Category Archives: Immigration & Migration

The Migrant Boon – Ian Goldin and Jonathan Woetzel. 

New research from the McKinsey Global Institute (MGI) shows that cross-border migrants – more than 90% of whom have moved for economic reasons – comprise just 3.4% of the world’s population, but contribute nearly 10% of global GDP.

Many of the immigration debates now raging around the world reflect the faulty assumption that admitting immigrants is an act of largesse – and a costly one, at that. But, far from being an economic burden, immigrants represent a major economic opportunity for destination countries. Those countries that take a thoughtful, long-term approach to immigration can capture large and tangible benefits.

Contrary to popular belief, immigrants typically do not take jobs that would otherwise be filled by native-born workers. Many gain a foothold in a new community by taking jobs that are available precisely because locals do not want them. A large body of research shows that immigrants have a negligible negative impact on the wages and employment of native-born workers, not to mention on the fiscal resources of destination countries.

The problem is that, in many countries, the immigration debate begins and ends with the question of how many people to admit and what their profile should be. It rarely extends to creating real pathways for those immigrants to assimilate fully and maximize their economic contributions.

Focusing more attention and resources on integration can help new arrivals reach their full productive potential – an outcome that is in every destination country’s best interests. Such efforts can transform immigrants’ lives and those of the second- and third-generation immigrants who will shape the labor force of the future.

Of course, immigration does imply short-term challenges and costs for destination countries, particularly when it takes the form of a large and sudden influx of refugees. But these costs are far outweighed by immigration’s medium- and long-term benefits – as long as governments work actively to support integration.

In today’s interconnected world, migration is inevitable. The question is whether we will create isolated, disaffected, and dependent populations of immigrants, or a powerful engine of growth and dynamism.

Project Syndicate


Global Migration’s Impact and Opportunity

Let’s explode some myths about immigration – Ananish Chaudhuri. 

Those who suggest immigrants are a net drain on the economy are trying to sell “alternative facts”. 

There is no denying the rise of Donald Trump and his nativist “America First” stance have become a vehicle for expressing such sentiments.

American researchers have shown that there was a sharp increase in anti-Muslim hate crimes in the days following a speech by Donald Trump, then a candidate, calling for a “total and complete shutdown of Muslims entering the United States.”

There is an ill-wind blowing and it is unlikely that New Zealand will remain immune.

Here are some real facts and figures to counter the often-touted arguments against immigration; about how immigrants are a drain on the economy; how they take jobs away from hard-working blue collar workers; how they fail to assimilate and do irreparable damage to our “culture”.

Are immigrants a drain on the economy?

An easy way of checking this is to calculate the “fiscal impact” of migrants on average. Essentially this means how much does an average immigrant pay in taxes and how much does he or she receive in return in the form of public education, access to healthcare, superannuation, welfare benefits and so on?

According to a 2013 report compiled by Business and Economic Research Ltd (BERL) for the Department of Labour, in that year the net contribution of immigrants to the New Zealand economy was positive and totalled $2,912 million. That is, immigrants contributed that much more than the value of the services they received.

This effect is equivalent to $2653 per migrant. In comparison, the New Zealand-born population in 2013 had a total net fiscal impact of $540m; the equivalent of $172 per NZ-born person.

The fiscal impact is positive for all sub-groups; it is highest for those coming from Europe and North America, followed in turn by Asians, UK and Ireland, Australians and Pacific Islanders. But the fiscal impact of each of those sub-groups exceeds that of the native-born.

Do immigrants displace native workers?

Yes, to an extent. But it is important to remember the total number of jobs is not fixed. The arrival of immigrants increases the national pie and in turn creates new jobs.

However, economists are beginning to realise that there is a powerful new force driving blue-collar wages downwards, independent of inward migration.

Eduardo Porter, writing in the New York Times, points out there is a radical reorganisation of the workplace under way from the outsourcing of many tasks, including running the cafeteria, building maintenance and security, to low-margin, low-wage subcontractors.

This is playing a big role in keeping wages down and increasing income inequality, much more so than globalisation can account for.

Many employers now are looking to outsource non-core tasks, thereby avoiding difficulties like unions as well as workplace entitlements and regulations of employing workers directly.

Porter writes: “These days the receptionist at the front desk is unlikely to work for the hotel. The truck driver may not work for the delivery company, nor the nurse for the hospital.”

Much of the evidence that we have here comes from the US. A recent study by two leading economists, Lawrence Katz of Harvard and Alan Krueger of Princeton, concluded that independent contractors and various types of temporary workers together accounted for 94 per cent of employment growth in the past 10 years.

Many of these jobs are poorly paid. A recent study found outsourcing imposed a wage penalty of up to 7 per cent for janitors and up to 24 per cent for security guards.

This kind of outsourcing increases the slice of national income going to corporations and shareholders at the expense of the workers independent of any effect of immigration.

Do immigrants fail to assimilate?

It is my view that arguments about assimilation are usually a cover for an aversion to ethnic diversity. Consequently, it is difficult to provide a cogent counter-argument.

If immigrants confined themselves to their own little communities, as is sometimes the case, particularly in larger economies, this could potentially be an issue. But, typically, this would be true for at most one generation.

Immigrants are typically young with children and those children go to local schools, so by the second generation assimilation is well under way.

There is no doubt that while immigration increases the size of the national pie, it does create winners and losers. For workers suffering from stagnating wages, the sense of displacement and disillusionment is real.

But, the bottom-line is clear: The net gain to society from immigration outweighs the losses and, therefore, there must be ways of providing a safety net for displaced workers in a way that makes all of us better off.

In the meantime and leaving cultural arguments aside, those who suggest immigrants are a net drain on society in economic terms are purveying “alternative facts” that should not be part of informed discussion.

NZ Herald

Migration: Beyond the fear factor: New Kiwis can be good for us all – Lincoln Tan. 

The perception that migrants take jobs from New Zealanders and push up house prices is widespread, but the fear is overblown, a new report has found. However, an immigration expert is warning that concerns, if not addressed, could lead to a rise in community tensions.

New Zealand last year had the highest net gain of migrants ever recorded of 69,100 – up 19 per cent from the previous year.

The New Zealand Initiative study “The New New Zealanders, Why Migrants Make Good Kiwis”  analysed available data on migration, and concluded that the country benefits from migration, or at the very least was not worse off.

Researchers Jason Krupp and Rachel Hodder found that migrants “certainly had an effect” on the housing market, but it was one that is complex.

“That is because visitors on temporary visa, such as students, do not tend to buy accommodation but rent it. In this they compete with Kiwis in the rental market, but the effects are modest.” Rents in Auckland rose 0.2 per cent in September 2016 compared to the same month a year earlier.

“The high migration numbers have undoubtedly put additional pressures on infrastructure, especially in Auckland. We have got to look at how migrants can be more evenly distributed given that the numbers of those settling in Auckland are four times higher than the next destination, Canterbury.” says Massey University sociologist and immigration expert Paul Spoonley,

The report said there was little evidence to support the perception that migrants stole jobs from New Zealanders born in the country.

“That is because the number of jobs in an economy is not fixed. Migrants also contribute to job growth by increasing demand for local goods and services.”

Research into the effects of temporary migration in the decade to 2011 found a positive effect on earnings and employment of Kiwis.

“This may be because migrants fill jobs that native-born New Zealanders are reluctant to do, and because migrants provide a boost to the sectors in which they work.”

In 2013, migrants contributed $2.9 billion to the economy in 2013, which equated to $2653 net per migrant. Native-born New Zealanders on the other hand contributed just $540 million, or $172 per person.

“On balance, the available evidence suggests that New Zealand benefits from migration, or at the very least the country is not made worse off.”

Four in five international students did not remain in the country after completing their studies, with just 19 per cent of students transitioning to residence five years after their first student visa.

NZ Herald