Chris Dillow blogs:
“Wages, then, are being squeezed not by immigrants, but by some fundamental trends in capitalism.”
“Those who seek to link immigration with falling living standards are guilty not just of (perhaps wilful) ignorance. They are trying to shift the blame from capitalism to some of the least powerful members of society. That’s not just racist. It’s fascist.”
Here in Australia we have not seen a vicious squeeze on real incomes in recent years. This has led to support for migration which is high by OECD standards.
Yet there are still those who draw direct links between migrants and economic harm. It is argued, predominantly by the left, migrants displace and substitute Australians in the labour market. Just to be clear, I don’t think this is fascist but I do think it is misplaced.
As progressives, we are overlooking critical aspects of this debate. In one of the links above, Frédéric Docquier, Çağlar Özden, Giovanni Peri show the effect of immigration in 1990 to 2000 in OECD countries on “less educated native workers”:
In Australia between 1990-2000, the effect of migrants grew wages for less skilled Australian workers by between 3.7 and 5.1 per cent. This averages out to a minimum of 0.37 per cent per annum.
The data isn’t available for 2000-10 but given the number of migrants grew – in addition to a renewed focus on skills and human capital – we should expect an even better result for the decade just past.
These effects are not insignificant. They help mitigate the worst aspects of inequality and contribute to rising real wages for those towards the bottom of income scale. There are only a handful of other factors which can contribute such large gains to wages, in particular for lower-skilled workers. Stimulating the labour supply of skilled workers should be a priority for a labour movement with a focus on helping those at the bottom. Making sure visa programs achieve this effectively is an important consequence of such a stance.
I’m a progressive. I think inequality is corrosive to social wellbeing. I think the treatment of workers by employers looking to make short-term profit is abhorrent.
But as a progressive movement in Australia, we must recognise, not only that migrants are not to blame for wage pressures, but they are actively helping those who need it most. To our great shame, this is not an argument you will see articulated in Australia.