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Unemployment & immigration

The Australian unemployment rate has hit a 12-year high at 6.4% – the highest since 2002 and higher than the US unemployment rate for the first time since 2007. Good market for equities markets this means the RBA will almost certainly not increase interest rates any time soon and may cut them further.  Of course disastrous for people such as myself who will probably soon be on the job market.   While the Treasurer has argued that these figures provide motivation to pass the budget – they do no such thing – the obvious candidate for policy is our immigration intake.

Currently Australia is taking in net 240,000 immigrants annually – it adds nearly a million people to our population every 4 years.  709,000 immigrants have arrived since the beginning of 2011 and 380,000 of these have got jobs. During that period 400,000 jobs were created net.

There are Ripley Believe-it-or-not economic theories  (often propounded by ANU economists) that these immigrants create jobs by adding more to aggregate demand than supply but this clearly is not the case at present.  What can be expected is that as unemployment increases the demand for immigration will weaken a little.

As much as I am concerned about the current unemployed I am even more concerned by forecasts that, at this rate, Australia’s population will be 40 million by 2060 and 50 million by 2100.  Sydney’s population will grow 80% and Melbourne’s population will double by 2060. Do Australians really want to live in mega-cities

It is almost politically incorrect among the latte left to criticize anything relating to unrestrained high immigration but I do.  The implications of high rates of immigration for the economy are modestly positive at best.  With high international capital mobility most of the labour market benefits from a liberal migration program accrue to the migrants not to resident Australians.  Economies of scale arguments are irrelevant in an economy that trades with the world. At the same time we must put up with more crowded cities and less people-free, biodiversity-rich landscapes.

I’d prefer a migration policy that stabilises the Australian population at something less than 30 million.   I am selfish enough to prefer living in open, low density landscapes where nature is not extinguished.

8 comments to Unemployment & immigration

  • Uncle Milton

    Of the 380000 immigrants who have got jobs, a few would have been academics recruited from overseas to work at La Trobe University, yes?

  • hc

    No none. But most of the Department comprises migrants. Most VCs and Deputy VCs are English immigrants. It is fair enough many have good skills. The obvious question though: Why not native-born Australians? Is Australia not imparting the right sort of training?

  • Is the high level of immigration not simply a means of keeping downward pressure on wages?

  • Alson

    Like US we may need a war of independence or a civil war to end British domination.

    In US through hard work and some luck, citizens and immigrants from any background can achieve what they want. However, in Australia most of the top positions including those in politics and universities are occupied by British thugs.

    So, as Australia becomes more diverse, I see at least two ways in which fair representation could be achieved:

    1. The residents start appreciating the contributions of people of from all the different backgrounds by giving them what they deserve.
    2. Otherwise, fairness could be achieved through a civil war.

  • Henry Haszler

    Yeah well. we live on 3/4 acre and even then the neighbours are sometimes too close.

    To my mind a lot of the immigration analysis focuses on GDP so that more GDP through immigration is “good”. The more GDP is almost certainly good for the immigrants because otherwise so many people would not be that keen to come to Australia. And of course the building industry just loves immigration. But all that overlooks the impacts on the rest of us of us already here who experience the negatives such as increased crowding, etc. Reminds me a bit of the planning system which seems often to be biased towards so-called “development”.

    Maybe with unemployment rising now is a good time to do something about the immigration rorts recently revealed in the Fairfax press, eg with 457 visas and the student scams.

    I’m old enough to remember the Colombo Plan under which we brought foreign students to study in Australia on the condition that they had to return home at the end of their courses – and as I recall they could not even apply for residence status until after they had returned home.Of course the Plan was about economic development and not just about the business of education that now governs universities.

    Just for the record, I’m not necessarily against 457 visas and the export of education services. I just want people to follow the rules we set. Unfortunately the immigration department seems to be totally stuffed so I’m not hopeful of much change.

  • Crocodile

    Is it immigration causing these problems or could it be the last decade and a half of declining productivity growth.

  • derrida derider

    “It is almost politically incorrect among the latte left to criticize anything relating to unrestrained high immigration …”

    Jeez, Harry, what universe do you live in? The Zero Population Growth people are all classic latte lefties. The one group among which it is actually verboten to criticise unrestrained high immigration is pro-business circles who claim, rightly or wrongly, it will “boost productivity and national income” (actually they want more abundant labour supply to drive down wages and make employees subservient).

    The left, like the right, is in fact deeply split on this, though the motivations for the split are different.

  • hc

    I don’t think the ZPG advocates can be identified with the latte left. The Labor and Coalition Governments have always maintained a consensus on immigration and now that consensus favours the Chamber of Commerce view.