Immigration, population and economics

Below are excerpts taken from chapters 7 and 8 of Mark O'Connor's 1998 book This Tired Brown Land. In these chapters, O'Connor exposes the fallacious economic arguments used to justify high immigration and reveals the real economic costs of immigration.

On the claim that immigration is a great boon for the economy:

The immigration lobby argues that since migrants create a 'demand' for goods and services, they benefit the economy. As one commentator remarked, if things were as simple as that, we could do the economy a power of good by burning down our suburbs at regular intervals. Unfortunately, much of the 'demand' created has been of the sort that sucks in imports rather than generates export industries. The years of high immigration in the late 1980s were plagued by current account problems.

The battle between nations today is to create exports, or import-replacements, not to stimulate internal demand. In a sense we are locked in a friendly but fierce trade war in which our assets are the things we can export (or can do without, or can produce at home) and our liabilities are the imports our population demands.

After years of boosterism by the [former] BIR [Bureau of Immigration Research], the BIR's Lyn Williams finally summed up its research and conceded that the economic advantages of immigration were at best minimal or possibly neutral. Hardly the sort of economic bonanza you'd risk ruining your country for!

***

... boomers often justify high immigration on the grounds that it 'stimulates' the economy. The Sydney Institute, for instance, is a privately funded 'think tank' which is strongly immigrationist. In one guest article in The Canberra Times Anne Henderson, Deputy Director of the Institute, suggested that those who can't see the benefits of higher immigration are irrational Hansonists. By contrast, she tells you, "The rational mind know [that] added numbers of people in a country create jobs in the housing and retail markets, and so on. ... Australia's state premiers (Bob Carr is an exception) are on to this. ...They want immigrant numbers based on population needs (read economic needs) not ad hoc political decisions (read populist prejudice). ...The tide could be turning. Growth in Australia needs people. Industry leaders such as Tony Berg, at Boral, agree. ...National interest in the benefits of immigration in Australia could be making a comeback." Henderson spends half her article 'poisoning the wells' by talking about 'racism'. Replying, in a letter to the editor, the Canberra environmentalist Colin Samundsett remarked "Anne Henderson rides a Trojan Horse constructed out of race to assail her target of having our immigration increased. While wearing the cloak of scholarship woven by the Sydney Institute, in this instance she is attired more like Lady Govina. ...This latest text seems to be a political handout rather than a seriously assembled critique for Australia."

Anne Henderson is only one of many who confuse an increase in 'demand' or in GDP with a better quality of life. In fact, unless a per capita growth in GDP (or better, in real quality of living) can be demonstrated, most individual Australians do not benefit at all financially. In other words, whether we are talking jobs or pay or wealth, few us of benefit from a slightly bigger cake if there are far more people than before to divide the cake up among. This fundamental truth, pointed out repeatedly in the [former] Coalition government's own Mortimer Report, Going for Growth, has been hidden from the Australian people in a propaganda effort supported by sections of the media and by both the major political parties.

On the costs of immigration:

According to Swinburne University's Katherine Betts, the likely negative effects of immigration include:

* Adverse effects on the balance of payments.
* The diversification of resources to infrastructure.
* Diseconomies of scale in the cities that have passed their optimal size (considered to be around 500,000 people).
* Waste of human resources by the neglect of local training.
* Pressures toward capital widening at the expense of capital deepening. (We can ill afford to be a nation that invests mainly in real estate.)

The last point is most important. On average, in all big and small businesses in Australia in 1995, it took about $117,000 of capital to provide one job. This means that billions of dollars of additional capital will be required to get our unemployed into the workforce. As we have no surplus savings in Australia, the capital for new jobs will have to be borrowed from overseas, thus further worsening our balance of payments.

In 1989 Stephen Joske, an economist with the Parliamentary Research Library, estimated that immigration had produced a $7-$8 billion shortfall in investment capital (at then-current immigration levels) for public infrastructure. In other words, the amount of money, which might otherwise have been used to improve existing infrastructure (e.g. schools, public transport) had gone instead into providing basic infrastructure (e.g. roads, sewerage) for immigrants. Joske calculated that the necessary capital investment was some $80,000 (in 1989 dollars) per immigrant. Some of this money the migrants bring with them, but most of it must come either from within Australia or from overseas borrowings. Either way this increases Australia's foreign debt and foreign liabilities. This also puts pressure on interest rates by causing Australia to be seen as a less attractive or riskier borrower, and thus impacts negatively on many sections of the economy.

Properly controlled experiments are rare in economics; but Colin Teese, former Deputy Secretary of the Department of Trade, has pointed out that First World countries over the past forty years have in effect carried out one: a control experiment on the effects of population growth on per capita wealth. The four countries that deliberately sought to increase their populations through immigration - Australia, New Zealand, Canada and the U.S. - all slipped backward badly relative to the rest. A likely reason, Teese suggests, is that too much of these countries' investment has gone into housing, services, and speculative real estate buying (because immigration produces continually rising real estate prices) rather than into capital-intensive production to produce exports and replace imports.

***

In 1996 Oliver Howes revealed in the Canberra Times that the BIR had published, but had failed to publicise the crucial conclusions of two 1992 books which itemised the costs of immigration to federal and state budgets. Despite the expense of these major studies, the BIR (which had never been accused of lack of diligence in publicising research that could justify high immigration) failed to add up the costs itemised in these books and thus show the total average cost per migrant - a figure one might have thought of some interest to taxpayers and government. In particular, the BIR failed to adequately publicise the implications of the study Immigration and State Budgets by Professor Russell Mathews, which painstakingly calculated and disaggregated the various immigration costs to the taxpayer in the average migrant's first five years. When his itemised per capita costs are added up they come to around $16,762 per migrant at state level. When one adds to this the figure of $8,962 at federal level (provided by the other BIR study), the result would seem to be a total cost of $25,724 per immigrant at State and Federal levels combined. Costs at local government (never properly established) may be relatively minor, but an overall cost of $26,000 per immigrant can be considered conservative. The BIR failed to publicise either the total state costs figure or the combined state plus federal figure. It was only some years later that Oliver Howes did this calculation and published the results in the Canberra Times.

The situation then turned out to be even worse. The BIR had failed to ensure the two studies were compatible. In counting all the monies that migrants contribute to state government budgets, Professor Matthews had meticulously included a per capita share of Commonwealth Funding Grants to the States. (These are essentially a return to the states of a share of the income tax which the federal government collects.) But the authors of the study of costs and benefits at federal level had failed to count these payments as a deduction from the federal budget. When adjustment is made for this inconsistency, the per capita cost per migrant turns out to be $34,500.

***

The former BIR conceded that there might be long-term environmental and economic costs (especially with balance of payments) caused by immigration-fed population growth, but it denied that state or federal governments could reap budgetary benefits by cutting immigration. This seems to be completely wrong. Mathews' figures (available to the BIR since 1992, yet oddly neglected by them) leave no doubt that reducing immigration would provide large savings in both the short and medium term to both state and federal budgets. His figures also leave little doubt that to use immigration as, in effect, a form of 'industry subsidy' cannot be defended as being in the public interest.

On the alleged economic benefits of a larger population:

Some have claimed that a larger population is better for the economy. In an 'Occasional Monograph' (May 1993) titled Ten of the Most Dangerous Myths in Australia Phil Ruthven, chairman of Ibis Business Information, commented: "Rubbish! Twelve of the Top 20 standard of living countries have lower population levels than Australia; and Australia once had the world's highest standing of living with four million people."

On immigration, wages and jobs:

Despite the prevalence at its public conferences of people claiming that "immigrants create jobs", even the Bureau of Immigration Research did not normally claim this. Its formal papers usually argued simply that the economy would adjust to an increased workforce. Wages would fall (an assumption that was tactfully not emphasised) and this would enable employers to put on more staff.

The BIR's final word was in an in-house publication by Lyn Williams, already referred to. After turning the evidence this way and that she concluded the effects of immigration upon the economy and unemployment are close to neutral (or, as the pseudo-medical jargon of economists puts it, "benign"). Even the distinctly slanted fact-sheets provided by the Department of Immigration merely claim that "Research over recent years shows that immigration does not have an adverse effect on the overall unemployment rate" and "The consistent result of research is that immigration does not adversely impact on thhe aggregate unemployment rate."

The last claim, as we shall shortly see, is untrue. It seems unwise for the present Department of Immigration to lean so heavily on the authority of the former BIR, an organisation which awkwardly combined public relations and research functions. As sociologist and immigration expert Katherine Betts puts it, the BIR commonly assumed that adding to the labour force, even in a time of unemployment, would produce a fall in wages that would lead to more jobs being created and thus to no long-term increase in the percentage of the population unemployed. This logic, she points out, ignored both the long-term disappearance of demand for manual labour (important because so many immigrants seek manual work) and the 'stickiness' of wages which (because of factors like unions and wage agreements) do not automatically fall according to the law of supply and demand.

***

It is claimed that more people (whether immigrants or native-born babies) create 'demand'. But do they create a job's worth of demand each? Perhaps only if their demands become more 'frivolous'. Otherwise economies of scale will mean there is less work to be done. Consider, for instance, how much work it would be in an isolated community of just 1,000 people to provide shoes, boots, sandshoes, sandals and slippers in all the styles and sizes that different men, women and children would require. No wonder that craftnames like Shoemaker, Carpenter, and Taylor were numerous in early communities. A significant proportion of the population would have to be in the footwear trades alone, even with modern technology. But if we scale that population up to 100 million, then only a small proportion of it would need to make shoes. Increasing the population does not necessarily increase jobs at the same rate.

The econometrician Matthew W. Peter has disproved the boomer's claim that for every job an immigrant takes another job is created for the existing population. He showed that this was based on a mis-use of the Orani computer model of the economy. When more fact-based assumptions were fed in, for instance that wages are 'sticky', the same Orani model gave the opposite conclusions: that bringing in immigrants does cause unemployment, as well as problems with balance of payments, and a string of other undesirable effects. Unfortunately, disinterested academics like Mathew Peter did not have the public relations expertise of the BIR, and the BIR's unreliable claims continue to be repeated as gospel by some defenders of existing levels of immigration, and in the media.

A further problem is that many of the jobs migrants do create are unproductive. We pay a fortune for consultants and teachers to ameliorate the linguistic and other problems of immigrants; but only from the perspective of those so employed are these problems a boon. For the taxpayer they are a drain and an expense.*

The Melbourne pyschologist and author Valery Yule has commented: "The jobs immigrants create are mainly ones which are profitable to builders and developers: raising the price of land, requiring more housing, resulting in more medium-density housing replacing our world-famous 'quarter-acre-blocks' and wrecking in Melbourne all hope of a Garden City. Requiring more schools, hospitals etc. is not a bonus because they have to paid for from the public purse. Immigration as a source of job creation is a non-ending job creator - it has to keep running to keep creating, and it puts more pressure on our resources. The way things are today, the more immigrants we take, the more imports we tend to buy, and the greater our foreign debt."

***

Apart from failing to recognise that wages are 'sticky', the BIR's calculations also ignored the fact that the unemployment problems created by immigration are not spread evenly across the spectrum of occupations (which would make them easier to solve). For instance, immigrants help provide a great surplus of skills in areas like engineering and sewing. This does not only lead to massive and expensive unemployment (and disillusion) among recent immigrants, it also threatens the employment and salary prospects of anyone currently employed in these professions. (For some years in the 1980s we were actually importing more engineers than we were graduating.)

***

William Mitchell, Head of Economics at the University of Newcastle, has recently raised a more technical objection. He points out that the claim made by many immigration lobbyists that immigration doesn't cause unemployment "completely ignores the question of whether the growth needed to absorb the higher population is sustainable, given the problems Australia has with external debt."

Indeed, he points out that the claim is based on logically incompatible premises: "Unemployment is affected by two factors: increases in the productivity of labour and increases in its supply. Both of these factors could, in principle, be offset by strong economic growth. But, if the economy grows fast enough to accommodate both productivity gains and the addition of migrants to the labour force, it will draw in more imports and the balance of payments will deteriorate. Economic growth of around 2% per annum may be all that we can sustain without increasing our foreign debt. This level of economic growth is not enough to reduce unemployment in the face of any net immigration (or any growth in labour productivity)."

On immigration and socio-economic inequality:

...unemployment is not the only way in which population growth penalises those most vulnerable. As the Sydney University economist Frank Stilwell points out "Economic inequality is fuelled by urban growth, because the inflation in the urban property market benefits existing wealth holders at the expense of new entrants. It also intensifies the fiscal crisis of the state because of the costs of infrastructure - providing the water and sewerage systems, the energy supply networks and so forth. The costs of such infrastructure tend to rise more rapidly than the capacity to fund them through taxation or user charges."

Thus as population grows, whether by immigration or by natural increase, the poor cop it in a variety of ways. Stagnant wages, higher home costs and mortages, less certainty of keeping their jobs (and less chance of changing or choosing where they work). And as government budgets collapse, the social security net is ripped, or unravels.

* Economist Stephen Rimmer noted in 1992, "The lack of English language skills in the workplace imposes substantial economic costs in the form of lost productivity and reduced international competitiveness. For example, in 1989 the OMA estimated the poor English language skills cost Australia A$3.2 billion each year in additional communication time needed in the workplace. This estimate was used to justify more government spending on English language training. In addition, it was claimed in a report published by the Federal government-funded Bureau of Immigration Research that lost output owing to unemployment caused by lack of English language skills could be as high as A$1.6 billion per year. ...In all, the lack of English language skills in the workplace could cost Australia over A$5.4 billion per year - equal to 1.5 per cent of Gross Domestic Product (GDP)." Source: Rimmer, S., "The Cost of Multiculturalism", The Social Contract, Volume 3, Number 1 (Fall 1992).

Legrain strikes again

Remember Philippe Legrain? The author of the puerile Immigrants: Your Country Needs Them (read Peter Brimelow's scathing review here) is back in the Antipodes once again, preaching the usual open-borders dogma. This time, however, he is in New Zealand.

Michael Courtman of NZ Conservative writes:

Immigrants can't find jobs, so increase immigration

The Press reports that a visiting international economist Philippe Legrain has told New Zealand that it shouldn't cut immigration during the recession

At a Department of Internal Affairs-sponsored meeting in Christchurch, Mr Legrain spouted the usual Economist-style arguments about immigrants boosting creativity and being essential to economic growth, without providing any evidence of how such growth is supposed to boost the living standards of existing citizens.

Instead of trying to protect their jobs by calling for a slowdown in immigration, he said local workers should take it on the chin and direct the blame on "the bankers in the United States," (I wonder if that includes those who lent too much money to recent minority immigrants).

He also said that New Zealand needed more Asian immigration so it could take advantage of the expanding markets in East Asia, while overlooking the fact that the country already has thousands (if not hundreds of thousands) of well-educated Chinese, Japanese and Korean speakers, should our export companies require their services.

To illustrate his total disregard for the concerns of local workers, he even admitted that thousands of recent skilled immigrants are struggling to find work as it is:

"During the two weeks he has been in New Zealand, Legrain said he had heard a lot of stories that highly-skilled migrants were unable to get jobs in New Zealand either because their qualifications were not recognised here or companies wanted people with New Zealand experience."

If recent immigrants are already being passed over by local employers, then maintaining high immigration levels during a recession will only make it even more difficult for them to find jobs.

What I think Mr Mr Legrain is really saying here is that because many immigrants are failing to find suitable employment, the country needs to bring in more immigrants to compensate for these lost "units of production," so as to maintain a high rate of economic growth that enriches our elites and avoid any empty berths in Auckland's yacht marinas.

Of course immigration-based economic growth doesn't increase per capita income unless it also lead to an increase productivity levels, and there's little evidence that productivity levels have increased much since National's neo-expansionist immigration drive began in 1990. This can be seen most starkly in the relationship between house prices and wages - since 1990 median house prices have almost tripled, while the average wage has only increased by about 40 percent.

Unfortunately while most people probably aren't particularly impressed by Mr Legrain, John Key apparently is. Recently he announced that National won't be aiming to cut immigration during the recession, and will be sticking with its expansionist target of 45,000 immigrants per year.

That may not sound a lot to overseas readers, but for a small country of 4.2 million, it represents a higher figure than most other developed countries, particularly for one which has little labour intensive industry and derives most of its income from primary production and tourism.

Why doesn't Australia have local labour market tests?

From The Australian:

MORE jobs could be preserved if the Rudd Government introduced a local labour test before allowing employers to sponsor migrant workers in permanent jobs, a top demographer said yesterday.

Bob Birrell, from Monash University's Centre for Population and Urban Research, said the Government's decision on Sunday to cut the annual intake of skilled migrants by 18,500, or 14 per cent, over the next three months was necessary in tough economic times.

The downturn's severity has forced the Government to remove construction workers, including plumbers, bricklayers and carpenters, from the list of skilled workers employers can bring in on the 457 visa scheme.

"It's a significant policy shift because it implies the Government will restrict skilled migrant programs to employer-nominated permanent jobs and what remains on the critical skills list," Professor Birrell said.

"But the way the rules are written, there is no requirement an employer establishes that before he sponsors a migrant no one in the domestic labour market could do it," he said. "In 2007, there were over 8000 such permanent jobs, and while some were high-end corporate-type sponsored jobs, many weren't."

Others were less convinced of the need for such a sharp cut in skilled migrant numbers, although Immigration Minister Chris Evans said he would go deeper if the downturn warranted.

However, Senator Evans said he did not anticipate further cuts to the program this financial year.

"I think the cabinet will make a decision on next year's program as part of the budget and again, I would expect us to run a smaller program than we started out with this year," he said.

One of Kevin Rudd's closest allies in the business community, Australian Industry Group chief executive Heather Ridout, said now was not the time to cut back.

"While pressures are building on employment, shortages remain critical in a number of skilled trades," she said.

Australian National University demographer Peter McDonald was also wary. "A 14 per cent reduction in the current economic climate is understandable and manageable, but the Government needs to bear in mind the importance of migration to meet long-term skilled labour demand, particularly when the country starts to pull out of its financial difficulties," he said.

ACTU president Sharan Burrow described the decision to cut the quota as prudent, given the economic conditions.

"It's a chance to get the balance right to make sure that there is optimism to be able to get a job, earn a living wage for migrant workers," she said.

Perth builder Gerry Hanssen said his 457 workers helped his business through the boom and he believed their contribution to the state entitled them to stay.

Among them is welder Daniel Gucor, who came to Perth from The Philippines three years ago and dreams of citizenship.

Foreman Senan Amjedi-Effendi made Mr Gucor his employee of the month a few weeks ago and says the 28-year-old "is worth 10 other workers".

Why doesn't Australia have any labour market tests? While other immigrant-receiving countries require labor market tests and/or strict quotas before admitting overseas workers, Australia doesn't. These lax requirements mean that the system is wide open to exploitation by employers seeking access to cheap labour. Such easy access to foreign labour not only serves to drive down domestic wages, it also acts as a disincentive to recruiting and training Australian workers. Access to a never-ending stream of foreign workers also serves as a disincentive to labour saving investment. The same labour saving investment which drives innovation and productivity, both of which are sorely lacking in Australia at the moment.

Also take note how immigrant minorities prefer their own kind over native-born Australians. Senan Amjedi-Effendi, himself obviously coming from an immigrant minority background, claims that Philippino immigrant Daniel Gucor is worth ten (presumably Australian) workers. Why exactly is that? Because he is prepared to work for less and accept lower working conditions?

Of course, we are meant to feel sympathy for Daniel Gucor who dreams of one day gaining Australian citizenship. Personally, I feel more sympathy for those native-born Australians now directly competing for jobs against immigrant workers from the Third World.

The ABC's pro-immigration bias on full display once again

In a report about the Rudd Government's recent announcement that it was making some modest cuts to Australia's skilled immigration intake, the ABC's Richard Lindell states:

"Skilled migrants have been one of the key drivers of economic growth over the past decade.

In fact, an Access Economics report for the Government forecast that this year's intake will add more than $800 million to the economy."

Notice how Lindell makes the completely unsubstantiated claim that immigration has been one of the prime drivers of economic growth over the last decade, and then proceeds to cite an Access Economics report as evidence of the economic "benefits" of immigration. However, put in its proper perspective, we find that these "benefits" amount to a $800 million increase in gross domestic product in a $824.9 billion economy — an increase of 0.08 percent. That works out to be a whopping increase of about $36 for every person in Australia. And when balanced against some of the substantial costs of immigration, such as downward pressure on wages, higher housing costs, increased consumption of natural resources, a larger current account deficit, and increasing welfare and tax burdens on state and local governments, these "benefits" disappear.

Also note how Lindell quotes some economists, both of which are employed by firms which have a strong financial interest in ongoing immigration, who complain, among other things, that less immigration will ease pressure on housing, thus making it more, shock horror, affordable! We can't have that, now can we?

Given that our public broadcaster has allowed itself to become a mouthpiece for the growth lobby, it is no wonder that many Australians have been duped into putting up with ridiculously high immigration levels for so long.

The case for zero net immigration

From Online Opinion:

Zero immigration and sustainable populations

By Eric Claus
Wednesday, 5 November 2008

In April 2006 the Australian Government Productivity Commission published a report entitled Economic Impacts of Migration and Population Growth. The study included economic modelling of an increase in skilled migration of an extra 50,000 migrants per year, for 20 years, compared to the skilled migration numbers in 2004-05. Some of the conclusions were:

• economic gains accrue mostly to skilled migrants and capital owners (page 151);
• hourly wages will drop slightly under high immigration (page 161);
• the incomes of existing resident workers grows more slowly than would otherwise be the case (page 151);
• these results are consistent with research both in Australia and overseas (page 161); and
• environmental impacts are likely to impose a drag on productivity and living standards, but the details are "too hard" to quantify (page 122).

This is not a report by some racist group that wants to limit immigration to keep Australia white. This is not a report by some deep green environmental group that wants everybody to live in communes and wear jute shirts. This is the Productivity Commission. The Productivity Commission - primarily an economic research organisation.

If the economic case only benefits the capital owners and makes the average citizen worse off economically, without even considering environmental and sustainability impacts, why is it being done?

The obvious answer seems to be that the capital owners are running the show for their own benefit, at the expense of the average Australian. And why shouldn’t they. Their goal is to maximise profits and high immigration helps them do that. High immigration increases the supply of workers. Increased supply of labour, lowers the cost of labour. Lower labour costs means an increase in profits.

High immigration also increases the supply of consumers. Increased demand means higher prices. Higher prices mean increased profits. It’s a double bonus. Higher profits from lower labour costs and higher demand. Whoopee.

But something that obvious would be quickly exposed by the ever diligent media. Or perhaps they have other incentives. On October 28, the Sydney Morning Herald ran an editorial entitled “Keep the doors open”. The sales pitch is that Australia needs high immigration to have solid economic growth and then the implication is that this economic growth will benefit every Australian. But it just isn’t so. The editorial writer’s trick is to say that “the 2006-07 migrant intake benefited the economy by $516 million in the first year” and then we are supposed to think that we got some of that $516 million. The SMH is smart enough to make sure they don’t mention that the average Australian gets none of that massive $25 per person.

With a significant part of newspaper profits coming from real estate advertising, it is not hard to understand why newspapers pump up the housing market, but how far can their logic be stretched. They admit that there is a housing shortage, rents are too high and finance is hard to get in the current climate, so the answer is … wait for it … bring in a lot more people to increase the demand for housing. That will make housing harder to obtain, rents will become higher and finance harder to get, but it will increase profits for the housing industry. At least we know who comes out ahead.

Another angle we hear is that we need immigration because we have a skills shortage. What that really means is: we have a skills shortage at the salaries we are willing to pay. We never have a skills shortage for investment bankers. We always have plenty of them, because they get paid a motza. We have a shortage of qualified tradesmen because it is a really tough job that doesn’t pay very well. If the pay was increased, there wouldn’t be a shortage of qualified tradesmen, but that would reduce the profits of the construction companies and factory owners. The easier solution, for business, is to call for increased skilled immigration to keep wages down and profits up.

The skills shortage is a major change from the usual “can do” attitude of business. For example:

• ask business what we should do about climate change and they respond, “Business can sort that out - use market forces with a carbon trading scheme and use geosequestration in coal fired power plants”;
• ask business what we should do about water shortages and they respond, “Business can sort that out - build new desalination plants, dams and pipelines”;
• ask business what we should do about Fossil Fuel depletion and they respond, “Business can sort that out - replacements for petroleum will be found as soon as the price gets high enough”;
• ask business what we should do about depletion of farmland and they respond, “Business can sort that out - market forces from higher food prices will give farmers incentives to repair their land”; then
• ask business what we should do about the skills shortage and they respond “Oh, nothing we can do. Government needs to bring in lots more skilled migrants or the Australian economy will fall apart.”

Another issue sometimes associated with immigration is the ageing population. Most commentators know that increased immigration doesn’t significantly slow the ageing of the population, because the average age of migrants is only a little less than the average age of the overall population and migrants age, just like existing residents. Not everybody is clear about that, though.

A few years ago, Louise Markus, Federal Liberal Member in the seat of Greenway, rang me in response to a letter I wrote her regarding the negative environmental impacts of increased population. She said something like “But Eric, we need increased immigration to battle the effects of our ageing population.” I said immigration doesn’t do anything for the ageing population and the phone went quiet for a few seconds. She then said “Well I don’t think most of the people in Greenway agree with you on population.” Game, set and match.

What really mattered to her, and to all politicians, is what the majority of voters think. Politicians don’t need to clutter their minds with logical arguments, as long as they are on the same page as the electorate.

It would be easy to blame business for lowering our standard of living and politicians for being their accomplices, but that is wrong. It is NOT up to business to make Australia sustainable (although it would happen more quickly if they led the way). It is up to the citizens of Australia to vote in the politicians who will best serve their interests. Both major parties now serve the interests of big business.

We have given business the goal of making profits for themselves and they have done that very well, and provided us with the goods and services that make Australia one of the best places on earth to live. When business is given limitations and guidelines, they adapt to those guidelines and continue to produce the high quality goods and services that make Sydney such a great place to live.

If Australia adopted net zero immigration and made efforts to become more sustainable, business would adapt and smart businessmen would continue to make millions and billions, because the changes would not be that great. It is also likely that the average Australian would be better off and the average Australian’s children and grandchildren will be better off in the future.

Eric Claus has worked in civil and environmental engineering for over 20 years.

Original article

Foreign student influx adversely affecting overall workforce conditions

From The Age:

Foreign students being exploited

Tom Arup
June 12, 2008

NEARLY 60% of international students in Victoria could be receiving below minimum wage rates, a study by Monash and Melbourne university academics has revealed.

Interviews with 200 international students drawn from nine universities across Victoria revealed that up to 58.1% of students surveyed were paid below $15 an hour, with 33.9% receiving less than $10 an hour.

The results from a $3 million Australian Research Council-funded study come just a month after hundreds of taxi drivers, many of whom were students from India, protested against conditions in their industry outside Flinders Street station.

The study also found:

■ International students are often pressured to take jobs not wanted by domestic workers.

■ At least a third work more than the 20 hours allowed under study visas, forcing them to take jobs "off the books" with no industrial relations protection.

■ The influx of international students working outside industrial relations controls adversely affects overall conditions in the workforce.

■ The problems started in 1991 when international students rights in the workplace were narrowly defined as the "right to work" by the federal government.

One of the academics involved in the study, Professor Chris Nyland, yesterday told The Age he was happy there were signs the Victorian Government was developing policy options. But he hit out at the Federal Government for its "protracted" reply.

"The Rudd Government has shown no sign of recognising this as an issue," Professor Nyland said. "There was a 94-page higher education discussion document (from the Rudd Government) that was issued. I have gone through that and there is lots of references to international education, lots of references to international student fees, nothing in there about international student welfare."

The office of acting Prime Minister Julia Gillard — who is also Minister for Employment and Workplace Relations and Minister for Education — did not return The Age's request for comment yesterday.

Victorian Workplace Rights Advocate Tony Lawrence said a number of complaints about exploitation had been made to his office by international students. He also said he was aware of some employers asking $200 for certificates verifying employment which is often needed as part of immigration conditions.

It is believed the Victorian Government is now considering a cross-departmental taskforce into international student welfare among other options. However, a spokesman for Skills and Workforce Participation Minister Jacinta Allan was tight-lipped yesterday on any future plans.

Source

The case against immigration

From the Sydney Morning Herald:

An inconvenient truth about rising immigration

Ross Gittins
March 3, 2008

JOHN HOWARD never wanted to talk about his booming immigration program. It seems Kevin Rudd's lot doesn't want to either. Why not? Because it just doesn't fit.

For Mr Howard, it didn't fit politically. Didn't fit with the xenophobic rhetoric he used to win votes back from Pauline Hanson and to wedge Labor.

For Mr Rudd, it doesn't fit with any of his professed economic concerns - about inflation, about mortgage stress and about climate change.

You'd hardly know it, but we're in the biggest immigration surge in our history. According to Rory Robertson of Macquarie Bank, net immigration has exceeded 100,000 a year in 12 of the past 20 years, having exceeded 100,000 only 12 times in the previous two centuries

*snip*

The third point in Mr Rudd's five-point plan to fight inflation is to "tackle chronic skills shortages", and part of this is to do so through the immigration program. Clearly, the Government believes high levels of skilled migration will help fill vacancies and thus reduce upward pressure on wages.

That's true as far as it goes. But it overlooks an inconvenient truth: immigration adds more to the demand for labour than to its supply. That's because migrant families add to demand, but only the individuals who work add to supply.

Migrant families need food, clothing, shelter and all the other necessities. They also add to the need for social and economic infrastructure: roads, schools, health care and all the rest.

Another factor is that their addition to demand comes earlier than their addition to labour supply. Unemployment among recent immigrants is significantly higher than for the labour force generally.

Admittedly, the continuing emphasis on skilled immigration - and on the ability to speak English - plus the fact that many immigrants are sponsored by particular employers, should shorten the delay before they start working.

Even so, we still have about a third of the basic immigration program accounted for by people in the family reunion category. You'd expect the proportion of workers in this group to be much lower. So though skilled migration helps reduce upward pressure on wages at a time of widespread labour shortages, immigration's overall effect is to exacerbate our problem that demand is growing faster than supply.

The Rudd Government professes to great concern over worsening housing affordability. First we had a boom in house prices that greatly reduced affordability, and now we have steadily rising mortgage interest rates.

The wonder of it is that, despite the deterioration in affordability, house prices are continuing to rise strongly almost everywhere except Sydney's western suburbs.

Why is this happening? Probably because immigrants are adding to the demand for housing, particularly in the capital cities, where they tend to end up.

They need somewhere to live and, whether they buy or rent, they're helping to tighten demand relative to supply. It's likely that the greater emphasis on skilled immigrants means more of them are capable of outbidding younger locals.

In other words, winding back the immigration program would be an easy way to reduce the upward pressure on house prices.

Finally, there's the effect on climate change. Emissions of greenhouse gases are caused by economic activity, but the bigger your population, the more activity. So the faster your population is growing the faster your emissions grow.

Our immigration program is so big it now accounts for more than half the rate of growth in our population.

It's obvious that one of the quickest and easiest ways to reduce the growth in our emissions - and make our efforts to cut emissions more effective overall - would be to reduce immigration.

Of course, you could argue that, were we to leave more of our immigrants where they were, they'd still be contributing to the emissions of their home country. True. But because people migrate to better their economic circumstances, it's a safe bet they'd be emitting more in prosperous Australia than they were before.

My point is not that all immigration should cease forthwith but, leaving aside the foreigner-fearing prejudices of the great unwashed, the case against immigration is stronger than the rest of us realise - and stronger than it suits any Government to draw attention to.

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