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Does Immigration Cause Unemployment?

In recent years, or maybe forever, most people assume immigration equals unemployment, whether that be media, unions, environmentalists, politicians and people in general.

From Ross Gittins in the Sydney Morning Herald:

 

Rise in employment all part of the service sector…..  Population growth is slower because fewer Kiwis are coming to Oz and more are going back home where, for the moment anyway, the economy’s prospects are brighter. As well, the end of the mining construction boom means fewer workers and their families are coming in under temporary 457 visas.  If the economy’s potential growth rate is lower, that means we can stabilise unemployment at a lower rate of actual growth. In our present circumstances, employment growth is probably being encouraged by the lower dollar and the exceptionally slow growth in wage rates.  Note that when the economy grows more slowly because the population is growing more slowly, we’re not left worse off in terms of growth in income per person. But lower immigration does make it easier to get on top of unemployment – something economists prefer not to mention.’

 

How population growth can make us worse off.  …. Just about every economist, politician and business person is a great believer in a high rate of immigration and a Big Australia. But few of them think about the consequences of that attitude – which does a lot to explain our economic problems.  The latest figures from the Bureau of Statistics show our population grew by 1.4 per cent to 23.6 million in 2014. Less than half this growth came from natural increase (births exceeding deaths), with most of it coming from net migration…. Lower immigration would help reduce a lot of our economic problems – not to mention our environmental problems (but who cares about them?).

 

Interesting the assumption of a high correlation, and causal link between ‘immigration’ (in Oz perceived to be and described as high due to conflation with temps) and ‘unemployment’, so much so that it has become a truism, but is it?  In fact evidence from Australia and internationally shows that immigration actually creates jobs, James Supple in article on Solidarity titled:

 

Immigration is not to blame for cuts to jobs and wages. The suggestion that bringing 457 visa workers from overseas is coming at the expense of “local jobs” reinforces the myth that immigration causes unemployment and drives down wages.  In his book, Immigration and the Australian Economy, William Foster’s surveys over 200 studies on immigration and wages. He found there was: “a marginally favourable effect on the aggregate unemployment rate, even in recession”.  In a 2003 paper economist Hsiao-chuan Chang wrote in ‘Immigration is not to blame for cuts to jobs and wages’ that:  “there is no evidence that immigrants take jobs away from the local Australian over the past twelve years… This supports the conclusion from existing research”.

 

In the past year UK Tory govt. was demonising the EU to appease it’s far right loon pond and UKIP (who view the EU as Marxist with its internationalist tendencies), it’s internal mobility, especially workers, so it commissioned research on the perceived link….. the report was shelved because it found no correlation (possibly the opposite).  There is another elephant in the room, how many baby boomers are either ‘holding chairs’ and staying in the workforce longer to top up their super, or to remain active (not a criticism, just an observation)?

More recently in Oz at an ACOSS conference via ABC RN Big Idea ‘Jobs of the Future‘, the real issue was highlighted, although significant unemployment, it’s more to do with the mismatch in skills needed for employment now, and the disconnect of the education and training sector with industry (ditto EU, churning out law, economics, arts etc. graduates for ‘white collar’ careers that no longer exist….)

The advice for anyone young wanting middle class mobility, or wishing to retrain, don’t just listen to your friends/family and enroll in higher education for vague outcomes, but do apprenticeships, vocational education and training; more from New York Times ‘A New Look at Apprenticeships as Path to the Middle Class‘.

For more information about employment, work and jobs in Australia click through here.

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