Leading immigration influencer, Abul Rizvi, has taken another shot at yours truly for making the observation that growing the labour supply at a record rate through immigration when the economy is slowing will inevitably drive up unemployment and lower wage growth:
Rizvi’s latest attack is based on an interview with Sky News aired on Friday (article here), where I was asked the following question by host Caleb Bond:
Caleb Bond: “Leith what is the reason for this increase in unemployment? I suspect it’s got something to do with rising interest rates, which is putting extreme pressure particularly on small business at the moment and they just simply can’t afford to employ more people”?
I responded with the following answer:
“It’s basically a two-fold factor. First of all as you said, interest rates have risen and what that’s doing is it’s obviously slowing demand across the economy. But the other factor that’s not well recognised is that we’ve actually had record labour supply growth from the Albanese Government’s record Big Australia immigration policy”.
“So effectively, we’re growing the labour supply so quickly that the economy needs to produce around 35 000 jobs per month just for the unemployment rate to stay constant. And this is record labour supply growth – we’ve never seen as many people come into the country at one time – it means… the demand for jobs isn’t high enough to soak up all those additional workers coming in”.
“So effectively, what we’re going to get over the next 12 months is we’re going to have obviously huge numbers of people coming in and the jobs growth just isn’t going to be there to soak them all up. And that means unemployment is going to rise and that’s going to also put downward pressure on wages”.
Perhaps Abul Rizvi can explain what is factually incorrect with my statement?
The RBA’s rate hikes are working to slow the economy and the demand for labour, as illustrated by the below chart from AMP chief economist Shane Oliver:
Source: Shane Oliver (AMP chief economist)
At the same time, Australia is experiencing labour supply growth at around double the pre-COVID level courtesy of the Albanese Government’s record immigration program:
In turn, CBA estimates that Australia needs to create 35,000 jobs a month just to keep the unemployment rate stable (other things equal):
However, this record labour supply growth, combined with slowing labour demand, has driven a large increase in the number of applicants per job, which portends rising unemployment:
How is this analysis factually wrong, Abul Rizvi?
Or is it that you cannot handle the truth and are jealous that somebody is able to explain the reality of the situation accurately and clearly to Australians, and is also getting widespread coverage in the media?
At least Abul Rizvi didn’t lower himself to labelling me racist for questioning Big Australia immigration, as he has done previously (for example, here and here).
