Thursday, March 15, 2018

There's a case for immigration, and it's not about us

It’s great that we are talking about immigration. But could we talk about immigrants as well?

I’ve never met one who wasn’t delighted to have made it here.

To conduct the debate as the ABC did on both Four Corners and Q&A on Monday night, as if it was only about us, leaves out half the picture.

People come here to get a better life, and they generally do. Those who don’t, leave.

If we can lift the living standard of people who would like to come here, without much harming (or even while enriching) our own, why shouldn’t we?

Here’s a quick run-through of some of the things that have been said about the harm immigration is supposed to have done to our prosperous country.

Tony Abbott says it has held down wages. Indeed, “It is a basic law of economics that increasing the supply of labour depresses wages.”

It would have held down wages, had it not lifted the demand for labour at the same time, which is what happens when the population grows.

To see that this is true, imagine an Australia with only half its present population. Would wages be much different? Or imagine an Australia with the population it has now, but cut in two along a line separating Victoria, South Australia, Western Australia and Tasmania from NSW, Queensland and the Northern Territory. Each half would have roughly half Australia’s present population, but would its wages change much?

The Productivity Commission examined every piece of international evidence it could and found only “small (either positive or negative) effects”. Its own Australian modelling found only a “negligible” impact overall, but allowed for the possibility that immigration would make some workers worse off and some better off.

In the United States, leading immigration economist George Borjas has found persuasive evidence that it’s the least skilled who have been made the worst off and the most skilled the best off. But when Australian National University economists Robert Breunig, Nathan Deutscher and Hang Thi To set out to replicate his work in Australia they found no such thing. Which isn’t surprising. The US immigration program is skewed towards low-skilled arrivals, while the Australian program is skewed towards the high end.

They examined 40 different skill groups and found “no evidence” that immigration damaged the labour market outcomes of pre-existing Australians.

“If anything, there is some evidence for small positive associations,” they wrote.

It shouldn’t be surprising. Migrants bring with them, or make, money, which they use to buy houses, start businesses and educate their children. They employ people.

What if we don’t want all that activity? What if we want a more peaceful life with fewer traffic jams and shorter commutes?

It’s a future we would be denying would-be migrants, who often come from places far more crowded than Australia. That there are places worse than Australia suggests that Australia isn’t yet populated enough compared with the rest of the world. Anyone who gets out of our cities and looks at our coastline will have to agree.

The "problem" is that immigrants want to settle in cities, and who could blame them? (Although it must be acknowledged that many settled in Western Australia during the mining boom at a time when existing Australians would not). They make our existing cities bigger rather than help us create new ones.

Building a new city is hard. Australia has only successfully done it once, in Canberra. But the second-best options aren’t bad.

This month’s Grattan Institute report says it wouldn't be that hard to build all of the extra homes we will need within our existing cities, so long as we get used to the idea of living closer together. It would bring us benefits. Berlin, Rome and Toronto are each more densely populated than Sydney and Melbourne, and easier to get around. Dense populations can make proper public transport worthwhile.

Sydney is leading the way, creating dense corridors along major roads, while leaving the suburbs surrounded by those corridors untouched. Canberra is doing it by stealth. Each ACT suburb has within it randomly distributed "Mr Fluffy" houses, contaminated by loose asbestos. The ACT government has bought each one, demolished it and resold the site on the condition that it can be used for multiple dwellings, whatever the zoning. Every suburb, leafy or not, will get used to denser living. When the existing residents sell, they too will want the right to have their blocks divided.

We’ve a right not to choose this future - one where, with good planning, there’s a chance our cities will work. We’ve a right not to be confident enough in our governments to do it. But only up to a point. The rest of the world has granted us a licence to use this continent on the implicit understanding that we populate it.

Most of the people we are populating it with are like us. They are us. One in every four of us is a migrant. Almost one in every two lives in a migrant family. We already allow New Zealanders free access. The biggest gyrations in our population result not from the actions of others but from locals either changing how they return home or leave. There’s no longer an us and them.

In The Age and Sydney Morning Herald