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Yves here. Some unexpected groups are raising concerns about immigration policies that, whether by accident or design, produce a pool of surplus labor that suppresses wages.
By Leith van Onselen, an economist who has previously worked at the Australian Treasury, Victorian Treasury, and Goldman Sachs. Originally published at MacroBusiness
The Salvation Army has entered the debate over New Zealand’s high immigration program, releasing a reportthat is critical of the Government’s immigration settings and calling for a “broad public debate” around immigration:
Over the past three years, we have seen record net migration that is not just the result of fewer New Zealanders leaving for Australia but also a deliberate policy of allowing more people to migrate here…
Over the past three years, the Government approved an average of 114,000 migrant visas against an average of 84,000 such visas over the previous decade. An increase of this scale is not due to policy miscalculation, so must be seen as a deliberate shift in policy priorities. The reason, and even any announcement that a shift in policy has occurred, has not been given—the change has simply happened.
Migration increases of this order are bound to have an impact on local labour markets, yet there appears to be little regard for such impacts in the way immigration policy is being administered. Only 13% of work visa approvals record an assessment of the need for that migrant’s skills…
Just one-third of these have a job arranged before they arrive and there is little evidence that Immigration New Zealand is checking if the labour market is short of the skills these migrants bring…
It is difficult to know what is driving current immigration policy settings, although it seems employers are lobbying Government for more liberal settings.
Migration is the soft option if we think about the future of ‘New Zealand Inc’. Simply continuing to import apparently skilled labour to fill current skill and labour shortages is an easy, short-term solution, but it avoids the broader society-wide issues of what to do about the skills deficit of hundreds of thousands of New Zealanders and of accommodating and catering for the needs of migrants. While individual employers are not to blame for the shortages of suitably skilled and focused workers, industry sectors cannot be so easily excused given that it is often industry groups lobbying for changes to immigration policy….
Our current short-term fix of simply using migrant labour to fill low-paid relatively unskilled jobs begs the question: What next for the tens of thousands of young unemployed people on the margins not only of the labour market but also mainstream society?.
…persistent unemployment among younger workers and the difficulty many have in finding a secure place in the labour market suggests their needs are not being given sufficient importance when decisions are made around immigration policy settings…
In particular, the balance between training and recruiting young New Zealanders and simply importing skilled and unskilled labour needs to change in favour of young New Zealanders…
27,000 of the 71,000 work visas approved during 2015/16 and for which occupational classifications were reported are in occupational categories that might be filled by local workers with entry-level skills. While the skills of workers in any occupational category (as in any specific occupation) can vary considerably, it is clearly the case that some occupations and categories of occupations have skill requirements that might be met through short, focused pre-employment courses and/or with on-the-job training…
There are a number of more skilled occupations for which it would seem relatively easy to train New Zealand residents, instead of resorting to immigration to fill apparent skill gaps…
Immigration will be an important part of New Zealand’s social and economic future, but let us have broad public debate about this, rather than allowing policy to be driven by the short-term interests of some employers…
Industries and sectors calling loudest for more liberal immigration policies should be required to have workforce plans that include tangible and credible efforts to recruit and train young New Zealanders as part of their response to future labour and skills needs.
Well said. I look forward to the Salvation Army releasing a similar report on Australia’s immigration settings, which have delivered the highest population growth in the English-speaking world (see below) and contributed to similar barriers facing Australia’s youth.
Immigration has been the ideal weapon for neoliberals to force a wedge between real progressives and much of the population. Whether in their right wing or their centrist roles they can talk tough or dog whistle racism when necessary politically, but in the meanwhile they gradually open the sluice gates to keep their paymasters in business happy. In the meanwhile, it is the Left who has to take the visible hit for standing up to protect the rights of immigrants and migrants and refugees and so, in the popular eye, become synonymous with encouraging this immigration. So when the economy hits the rocks and jobs are scarce, it is the left who get the hit from voters fed up with seeing their economic futures undermined by excessive immigration.
It is of course a dangerous game for the neo-libs, as they’ve found themselves occasionally outthought by the far right or Trumps of this world. But then they can always call on the left to bail them out on the ‘lesser evil’ argument (just witness how left wingers were forced to vote for the noxious Sarkozy in France to prevent Le Pen getting in).
The only way this will stop is when Unions and others in the Left find a way of opposing large scale immigration without compromising its moral obligation to fight racism and discrimination. Its not an easy thing, but far too often the left has taken the easy route of virtue-signalling anti-racism and internationalism, without thought for the real world consequences for working people.
fred
“outthought by” That hasn’t stopped immigration.
“Unions and others in the Left find a way of opposing large scale immigration without compromising its moral obligation to fight racism and discrimination.”
Who is being racist and discriminatory and to whom? Immigrants are not racism and discrimination free. Just look at the societies they come from and the actual communities they wind up in.
scraping_by
Try ‘the smear of racism’ and ‘the accusation of discrimination’. The racism/anti-racisim debate is a great diversion from practical issues.
RobC
The Salvation Army being Christian-like in wanting to ensure unskilled migrants aren’t allowed in, aren’t allowed to build skills, before local labour gets first dibs. Also, looking at skills as a sole entry criteria as opposed to, oh say, humanitarian grounds.
fred
RobC,
The immigrants are not capable of building skills where they live right now? You should take a look at the population growth chart and ask just how many of these “humanitarian” immigrants a society must take and why their own societies are functioning so badly that people want to leave them.
scraping_by
Sally Anne being Christian in keeping the locals from being caught in a race to the bottom. Their witness is the welfare of society’s losers, but that doesn’t mean no concern for the rest of us.
Charger01
NZ and kiwis are eternally fascinating to me. I “worked” on a dairy in the north island for a couple of days. It’s pretty tough work. A significant portion of NZ’S economy is based on agriculture, especially the dairy industry. Quite a few dairies are employing immigrants specifically for the wage/expectation arbitrage rather than constantly hiring and retraining local workers that seek a dollar or two more from any competition. Those immigrants typically will stick around average years, earn enough savings for marriage, and then take off for home. That’s the dynamic I’ve been told.
St Jacques
It’s now an old story: “Look here, a skill shortage, da economy in danger, let’s import the skilled workers! Aren’t we geniuses?” Result: businesses lose the incentive to upgrade the skills of current workers or train inexperienced locals, social mobility stalls, employees’ wage bargaining power collapses, wages stop rising despite official unemployment being low, the lower skilled and unskilled labour markets become flooded and become open increasingly to third world style abuse from employers.
LOL, any surprise at the Rise and Rise of the Trumps ?
rfdawn
And, at the other end of the immigration “market”, an uncritical preference for wealthy migrants averts the popping of the Auckland real-estate bubble and the likely political carnage that would ensue. It’s a two-fer!
St Jacques
The Ancien Régime will have a remarkably rapid demise. Another expression for neoliberalism is greed and arrogance unbounded. And it will soon have its teeth inspected by Doc Martin. As the saying goes “what goes round comes round”.
rfdawn
Sorry, I was wrong. The wealth-preference is not entirely uncritical. It is somewhat ageist.
ChrisPacific
I don’t agree with all of this, but the central point is a good one: in the absence of a coherent immigration policy and strategy, NZ will end up with one designed and defined by business (given the current government’s default position of compliance). That is likely to end up looking much like it does in the US, i.e., a concerted effort to drive down wages and shift the balance of power towards employers and away from labour. The media (and Labour opposition) need to be hitting this point a lot harder and not just going along with the default neoliberal “what’s good for business is good for the country” position advocated by the current government. We aren’t the US, but we could end up like them if we go down the same path.
Immigration has been the ideal weapon for neoliberals to force a wedge between real progressives and much of the population. Whether in their right wing or their centrist roles they can talk tough or dog whistle racism when necessary politically, but in the meanwhile they gradually open the sluice gates to keep their paymasters in business happy. In the meanwhile, it is the Left who has to take the visible hit for standing up to protect the rights of immigrants and migrants and refugees and so, in the popular eye, become synonymous with encouraging this immigration. So when the economy hits the rocks and jobs are scarce, it is the left who get the hit from voters fed up with seeing their economic futures undermined by excessive immigration.
It is of course a dangerous game for the neo-libs, as they’ve found themselves occasionally outthought by the far right or Trumps of this world. But then they can always call on the left to bail them out on the ‘lesser evil’ argument (just witness how left wingers were forced to vote for the noxious Sarkozy in France to prevent Le Pen getting in).
The only way this will stop is when Unions and others in the Left find a way of opposing large scale immigration without compromising its moral obligation to fight racism and discrimination. Its not an easy thing, but far too often the left has taken the easy route of virtue-signalling anti-racism and internationalism, without thought for the real world consequences for working people.
“outthought by” That hasn’t stopped immigration.
“Unions and others in the Left find a way of opposing large scale immigration without compromising its moral obligation to fight racism and discrimination.”
Who is being racist and discriminatory and to whom? Immigrants are not racism and discrimination free. Just look at the societies they come from and the actual communities they wind up in.
Try ‘the smear of racism’ and ‘the accusation of discrimination’. The racism/anti-racisim debate is a great diversion from practical issues.
The Salvation Army being Christian-like in wanting to ensure unskilled migrants aren’t allowed in, aren’t allowed to build skills, before local labour gets first dibs. Also, looking at skills as a sole entry criteria as opposed to, oh say, humanitarian grounds.
RobC,
The immigrants are not capable of building skills where they live right now? You should take a look at the population growth chart and ask just how many of these “humanitarian” immigrants a society must take and why their own societies are functioning so badly that people want to leave them.
Sally Anne being Christian in keeping the locals from being caught in a race to the bottom. Their witness is the welfare of society’s losers, but that doesn’t mean no concern for the rest of us.
NZ and kiwis are eternally fascinating to me. I “worked” on a dairy in the north island for a couple of days. It’s pretty tough work. A significant portion of NZ’S economy is based on agriculture, especially the dairy industry. Quite a few dairies are employing immigrants specifically for the wage/expectation arbitrage rather than constantly hiring and retraining local workers that seek a dollar or two more from any competition. Those immigrants typically will stick around average years, earn enough savings for marriage, and then take off for home. That’s the dynamic I’ve been told.
It’s now an old story: “Look here, a skill shortage, da economy in danger, let’s import the skilled workers! Aren’t we geniuses?” Result: businesses lose the incentive to upgrade the skills of current workers or train inexperienced locals, social mobility stalls, employees’ wage bargaining power collapses, wages stop rising despite official unemployment being low, the lower skilled and unskilled labour markets become flooded and become open increasingly to third world style abuse from employers.
LOL, any surprise at the Rise and Rise of the Trumps ?
And, at the other end of the immigration “market”, an uncritical preference for wealthy migrants averts the popping of the Auckland real-estate bubble and the likely political carnage that would ensue. It’s a two-fer!
The Ancien Régime will have a remarkably rapid demise. Another expression for neoliberalism is greed and arrogance unbounded. And it will soon have its teeth inspected by Doc Martin. As the saying goes “what goes round comes round”.
Sorry, I was wrong. The wealth-preference is not entirely uncritical. It is somewhat ageist.
I don’t agree with all of this, but the central point is a good one: in the absence of a coherent immigration policy and strategy, NZ will end up with one designed and defined by business (given the current government’s default position of compliance). That is likely to end up looking much like it does in the US, i.e., a concerted effort to drive down wages and shift the balance of power towards employers and away from labour. The media (and Labour opposition) need to be hitting this point a lot harder and not just going along with the default neoliberal “what’s good for business is good for the country” position advocated by the current government. We aren’t the US, but we could end up like them if we go down the same path.