Immigration reset win for labour movement

It’s only sort-of official, and has been couched in vague language, but the Government clearly thinks that there was too much migration prior to Covid, and that even when the borders open up, it should be significantly slowed.

Ever since the virus struck last year and migrant arrivals slowed to a trickle, Labour has been keen to overhaul the immigration system. It believes that there is too much unskilled labour, and too much of New Zealand’s economic growth and population has relied on migrants – particularly those on temporary visas.

According to a speech delivered last night by Regional and Economic Development Minister Stuart Nash, some 30 per cent of New Zealand’s total population growth since the early 1990s has been generated by migration.

Labour thinks this is too high and the Government wants more of New Zealand’s economic growth to be generated by investment and home-grown growth. Need workers? Try to find them locally was the message.

Since it came to office in 2017, Labour has held one driving idea in economic development: there is too much low-skilled, low-paid labour, which has suppressed wages. That, in turn, has held back productivity because companies simply import people to do low-skill work instead of investing in plant and innovation.

This key idea has also been one of the intellectual pillars behind the Fair Pay Agreements announced by the Government over a week ago: lowly paid workers have incentivised business decisions that have reduced overall productivity growth.

It is a contested theory. The other justification is that Covid-19 has shown that the country needs to be less reliant on imported labour anyway.

Both FPAs and the newly

flagged immigration settings are wins for the union movement. Fewer migrant workers to compete for low-paid jobs should see wage increases at the lower end of the pool. Those jobs will now also now be covered, over time, by FPAs. So there will be fewer workers to fill the jobs, and the unions will have collective bargaining coverage over the sectors.

It is a structural and institutional win for the labour movement – as was the significant time spent during the speech on ending exploitation of migrant workers.

There is also going to be a short-term push for high-value migrants who plan on investing in New Zealand to come out here. RSE workers from the Pacific will continue to be an important pool of labour, partly because they are also an important source of remittances for the Pacific.

One of the challenges of running a high volume migration policy is that it is expensive. More infrastructure is needed: roads, trains, public transport, more houses, more everything.

To say that New Zealand has not been good at planning or building what is needed is a gross understatement. Ditto for housing.

As a result, when a lot of people who already live here see new migrants and high migration numbers, all they see is a longer commute to work, and more expensive houses.

But perhaps the most significant aspect of the speech, was not ‘refocusing immigration settings’ type language. Instead, the underlying language suggested that it is population growth itself which needs to be crimped.

There is no doubt that a lot of New Zealanders would be comfortable with lower levels of migration.

But New Zealand is still a frontier economy and a young country.

Prosperous countries grow. They attract – and need – high and low skilled workers alike.