

    • Same. I used to read it a while back with pleasure but they have taken a pretty nasty turn to the hard left.
      Comments heavily moderated and anything that doesn’t match their narrative is deleted.
      Its now just endless virtue signalling and smugness as they feed a woke culture.

  6. Jeez I hate these dissembling mongrels. They know good and well what the truth is, but they’re not prepared to say it. How can 200,000 labour units workers added to the population every year not have an effect on the supply and cost of labour? FFS. 🙁

    And why oh why oh why are we importing highly skilled shelf stackers, trolley collectors and food delivery drivers. It’s enough to make a man rather cross.

  7. darkasthunderMEMBER

    The thing about the Guardian is that some of its a great read (Greg Jericho esp) and an important counterpoint to other MSM. But their fragility over migration, racism and ‘all diversity is good’ loses people’s respect. That and their fatuous use of the term ‘global heating’.

  8. Genuine story posted this week on LinkedIn by one of my connections: Connection is a finance recruiter and had secured a job in industry for girl currently working in a Big 4 accounting firm. She accepted the role and everything was all good to go. A few days later, she abruptly pulled out of the new role and decided to stay with the Big 4 firm. Upon prodding for more information from her, she admitted that, when she went to resign, the Big 4 firm promised to sponsor her sister (also an accountant) to come to Australia if she stays with them. Besides the ethical issues here, it just shows how easy it is for these businesses to import foreign labour. How can they make that promise to her if they are required to do labour market testing? They theoritcally can’t guarantee this as, if the advertise the role and an Australian applies for it, they would have to (again, theortically) go with the Aussie. It is all a farce, a ruse to make people think Australians are considered first.

  9. I quote”” Greg Jericho deliberately ignores one of the key drivers of Australia’s sluggish per capita GDP and wage growth: mass immigration. Why? Because it is supposedly racist to suggest that Australia’s immigration intake was far too high” …and that sums up the sad and sorry state of political and economic analysis in Australia today.

  10. Raging giantMEMBER

    It isn’t just lower wages that benefit the capital owning class is it? The other massive one is houses. The Coalition and Labor will be keen to turn on the tap to increase housing demand too. It’s an easy and lazy answer to the difficult questions of increasing wealth, just throw more people at the problem.

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