Cutting Off Immigration to Spite Our Face

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Brisbane’s Courier-Mail this week wrote of "mounting pressure" on the Federal Government to slash the nation’s historically high immigration intake, so that we may cope better with an expected rise in unemployment due to economic downturn.

The call came from the Shadow Immigration Minister Sharman Stone in comments made directly to the paper, and it was difficult to determine just how much pressure is "mounting" as the paper offered no evidence of any other examples of such calls, despite the article’s title, "Opposition leads calls to slash immigration in 2009".

In the absence of any reference to other such calls, it’s possible the Opposition is "leading" from a very long way in front on this issue, and that there is no concerted pressure to make any changes to our immigration arrangements. At least not yet.

Calls to make blanket cuts to immigration always increase when the economy declines, and unfortunately public hostility towards migrants and refugees tends to increase along with it.

The myth that "migrants take jobs" is still very strong, but this is precisely the time when such myths should be countered, for both economic and social justice reasons.

The majority of migrants create economic activity and jobs. At a time when our Government is going to extreme lengths to urge people to spend money to stimulate the economy, it would be extremely short-sighted to try to actively curtail a significant source of economic stimulus that, unlike the Government’s recent $10 billion overnight splurge, does not require a handout from the taxpayer.

One of the many reasons calling for a deliberate, across-the-board reduction in immigration is that it misunderstands the actual situation.

To put these workers in context, take a look at a sector of our workforce which doesn’t attract the same kind of criticism. A big filler of labour shortages in casual and seasonal employment are backpackers and international students. The hundreds of thousands of them now entering Australia each year is a record high.

You don’t need to be a rocket scientist to see that a big fall in numbers in these groups will have a negative impact on the major export industries of education and tourism, leading to further unemployment.

These numbers will almost certainly decline significantly in any case due to major economic downturns in our region or in Europe, but I doubt very much that when it happens you’ll hear our universities or our tourism industry saying that it is a good thing for our economy or for employment.

Another reason why cutting immigration doesn’t make sense is that economic downturn tends to make its own adjustments to immigration levels. I don’t have any problem with there being some reduction in the number of migrants in times of economic downturn, since it happens anyway.

It’s already happening in the UK and it will undoubtedly happen here. As a researcher at the UK think tank the Institute for Public Policy Research says, "migrants move to be able to work and if jobs are not available, or not better than at home, they simply will not come or stay". There are some differences in migration patterns and laws in Australia compared to Europe, but such differences as there are work in our favour.

The majority of economic migration is driven by demand. This demand will fall if unemployment rises, and migration will fall with it. This is particularly the case with temporary skilled workers such as those on the subclass 457 visa — employers usually turn to importing skilled labour only if they cannot find locally based workers to fill vacancies.

In the vast majority of cases, it is more expensive for employers to import a new migrant worker than to use people already in Australia (many of whom are migrants themselves). They only do so if they cannot find workers here. So if unemployment increases, the skill and labour supply available locally grows, automatically reducing the numbers of migrants needed.

Contrary to common understanding, much of Australia’s migration intake is not capped in a formal sense, where the government hands out a set number of visas each year and knocks the rest back or tells them to wait until next year. However, the anticipated flow of migrants in various visa categories is continually tweaked by modifying a multitude of criteria. It would be wise for the Federal Government to examine these criteria in the light of the changed economic circumstances, but it would be foolish in the extreme to give in to calls to simply cut back across the board, as it would risk causing long-term social and economic harm.

As part of the game of politics, a government may see advantage in saying it is cutting back the migrant intake, even though such a reduction would naturally occur in any case. But while not directly harmful, since they aren’t actually doing anything themselves, the danger of such an approach is that it reinforces negative and incorrect assumptions about the relationship between economics and immigration.

Just as we would not try to fix the economic crisis by cutting off flows of investment or finance or trade, we should not try to artificially constrain the flow of skills, services and labour through unnecessary restrictions on the flow of migration, both into and out of Australia.

Crude calls to "slash the immigration intake" across the board run the risk of making economic and unemployment problems worse, not better.

New Matilda

New Matilda is independent journalism at its finest. The site has been publishing intelligent coverage of Australian and international politics, media and culture since 2004.

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