Economists on immigration

What would help boost wages in Australia? An Australian panel of economists evaluated some options.

Boosting productivity growth and business investment are supported. The rest of the options are not. And less than 10% of surveyed economists support cutting immigration as a way to increase wages. 

Michael Keane of The University of NSW said the idea that population growth and increased labour supply were constraining wage growth was “so naive as to not really be worthy of comment”.

Consultant Rana Roy said only a “cultivated amnesia” could ignore the near-uninterrupted growth in real wages in US, industrialised Europe and Australia amid record inbound immigration in the decades after the second world war.

Gabriela D'Souza of the Committee for Economic Development of Australia said the idea owed much to a “one dimensional view of the world” that saw only the direct impact of immigrants on particular wages and not the impact of their demand for goods and services on a broader range of wages.

Dozens of studies had identified the overall impact as “near zero”.

Productivity ‘almost everything’

Robert Breunig of the Australian National University said immigrants appeared to add to productivity rather than detract from it, meaning slowing down immigration could slow down rather than add to productivity and growth.

I wonder what a similar panel of Kiwi economists would say. 

It feels like there's just this massive gulf between what academic economists conclude and what Wellington policy people have convinced themselves is true. One person described the Wellington dynamic to me as the taking of a status-weighted average of the views in the room. It's easy for that kind of process to veer off into weird places.