Lowskilled migration: to be encouraged or discouraged

1
Low-skilled migration to be encouraged or
discouraged?

• Introduction to migration in Australia by Paul
  Frijters (15 mins)
• We should have more low-skilled migration by
  Student 1 (15 mins)
• We should strongly discourage low-skilled
  migration by Martin Banjo (15 mins)
• Group Discussion

2
Overview of migration policy in Oz
Bottom line in absolute numbers, Australia is
now letting in more than in most years the past
50 years. In relative numbers, were now average
for the past, but high internationally.
3
Why do they come?
4
Where do they come from?
5
What are we losing?
Note were losing about half of what we let in,
and what comes in is on average at least as
skilled as what goes out, i.e. net in-migration
is about 130,000 a year
6
Stylised facts

• In Net terms, Australia is importing skilled
  migrants and is actively shunning low-skilled
  migrants. This is current government policy to
  which Queensland is also committed.
• Ways we could increase low-skilled migration
• Take in more refugees
• Let refugees stay in the cities rather than on
  islands
• Do away with the point system explicitly
  selecting on skill
• Ease family reunion possibilities.
• The new wage slaves a visa for low-skilled,
  short-stay migration

7
The stylised political economy of low-skilled
immigrants

• In the short-run, they are good for the business
  that brings them in, i.e. they are complimentary
  to the skills of existing high-capital,
  high-skilled people and as such big business is
  quite keen on them.
• In the longer run, the key economic question is
  whether these migrants manage to hold down a job
  or become dependent on the state, and on whether
  their children integrate or not.
• The long-run experience is mixed. The low-skilled
  wave into Australia in the 50s (Dutch, Greeks,
  Italians) have worked out well. The wave of
  low-skilled guest workers from the Maghreb in
  Western Europe in the 60s and 70s is perceived to
  have been disastrous and a definite net cost to
  the rest, leading those countries to start to
  adopt the Australian point system.
• Current trends in the US and the EU are to
  restrict low-skilled migration but encourage
  skilled migration by using points.

8
Current debates

• Quite a bit of big business is clamouring to have
  more low-skilled migration mining companies and
  especially construction companies want to bring
  in low-skilled people for a year and ship them
  out again (like what the Saudi Arabians and the
  Kuwaities do with Asians and others).
• Should Australia / Queensland do this or not?

9
Yes, by student 1

• We need more migrants, also low-skilled, to keep
  our economy moving these people will be fine and
  well easily integrate them many of them will
  leave anyway but will have acquired a taste for
  Australian products their contacts mean more
  business for us.

10

• 1) Labour is key to production
• Y AF(K,N)
• i)There must be a sufficient supply of labour of
  which low skilled are a large component
• ii) World Labour productivity must be maximised,
  i.e. markets should be efficient and competitive
• http//www.abs.gov.au.ezp01.library.qut.edu.au/web
  sitedbs/d3310114.nsf/home/population pyramid
  preview
• Graph on the next slide sourced ABS Catalogue
  3222.0 Population Projections

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Australia Population Projections
12

• 2) Free Trade in all markets is beneficial to the
  world
• 3) Skilled legal immigrants reduce illegal
  immigrants (reduces producer demand
  for cheap labour)
• 4)I ntegration hardships are temporary costs of
  market establishment can be resolved by
  education and personal tolerance.
• 5) Maximise global utility by being good global
  citizens
• - improves their lot because this is a happy
  country
• 6) Cultural and intellectual enrichment
• - we can all learn from each other and become
  better

13
Low-skilled migration should not be
encouragedJoseph Jeisman
14
Welfare reliance

• The low-skilled migrants would most likely
  quickly find life is easier when supported by the
  state than with a low-paid low-skilled job.
• Low-skilled jobs like labouring are usually the
  domain of young people. Once the low-skilled
  immigrants get a bit older they will be more
  likely to find it difficult to find work.
• Like parents, like kids? If parents are
  low-skilled are their children more likely to end
  up on welfare?

15
The Labour Force Experience of New Migrants (Aug
2001)

• http//www.immi.gov.au/research/publications/labou
  r_force/nilsreport.pdf
• Based on the Longitudinal Survey of Immigrants to
  Australia (LSIA)
• Cohort 1 (Sep 93 Aug 95)
• Interviewed 3 times 6 months, 18 months and 42
  moths after arrival.
• Cohort 2 (1999-2000)
• Only interviewed the first time before this
  report.

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Employment to Population Ratio
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Unemployment rates 6 months after arrival by age
groups
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Major source of income for recent migrants
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Sources of income
20
Current migration is sufficient to sustain the
population level

• With a net in-migration of about 0.5 a year, we
  more than balance our low fertility rate, which
  is about 1.7 children per female, and would by
  itself mean a long-run population decline of
  about 0.35 a year.
• Australia probably faces unsustainable pressure
  on various economic inputs, like town space,
  water, arable land, health services etc. it
  would quite likely not sustain many more people
  than it does at present.

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Rebuttals

• Australia does not have increasing returns to
  scale to the industries it is successful in, like
  tourism, education, banking, and mining. More
  people would thus not increase the GDP per person
  of those already living here.
• Now we can pick and choose who we want, why
  should Australia worry about what is optimal for
  the world as a whole.
• Increase low-skilled migration means less jobs
  for low-skilled Australians.

22
What can be done?

• Some industries that desperately need low-skilled
  workers are getting them through a loosening of
  the Working Holiday Maker scheme.