Dr Rachel Hodder & Jason Krupp
This week The New Zealand Initiative launched its report on immigration, The New New Zealanders: why migrants make good Kiwis. In it we make the case that while concerns about immigration are valid, we need to assess whether the facts bear these fears out before we make policy decisions.
In short, it was an attempt to verify or debunk whether immigration is really the cause of all the problems it is reported to be. In short, while we note the immigration system could be improved, it is hardly the bogeyman it is made out to be.
So it was hardly surprising to see NZ First leader Winston Peters rail against the report on his official Facebook page. After all, Mr Peters has made a career of fanning anti-immigrant sentiment into a populist inferno.
Predictable it may have been, but it nevertheless deserves a fact-based response.
Mr Peters’ main critique is our claim that migrants don’t steal jobs from native born New Zealanders, and that 125,000 permanent and long-term arrivals in a year is beneficial.
To set the record straight, we never claimed the arrivals were beneficial, only that the number needs to be treated cautiously. First because migration flows tend to ping around a fair bit. It wasn’t that long ago that more people were leaving the country than were coming in, and the highs we are currently experiencing could be transitory.
Second, while the 125,000 figure is startling at first, when you break it down it looks substantially less formidable. For instance, of these 125,000 people, 29% were returning New Zealanders and Australian citizens who aren’t affected by immigration caps.
A further 22% arrived on student visas, 31% on work visas and 5% on visitor visas. Here is the rub though: these are temporary visas, and the vast majority of these people will return to their home countries over time. A portion will transition into permanent residency, just under a fifth all in all, but this is what the immigration system is set up to do – establish a low risk mechanism through which migrants can prove they are a fit for New Zealand.
The remaining 12% of arrivals, or just over 15,000 people, are here on residence visas. That number is far less frightening than the 125,000 figure. We’re going out on a limb here, but we suspect this is the reason why Mr Peters has not delved below the headline figure.
Then there is the claim that our analysis is wrong, and migrants do in fact steal jobs. The evidence? A dated report by the OECD and Mr Peters’ own experience at service stations, supermarket counters and in hospitality.
Mr Peters could be right if migrants were only workers. Unfortunately for his argument migrants are also consumers. They spend money on housing, clothes, food and a host of other goods and services – just like everyone else. That creates an opportunity for Kiwi businesses to satisfy this increased demand, for which they will need staff. Looked at this way, it could be said that migrants create jobs, not steal them.
This stacks up in the data. A recent report on online job ad activity shows the number of adverts rose 13% in December 2016 compared to the same month a year ago. Notably it was the unskilled and lower-skilled job ad categories which saw the highest growth, up 24.7% and 17.8% respectively. This is on the back of a thriving tourism and hospitality sector, as well as demand for care workers in the retirement sector. To our read of the numbers, this is more indicative of a skills shortage, not a glut caused by weak immigration controls.
Of course critics will point to the youth unemployment rate, which stands at 11.1%. This is higher than levels seen in the mid-2000s, but it is well down on the 17% level seen during the GFC, and is largely tracking in a stable band.
This is another area where the numbers need to be scrutinised, as in many cases migrants are not competing directly with native born New Zealanders. In the dairy industry, for example, the share of native born dairy farmers has been declining as older workers retire and younger seek employment in other sectors of the economy. This trend would have put the sector in decline had it not been for foreign workers filling the labour gaps. Hardly a case of migrants stealing jobs.
In other areas of the economy Mr Peters has previously railed against the high level of foreign students coming to study in New Zealand. He however makes no mention of the fact that this sector brings in $3.1 billion into the economy every year and that 30,000 jobs rely on it according to Treasury figures.
Where he does have a point is in noting that high levels of population growth do increase congestion, and migration has been putting infrastructure, housing and public services under pressure. We certainly see the effects when it comes to accommodation costs and an increased burden on the public health system.
But again there are caveats. First, it is entirely possible we would still have unaffordable housing without migration. We know this because when migration flows were net negative house prices were still climbing. That’s because migration isn’t the cause of our housing affordability shame, the red tape that prevents home construction is.
Furthermore, migrants on the whole more than pay their way when it comes to the fiscal side of the government’s ledger. Official figures show they contributed a net $2,653 per person to government revenues after subtracting what government spends on migrants. When it comes to the health system, the fix is to adjust District Health Board funding so that it adjusts to population changes in real time, not cut off migration flows.
We could go on rebutting many of Mr Peters’ statements with the wealth of research contained in our report. It is as comprehensive a look at the effects of migration in New Zealand as we could put together. There certainly are gaps in it that reflect areas where further academic research is need, and our high level focus skips over some of the detail. More work could always be done, and we hope to contribute to this evolving debate.
But we did not write the report for Mr Peters, who is unlikely to cede ground on a topic that has sustained his political career for so many decades. We also suspected that he might not bother to read it but just comment on it regardless. His Facebook rants seem to confirm that suspicion. He just does not engage with any of the facts we present but goes straight on the attack.
We wrote our report for the public, to put as many facts on immigration at their disposal as possible. After all, they will be heading to the polls later this year to choose a government. Informed voters tend to make wise decisions, but perhaps that explains the bluster on immigration that we have seen from the leader of New Zealand First.