Unskilled immigration is good for Australia

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The Trans-Pacific Partnership might be the talk of the trade world at the moment, but we're missing out on the discussion of a bigger factor that doesn't include finance or goods, and has the potential to grow our economies and change the lives of millions of people for the better. It is: letting people move.

Chris Johnston illustration compares boring monoculturalism with lively multiculturalismGeorge Megalogenis' book Australia's Second Chancecontains valuable insights into long-held beliefs of the local settler population about migrants. He uses the example of a rally in 1849 organised by residents of Sydney against arrivals of more convict boats.

Workers who 'wanted to maintain their high-wage society', he writes, made 'the first of countless calls that would be made against migrants who threatened to undercut their standard of living'.

A contemporary example of this is the outcry that accompanies bilateral or multilateral free trade agreements, which include provisions about projects that can employ labour from overseas. A familiar refrain.

Over the last three decades, skilled migrants have accounted for an increasing proportion of visa grants, rising from 18 per cent in 1983 to almost 70 per cent in 2014.

Immigration is perceived as being beneficial only insofar as it contributes towards filling skills shortages to aid our productivity and global competitiveness, and isn't seen to be upending the status quo.

To this end it has succeeded. Steady levels of population growth and the high skilled characteristics of our migrants have strengthened our economy and, according to some accounts, even helped us avoid a recession in 2008. A recent report from the Scanlon Foundation investigating social cohesion finds that 85 per cent of respondents think multiculturalism has been good for Australia.

There is a downside to this. As a result of the excessive focus on skills that are in demand, there are no avenues for low-skilled potential migrants to live and work in Australia.

I have previously written about my family's and, by extension, my experience with low-skilled migration. I would not be in the privileged position I am in today were it not for my parents' decision to move elsewhere for better opportunities. Mine is not a unique story.

Michael Clemens, a senior fellow at the Center for Global Development, estimates that the gains that accrue to a country from reducing the barriers to immigration would far exceed those that accrue from reducing all barriers to trade.

Unfortunately, our debate about low-skilled migrants, to the extent that it occurs, seems mired by our attitude to asylum seekers and the view that our social fabric and indeed our labour market will not be able to withstand the effects of larger-scale immigration.

But this perspective ignores the fact the immigration is not a zero sum game where the gains of one group are exactly balanced by the losses of another.

For example, studies suggest that the increased employment of migrants does not mean there are fewer jobs for the rest of us. Immigrants and immigration create jobs and grow our economy.

Claims made against low-skilled migration are usually based on the misconception that an influx of unskilled workers will greatly depress local wages and lead to increased unemployment.

However the evidence on this is mixed, with studies concluding that the effects are usually either small or positive, and that negative effects tend to smooth out over time, as the economy adjusts and the new migrants attain the human and social capital needed for them to thrive.

In addition to attaining a better life for themselves, migrants also send home to their families some of the money they receive in the form of remittances. The World Bank estimates that remittances from migration are about US$404 billion. This amount dwarfs the global aid budget by about 300 per cent.

Notwithstanding these benefits, the problem with these perspectives is that they examine immigration in terms of the effects on either the country of origin or the host country but ignore the positive effects for the individual

In a world where three-fifths of a person's income is determined by their place of birth, it defies logic and should offend our sensibilities that we place arbitrary restrictions on people's movement to preserve our standard living.

 


Gabriela D'SouzaGabriela D'Souza is an economist based in Melbourne.

Topic tags: Gabriela D'Souza, George Megalogenis, unskilled migrants

 

 

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Existing comments

Its not about a "high wage" society but of societies that have inherited a high income tax regime that pushed wages up to meet cost of living. Low wage compensation for unskilled migrant labour in particular will not alleviate Australia's issues and problems especially when we have 25% to 35% unemployed workforce that lack LLN skills. It will cause huge social issues that the so called high wage end like yourself perhaps may never experience in reality.
Richard | 09 November 2015


I don't think you should draw a comparison between convicts and other migrants. The business men of the time wanted convicts because they were virtual slaves with no rights.
Terry | 09 November 2015


Everyone's good at something. Maybe not 'skilled' in the traditional sense but everyone can contribute. Instead of aiming to be the clever country, why not the caring country. I like that penultimate paragraph Gabriela.
Pam | 09 November 2015


I agree! I don't know why we can't be more creative about this. I'd love to help develop a Snowy Mountains migrant scheme for inland Australia. Something that would create jobs, expand settlement and welcome refugees.
Carol | 09 November 2015


Unskilled immigration was good for this country when we had tariffs to protect the goods that unskilled migrants made against imports from low-wage countries. At that time, we had a much more diverse economy, with textile clothing and footwear, white goods, electronics, tools and building hardware, vehicle building, and many other sectors, replete with the scientific, engineering, and other specialist skills that we're need to complement the less-skilled workers. Now, we don't have that protection or any of those skills or employment opportunities, just coffe shops and home maintenance. HH will tell us that's one of the advantages of a 'free market', but to be really free, the movement of labour should also be free. And the monopoly power of big business needs to be thwarted. We are not going to get either of those from the economic rationalists in power here or elsewhere.
Ginger Meggs | 09 November 2015


Great piece Gabriela. It is a subject that needs further airing. My question is: why is it so hard to find and disseminate information that shows the benefits? Time and again, all we get is knee-jerk fear reactions to migration issues.
Karen | 10 November 2015


Great article Gabriela, it is refreshing to see a discussion of immigration with some historical perspective, and comparison with the freeing up of barriers to trade!
David Feith | 13 November 2015


I'm not sure if you're in the modern world. Most likely the convicts were paid $0 back in the day for a start, but to use that as some sort of reason to bring masses of unskilled migrants into this country into today's welfare economy is absurd. We have large industries closing down left, right and center spewing out huge amounts of skilled and (more) unskilled high paid workers - i know i'm one of them. To bring immigrants into this situation is asking for trouble.
Michael | 13 November 2015


Hear, Hear. Unskilled migration and education migration are the best way that Australia could could do to end hunger and promote peace. A well fed peaceful world would also have less children meaning the planet benefits more than your bank balance.
Walter | 14 November 2015


I am from India.I am a graduate.can work in Australia.is there is to find a job .
satyavir singh | 14 February 2016


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