Friday, 24 November 2023

Immigration Makes Us All Poorer



Saying immigration makes us all poorer sounds counterintuitive to many Australians for several reasons. For one many Australians are immigrants or the children of immigrants and we have one of the highest standards of living in the world. Australia’s resources and inbuilt wealth were unlocked both by British Colonialism and the ensuing British immigration to Australia in its early years and this combination turned Australia from a primitive tribal based land into one of the world’s leading per-capita economies. But even more so this is the case because Australians are constantly told that immigration will improve our nation and that we are racist to think other otherwise. This is consistent in the media and politics in Australia, any opposition to immigration is framed as racism and a simple “backward hick” resistance to change.

But this is wrong. Firstly comparing colonization to immigration is a mistake. There is a very big difference between settling in a primitive country and developing it, compared to immigrating to a fully developed society with an advanced culture. The kind of people that do the former are rarely the same as those that do the latter, and the kind of things they are looking for in the new society are very different.

Plus immigration is actually making us poorer and the data proves it. I will get to that in a moment, but this is not hard to conceptualize theoretically. Immigration suppresses wages by increasing competition for jobs and by importing people from poorer countries with lower expectations of what they could or should be earning. This is why the business sector and the centre right political parties strongly lobby for high immigration, they love suppressing the cost of labour, whether skilled or unskilled. Immigration then has the flow on effect of increasing asset prices, especially for homes, which locks Australians into a double negative effect, because our income potential is suppressed by the very thing which is driving up the cost of buying or renting a home. We have less and need to pay more for things that our parents had more and paid far less for. Then there is the effect immigration has on infrastructure which cannot keep up with Australia’s high rate of immigration, and therefore higher taxes are needed for more infrastructure that will be behind the eight-ball even before it is finished, because so many people are moving here. This has quality of life impacts, because people already have to live far away from the major centres of work because of the cost of housing, but now they have to deal with getting to work on roads that cannot handle the traffic using them. We are therefore becoming objectively poorer in multiple ways.

Then there is the decline in productivity caused by importing people from vastly different cultures. The resources which are required to teach new immigrants English, to retrain them according to the Australian standards for their industry, and then deal with all of the cultural issues in the workplace that stem from having a multicultural workforce create a massive productivity drain on companies and individuals. How can they not? Compare classroom school grades between schools with a high proportion of multicultural immigrants to relatively monoculture classrooms and you will see the same issues. Teachers must spend extra time working with kids whose languages and cultures are highly diverse, it’s just a reality. The only impact this can have on productivity is driving it down, because so many resources which were once poured into making things, completing projects and doing the work are now directed towards just getting the workforce into the right shape to do the work. From multiple angles it is very easy to deduce the negative impacts of immigration on the workforce and therefore on the economy. And we have not covered all of them in this thought experiment, only some of the most prominent.

Therefore, we should not be surprised that the data bears this out, as Macrobusiness explains,

“Australia’s economic performance in the decade before the pandemic was, on many measures, the worst in 60 years”, notes Minack.

“Per capita GDP growth was low, productivity growth tepid, real wages were stagnant, and housing increasingly unaffordable. There were many reasons for the mess, but the most important was a giant capital-to-labour switch: Australia relied on increasing labour supply, rather than increasing investment, to drive growth”.

“Australia’s population-led growth model was a demonstrable failure in the 15 years prior to the pandemic. Remarkably, the country now seems to be doubling down on the same strategy. The result, unsurprisingly, is likely to be more of the same”, warns Minack.

Minack’s assessment mirrors many of the same arguments that I have made about Australia’s mass immigration policy over the past decade (most recently this month).

This policy is a key reason why Australia recorded the world’s worst decline in real per capita household disposable income last financial year, according to an analysis of OECD data by The AFR’s Michael Read:…”[1]

I recommend reading the whole article and examining the charts they share as well. Australia is leading the developed world in losing its standard of living. The key to a successful economy is not how many workers you have, but how much your workers can make and how much what they make is worth and how this in turn creates a growing cycle of investment in new businesses and wealth. Basing an economic model on just increasing the work force is counterproductive, more workers does not mean more work will get done. The quality and focus of your workforce is far more important.

If you think of the economy like a pie with a moderate rate of growth (that is the pie is consistently getting larger by let’s say 1-3%) then what has been happening in Australia is that we have been growing the amount of slices in the pie at a far faster rate than the rate that the pie itself has been growing. And what is worse is that the growth of the pie is mostly dependent on increasing those slices anyway. So, you have a situation where the means of growth is actually making the average Australian poorer, because their share of the pie is decreasing, but the government is looking at all the extra slices and saying, “See! The pie is growing under our watch.” In other words, in real terms, as far as the average Australian is concerned we have been declining economically, but the overall size of the pie is larger, slightly, every year, so the politicians claim they are successfully growing the economy.

It is a Ponzi scheme. The person at the top of the pyramid keeps getting richer as long as new levels are being added to the bottom. Yes, I know I just changed metaphors but this one is just as apt. Because our economic system is based on the very same kind of Ponzi scheme as a pyramid scheme: just keep adding people and the people higher up will make the money. That's Australia's economic strategy. It's ridiculous. 

The way that the Australian government has managed the economy in the last several decades is by growing the economy through the very means that is making most Australians poorer and causing people to increasingly start to tread water. It’s like living on a junk food diet, you will grow, and be fed, but not in healthy or helpful ways and really you are setting yourself up for the risks of various different cancers rather than true and genuine health. This is all bound to collapse, when I cannot say, but eventually this is going to break. Probably when the bi-furcation of the world economy is complete, then Australia will become less attractive to immigrants who side with the BRICS[2] nations, but even then, it is possible our nation will eventually change sides to Asia[3]. We will have to wait and see.

Australians are getting poorer because of the very thing that the leaders of this country believe is necessary to keep the economy growing, because they obviously don’t have the will power or the knowledge to encourage economic growth in any other way. I also think there are more nefarious reasons because our governments always seem to jump onboard the various globalist agendas of the world elites. There is also the fact that immigrants by nature want to transform their new country to be like their old country, by bringing more of their kinsmen in and transforming the laws of the new nation to better reflect their values, culture and traditions. Many Australian residents are foreigners and there is therefore a natural inclination on their behalf to want to reshape their new home. As I often point out British settlers did not become indigenous Australians, they made Australia like Britain but with nice beaches and a tan.

Either way, no one can deny the negative impacts of immigration on our way of life and be honest about it. People who would have disagreed with me once before, are now seeing the daily effects of this when they seek to get a new rental or buy a home. This problem has a simple solution, immigration needs to be paused as soon as possible. Until that happens the trajectory is clear, we are heading towards serfdom under a shrinking pool of national and foreign elites…which might actually be their goal. For how many decades does the government have to do obviously damaging policies before it becomes clear that they are doing precisely what they intend to do?

List of References


[2] The countries allied economically with Brazil, China, Russia, India, South Africa and others.

[3] Economically there is no reason why we should not be friendly with our largest trading partner. Of course geo-politically Australia is being pulled by other forces.

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