Immigration as a tool to advantage professional women

One day earlier this week the Dominion-Post was editorialising about whether some form of “Trumpism” might come to New Zealand.  As I wrote a few weeks ago, I remain a bit sceptical about quite how much Trump’s victory and the Brexit vote have in common, or about sweeping generalisations as to what electorates are doing/choosing/saying.     The editorial noted that although some have talked of Winston Peters as “New Zealand’s Trump”, in fact (as I have noted previously) Peters has done little when he has held ministerial office:

He did nothing to advance the anti-immigrant agenda when he gained power.  And this fact is a great blessing to New Zealand.

If we allow that, despite the editorialist’s enthusiasm, one of the things that seems to bothering an increasing number of voters in many Western countries has been high rates of immigration –  actual or perceived –  then a Bloomberg article on the very same page of that issue of the Dominion-Post might offer one strand in the complex picture of why.  In that article, a Cambridge University economics academic, Victoria Bateman,  argues in favour of a pretty open approach to immigration because such immigration makes the lives of professional women (and their spouses) so much easier.

Not only does immigration boost the economy, it has also helped empower professional women in the U.K. and U.S. economies over the last 50 years.   The entry of professional women into the labor market has been supported by an army of low-paid — often immigrant — domestic helpers. …. At the end of the day, where would “power couples” be without the low-paid, often female and immigrant, labor on which they depend?

and

Reduced immigration will leave us with a choice: Either life will be more difficult for professional women, or professional men will have to do more around the home.

Yes, I can see all the gains-from-trade arguments that Bateman, and libertarian supporters of an open approach to immigration policy, would advance.  Highly productive people can do, and produce, more if they can deploy support services to assist their participation in the labour force.  This is the counterpoint to the easy-assimilation approach used in New Zealand immigration policy –  if one brings in people much like those who are already here they might settle in easily, but there are few gains from trade.

But it is also a very stark example of the way in which immigration policy is more about redistribution than it is about the prospect of any material overall gains to the citizens of the recipient country.    In the best of cases, the evidence that high levels of immigration boost productivity and per capita GDP in recipient countries very much at all is pretty slender.  There are reasonable theoretical arguments, but even if the signs are sometimes right (ie there are real overall economic gains) the magnitudes are typically small, and can’t easily be seen even over decades.  In some places –  I argue that New Zealand is a prime example –  misguided immigration policy may be materially impairing the economic fortunes of the country as a whole.  But there isn’t much doubt that –  as with many other policy levers –  immigration policy can advantage some groups at the expense of others.  For example, combine planning restrictions with high levels of immigration and there are real windfalls gains for existing landowners –  and commensurate losses for those who would have been seeking to enter that market.

And that is just the sort of redistribution Bateman is talking about.  She welcomes immigration that keeps down the cost of low-skilled labour which means that

educated women have been able to subcontract out their traditional domestic duties, from cleaning and childcare to preparing meals and looking after the elderly.

Perhaps this wouldn’t be (as) morally offensive if there was an entirely separable class of temporary guest workers, who didn’t substitute at all for low-skilled domestic workers.   The temporary workers would gain from the trade, and so would those employing them. But that (separability) isn’t how labour markets operate.  What Bateman is in fact arguing for is a policy designed to explicitly help people like her, at the expense of poorer less highly-skilled Britons (in fact, in the roles she talks of typically poorer relatively unskilled British women).  No one person is ever an exact substitute for another, but there is a great deal of overlap.    Even though she never says it, what Bateman is arguing for is a policy designed to increase the differences in incomes between the highly-skilled and the less-skilled –  for the comfort of the highly-skilled (women and their spouses).

Many advocates of a fairly liberal approach to immigration like to downplay the possibility of any costs to low-skilled natives of the recipient country, but Bateman’s argument relies almost entirely on those costs.  Reasonable people can debate how large the actual adverse effects are, but Bateman clearly believes they are large –  that is why, in her view, immigration makes things so much easier for people like her.     And she can’t even be arguing  –  as some might –  that it is just a transitional effect, or otherwise the possibility of outsourcing domestic duties cheaply would soon go away again.  So it seems to be a vision of society that involves repeatedly importing new waves of lowly-skilled immigrants to keep the relative returns to low-skilled labour sufficiently low to make life comfortable for the professional classes.

Libertarians might not like it, but stable societies are organised around a set of common interests, and a common sense of identity.  Whatever the other arguments for and against immigration, it is hardly surprising that citizens might rebel against a proposal to bring in lots of foreigners to widen the income gaps in society –  not just those between nationals and non-citizen foreigners, but those between skilled and unskilled nationals.   Sceptics of other economic reforms will argue that some of those changes also had that effect, but even if so (which I mostly dispute) it was never the intention, or the envisaged long-term effect.  By contrast, Bateman’s argument is in effect for using immigration to maintain a permanent class of helots –  not always the same specific people, but a constantly refreshed pool of people able to earn relatively little, because of the direct competition fron unskilled new arrivals.

I remain of the view that any immigration we do actively pursue should focus on a small number of very highly-skilled people (in addition to a limited number of refugees etc).  By contrast, Bateman’s vision –  whether applied here, or in the UK or the US – would seem to undermine most people’s sense of what a well-functioning society and economy should look like.

If people are really worried about obstacles to outsourcing domestic duties, take another look at the high maximum marginal tax rates that in many countries (less so New Zealand than most) still encourage people to do it themselves, within families.

Thank goodness that so far Bateman appears to have kept to pen and paper (so to speak) to articulate this argument, rather than the alternative surfaces she used last year for her highly-publicised anti-Brexit protest.

And now it is time to hang out the washing and spend some time with the kids.

11 thoughts on “Immigration as a tool to advantage professional women

  1. Michael
    I have just read an article ‘immigration Policy and the Political Economy of New Zealand’ by Ranganui Walker.
    It appeared in a 1998 book Immigration and National identity in NZ ‘. The book had a mainly descriptive rather than issue or policy orientation – except the Walker chapter. He was not all impressed with the economic rationale of the pro immigration policy
    ‘But this policy does not take into account the fact that New Zealand is a primary producing country,it is resource poor in terms of minerals and oil and i the most distantly placed country in terms of world markets…….
    Despite the flaws in the argument that a proactive immigration policy will resolve New Zealand’s economic problems and a lack of evidence that it will do so, immigration is put forward as the answer”

    I am not normally a fan of Walker’s economic analysis but it had this one right nearly 20 years ago. it is a pity he is no longer with us.

    Liked by 1 person

    • Thanks for the link – will read the whole thing later. But re his intro, the modern academic evidence on the economics of immigration in NZ is largely non-existent, and for many decades was really rather sceptical. It is quite conceivable that some immigration to some places in some times could be really quite beneficial to natives, while in other places it might not be. I remain sceptical that a large scale immigration programme to an independent Montana would be of net benefit to the native Montanans.

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      • The maths is actually quite simple as to the benefits of having people. 10 million cows generate only a meagre $10 billion in export sales. 1 million working people in a population of 4.5 million people generate Net disposable income of $160 million plus margin equates to economic activity well in excess of $160 million. Therefore more people generate more GDP. Of course you raise the issue of productivity, therefore government focus needs to be on changing the type of industry rather having a myopic focus on immigration targets as a solution to our productivity poverty. The solution lies in more productive industries. How we get there is the question. It is not a question of what target but a question of what productive industry can we grow.

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      • Montana – response to GGS

        Montana’s largest industries are agriculture (including both crops and livestock), travel and tourism, timber, and mining. Agriculture is an essential part of Montana’s economy. It contributes over two billion dollars to the state annually

        Agriculture is an essential part of Montana’s economy. It contributes over two billion dollars to the state annually. Of that two billion, livestock contributes about half

        Population: 1.024 million

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      • Not too sure the point you are trying to make in Montana. in 2015, the total GDP of Montana was $45 billion. The largest industries is not agriculture. In 2015, the largest industry in Montana was finance, insurance, real estate, rental, and leasing. This industry accounted for 17.8 percent of Montana GDP and had 5.0 percent real growth. The second largest industry was government, which accounted for 15.0 percent of Montana GDP and had 0.4 percent real growth.

        https://www.bea.gov/regional/bearfacts/pdf.cfm?fips=30000&areatype=STATE&geotype=3

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  2. Industry drives immigration policy. The big mistake is to think that we can bring in highly skilled migrants for jobs that do not exist. Our top 4 industries, tourism, milk, meat and international students require chefs, waiters, prostitutes and cleaners. It is our focus on service intensive industries that have lowered our productivity. It is the nature of service to have more staff serving fewer clients and the aim is to have staff actually take time and care of clients.

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  3. At the risk of bucking the trend of the comments on this thread – and actually commenting on your post – I found the Dom Post article quite distasteful. It seemed to promote as you say waves of low paid workers to make the lives of the well paid more comfortable. I was stunned that there was no sense of irony or just simply ‘have you heard yourself’ coming thru.

    As an aside I remember Zoe Baird – I think – who was going to be Bill Clinton’s Attorney General not getting the nomination because she had employed illegals to look after her children. Something all professional women in the US did. I found that quite searing.

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