Blam­ing a ris­ing pop­u­la­tion is easy. Find­ing so­lu­tions is hard but it can be done

The Guardian Australia - - News / World News - • Greg Jeri­cho is a Guardian Aus­tralia colum­nist Greg Jeri­cho

As Aus­tralia reached a pop­u­la­tion of 25 mil­lion this week there was much dis­cus­sion about whether or not we were grow­ing too quickly and whether or not we should scale back im­mi­gra­tion. While such a de­bate can of­ten see racism and xeno­pho­bia come to the fore, it is also far too of­ten used by politi­cians eager to look like they have found easy so­lu­tions. We should not let them get away with it and de­mand more, not just of our de­bate but of gov­ern­ment pol­icy.

For those like me who favour mi­gra­tion the ar­gu­ment is al­ways rather more dif­fi­cult than for those who would see mi­gra­tion as the cause – and its cut­ting as the so­lu­tion – of so many prob­lems.

Low wages growth, con­ges­tion, poor school­ing, crime – pretty much what­ever you want can fit un­der the “if only we cut back mi­gra­tion things would im­prove” ar­gu­ment.

All you need to do is point to prob­lems and then hark back to some myth­i­cal bet­ter time. You of course has­ten to add that you are very much in favour of mul­ti­cul­tur­al­ism, and think mi­gra­tion has been great for Aus­tralia; you’re just wor­ried that things are chang­ing too fast and that, well, look at the con­ges­tion on the roads, look at the state of our schools, look at our low wages ...

It seems log­i­cal, but it re­ally only looks at half of the equa­tion.

Tony Ab­bott cap­tures the essence of this ar­gu­ment quite well when he sug­gests “it’s an iron law of eco­nomics that more supply cuts price, hence the im­pact of high im­mi­gra­tion on wages; sim­i­larly more de­mand boosts price, hence the im­pact of high im­mi­gra­tion on hous­ing af­ford­abil­ity”.

It is a per­fect ex­am­ple of only see­ing what you want to see or, as econ­o­mist Tom West­land stated rather drolly, how “for anti-im­mi­gra­tion types, mi­grants ex­ist only on the de­mand side of the hous­ing mar­ket and only on the supply side of the labour mar­ket”.

Yes, mi­grants af­fect the supply of labour, but they also in­crease the de­mand for goods and ser­vices, which cre­ates a de­mand for more work­ers to pro­duce those goods and de­liver those ser­vices. Yes, they in­crease the de­mand for hous­ing, but the mar­ket re­acts to this by in­creas­ing the supply of hous­ing. That can be a slow process, es­pe­cially in times of a large in­crease in the de­mand for hous­ing, but oddly we don’t ac­tu­ally have a fixed stock of hous­ing or labour – both re­spond to de­mand and supply.

A speech by the gov­er­nor of the Re­serve Bank, Philip Lowe, this week noted that this re­sponse is now oc­cur­ring as the “growth in the num­ber of dwellings” has been “ex­ceed­ing growth in the pop­u­la­tion over the past four years”.

The re­al­ity is our hous­ing af­ford­abil­ity is­sue is not just about supply and de­mand but that gov­ern­ment poli­cies at a fed­eral, state and lo­cal level are, as Ross Git­tins noted, mas­sively skewed in favour of home own­ers at the ex­pense of would-be home buy­ers.

Lowe’s speech was a very timely push back to some of the pretty lazy claims against mi­gra­tion, and pointed to the ac­tual eco­nomic ben­e­fits it brings.

The sug­ges­tion that mi­grants are over-sup­ply­ing our labour mar­ket is an in­ter­est­ing one. Yes, Aus­tralia has had low wages growth, but so too has a host of coun­tries which have not seen any­where near our level of mi­gra­tion growth.

And were the in­flux of mi­grants lead­ing to res­i­dents miss­ing out on jobs, you would ex­pect the per­cent­age of adults in work would fall. Af­ter all, if Ab­bott’s supply of labour fal­lacy were to hold, you would ex­pect the pop­u­la­tion to in­crease faster than the em­ploy­ment.

How­ever, the per­cent­age of 25- to 64-year-olds in em­ploy­ment is higher now than at any time in our past. This is mostly be­cause of more women work­ing now than in the past, but even the 83% of men aged 25 to 64 who are em­ployed is not much below the post-1990s re­ces­sion high of 84% that oc­curred just prior to the GFC.

The level of men work­ing full-time is lower (about 73% com­pared with an av­er­age since 1990 of 74%), but that is due to the chang­ing na­ture of work in our econ­omy, and any­one telling you slow­ing mi­gra­tion will halt the shift to­wards the ser­vices sec­tor and part-time work is sell­ing you snake oil.

Lowe noted as well that mi­grants are more ed­u­cated and younger on av­er­age than res­i­dents – mean­ing that they not only boost our na­tional cap­i­tal and pro­duc­tive ca­pac­ity, they also have greatly helped the prob­lem of our age­ing pop­u­la­tion.

While much has been made in the past week that we reached 25 mil­lion much faster than ex­pected, be­cause of im­mi­gra­tion we are also a much younger na­tion than ex­pected.

In 2002 the me­dian age of Aus­tralians was by now ex­pected to be 40. In­stead it is 37. Back then it was pro­jected to hit 45 by 2040; now it looks likely to be just above 40. This means the ra­tio of peo­ple in re­tire­ment to the work­ing-age pop­u­la­tion is ris­ing much slower than other na­tions in the OECD, an im­por­tant fac­tor when it comes to the gov­ern­ment be­ing able to fund health and so­cial ser­vices for those in re­tire­ment.

But this does not of course make the in­crease in mi­gra­tion an easy step. It’s true that our in­fra­struc­ture has not kept pace. But the ar­gu­ment that we should ease back mi­gra­tion while we wait for in­fra­struc­ture to catch up sug­gests, much like a myth­i­cal past where ap­par­ently we were all happy with the level of mi­gra­tion and mul­ti­cul­tur­al­ism, that in the fu­ture we will see a time when peo­ple will think we have enough in­fra­struc­ture to cope and will thus be open to more mi­grants.

The pres­sure should not be for gov­ern­ments to cheat the way to im­prov­ing the sit­u­a­tion by cut­ting mi­gra­tion, it should be on them to ac­tu­ally de­liver the ser­vices that are needed.

The calls for cuts to mi­gra­tion gives gov­ern­ments an easy pass. We should pres­sure gov­ern­ments to de­liver the needed ser­vices, to look for ways to fund them and not have then cut taxes and then claim later that there is no money and blame mi­grants.

The calls for lower mi­gra­tion (or worse the eu­phemism of a “sus­tain­able” Aus­tralia) of­ten leads to some pretty dark places, but just as bad it lets gov­ern­ments off the hook. Yes the so­lu­tions to a grow­ing pop­u­la­tion might be hard, but find­ing them is what they are paid to do. If they can’t, then we should elect some­one who can, not some­one who wants us to re-elect them be­cause they are seek­ing cover by blam­ing oth­ers.

Pho­to­graph: Erik An­der­son/ AAP

Aus­tralia wel­comed its 25 mil­lionth res­i­dent late on Tues­day night, restart­ing the dis­cus­sion about mi­gra­tion.

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