In the few days after the Christchurch shootings, a few of the more rabid on the left appeared to want to rule out of court any discussion – ever – about immigration policy. Immigration was good – was their prior – and more immigration better, and no correspondence could be entered into. Decent people don’t discuss such issues, except perhaps to celebrate.
The other day we had a similar sort of voice from another point on the political compass, this time in a column from Kirk Hope, the head of the leading lobby group advocating for the interests of businesses, BusinessNZ. Despite counting myself pretty strongly pro-market (not at all the same as pro-business) I don’t often agree with Hope (I just googled his name and the name of this blog to remind myself of some of his more-egregious previous claims). But Stuff seems to think him worth publishing, and he does head a pretty big advocacy group.
Hope’s key assertion?
One of the challenges we must face is for our politicians to stop treating the topic of immigration and immigrants as politics.
What a breathtaking proposition. One of the most substantial instruments of government economic and social policy and Kirk Hope thinks that it shouldn’t be debated by politicians (let alone, presumably, the rest of us). Politics isn’t a bad thing – as Hope seems to imply – but something pretty fundamental, a big part of how we decide (and refine that view) what sort of country this will be.
As it happens, Kirk Hope never actually says how he thinks immigration policy should be decided, if not by politicians, weighed competing interests and claims. Perhaps by BusinessNZ? He never even tells us what his own preferred policy is. Perhaps is he just some open-borders absolutist who thinks the very idea of an “immigration policy” is abhorent? Probably not (there aren’t really very many advocates anywhere for such a policy). My guess is that he’d like to keep on with something like our current immigration policy (probably the most aggressive anywhere in the advanced world), and just a bit more. He doesn’t tell us, just urges that “politics” be removed from the process, all while advancing a mix of threadbare and/or flawed arguments for high rates of non-citizen immigration.
So how does Hope make his case?
First, there is the tired rhetorical trope about “a nation of immigrants”
It is a truth that New Zealanders are immigrants or the descendants of immigrants, and we are ethnically diverse.
Which is pretty meaningless, offensive, and acts to diminish people’s sense of identity with New Zealand. If all human beings are ultimately descended from people emerging from, say, the Rift Valley, at very least everyone other than perhaps Kenyans and Tanzanians is descended from immigrants. But what of it? Closer to home, the ancestors of the Maori population came many hundreds of years ago. They have no other home. I’m have no idea of Hope’s ancestry, but I’m one of those (of European descent) with no other home but New Zealand – I’ve never known an ancestor who wasn’t born in New Zealand. But again, so what? It is simply irrelevant to the question of how many people we should import now, on what terms, with what skills or backgrounds. Like many who run the line, Hope makes no effort to draw out any logical implications from his factual statement – presumably because there aren’t any.
Then we get another factual statement with few/no implications
It is also true that the demographics for New Zealanders born in New Zealand tell a story of aging and regional depopulation.
And? People leave regions when the opportunities in those regions aren’t particularly attractive. There is no obvious role for central planners (like Mr Hope) to argue for policy initiatives to repopulate areas they happen to think aren’t growing fast enough. I suspect that Hope is also hoping to skate over the evidence that New Zealanders have been leaving the region of Auckland for most of the last 20+ years. And if great opportunities do exist in particular regions, wage adjustments are likely to act as an effective signal (higher wages never seem to be part of how business lobby groups think markets should deal with incipient “labour shortages”).
Then we get a grab bag of statements inviting a “so what?”
We will soon have more people aged over 65 than under 15 years of age. Auckland and New Zealand will be dependent on immigration for skills. Two out of every five New Zealanders will live in Auckland, nearly a third of them Asian.
Isn’t it great – something to celebrate – that life expectancy is improving so much that there is an increasing share of the population aged (well) over 65? Apparently not to Mr Hope. Or was his (central planning again?) concern that New Zealand couples aren’t having enough babies?
And what of that strange claim about skills? Is Mr Hope deliberately avoiding the OECD skills data showing not only that New Zealand workers had among the very highest skill levels in the OECD, but that immigrant workers on average had lower skills than natives (that gap is smaller in New Zealand than most, but still there)? Let alone the official SNZ data that confirmed again last month how poorly the Auckland economy does (GDP per capita) relative to, say, big cities in many other (overall more successful, typically with less immigration) OECD countries. Inconvenient I suppose.
Then claims start getting more far-fetched
The labour market needs to grow by 1.5 per cent to support moderate economic growth of 2.5 per cent, but actual labour market growth tends to be under 1 per cent. Workforce exits are increasing, while workforce entry levels are modest and declining. Our people shortage is getting worse.
This is just nonsense stuff. Sure, all else equal, if your population growth rate is faster so will the rate of growth of GDP. But – unless you are raising an army – total GDP doesn’t much matter to anyone. What matters, more closely, is real GDP per capita and the real GDP per hour worked that undermines that per capita growth. If, say, the population were static – as it now is in many OECD countries – 1.5 per cent annual GDP growth would be a quite reasonable outcome. As Mr Hope surely knows, we’ve had almost no productivity growth recently (despite, because of, or just coinciding with very strong immigration).
A central planner apparently to the core – did he tell the (generally pro-market) people at BusinessNZ this when he was hired? – Mr Hope is alarmed about “people shortages”. This just incoherent stuff, and he shows no sign that he has looked, even cursorily, at how countries are managing where the population is flat or even falling a bit? As a hint – but he could check the data himself – most are achieving faster growth in per capita income and productivity than New Zealand is.
He offers some strange arguments about how we need immigrants to “replace” New Zealanders who are retiring and yet a little later on even he acknowledges that immigrants themselves get old. If there are fiscal problems associated with increasing life expectancies – and there are – why wouldn’t you tackle those directly (eg raising the NZS eligibility age)?
We are then get back to some other claims
Immigration contributes to population and economic growth, provides an expanded talent pool, helps us understand overseas markets, and contributes to the diversity and vitality of New Zealand communities.
I’d be impressed – though still not thinking that immigration policy should be taken out of the realm of politics – if he’d claimed (and offered New Zealand evidence for) that rapid New Zealand immigration had boosted productivity growth. We never know the counterfactual, of course, but in our decades of high non-citizen immigration, we’ve made no progress at all in closing the productivity gaps, and have actually fallen further behind. Oh, and “understand overseas markets”…..well, perhaps, except that New Zealand has one of the very worst exports (as a share of GDP) performances of any OECD country – levels and changes – despite all that immigration.
Not content with the evidence-free-zone so far, Hope ups his rhetoric
Our people shortage is critical now because of the opportunities that are opening for New Zealand business.
The successful completion of the giant Pacific trade deal CPTPP and the likely completion of an European-New Zealand trade deal mean 46 more markets will soon be open to enhanced trade with New Zealand businesses.
So, while our markets are expanding our working population is reducing.
So despite having probably the largest (per capita) non-citizen programme in the OECD, it just isn’t enough. He calls for even more.
Even serious defenders of the New Zealand immigration programme will be embarrassed by this particular line. After all, no serious analyst claims that CPTPP will be worth more than perhaps a 1 per cent boost to GDP – and serious analysts would claim those gains would come through terms and trade and higher productivity, not conditioned on even more people. As for the EU, I know Hope is a big advocate of that possible deal, but as I pointed out in debunking an earlier article containing his over-egged claims (that the EU deal might finally be what transformed our – already – “rockstar economy”), the best sober estimate of the GDP gains from Canada’s “free trade” agreement with the EU was about 0.5 per cent.
And wasn’t there the small point that, despite all the various trade deals New Zealand has signed up over recent decades – including those with Australia and the PRC – and the reduction in global agricultural protectionism, exports and imports have been falling as a share of New Zealand GDP. Perhaps another million migrants will make all the difference? But perhaps not.
Hope ends by getting out the violins
We need to ensure that our political thinking more clearly acknowledges that we are an immigrant nation at our core, that we truly value diversity, that we are inclusive and will celebrate and support new New Zealanders as we all grow our economy and standard of living, contributing to our communities and our future.
I could – and would- reframe this as something along these lines
We need to ensure that our political thinking more clearly acknowledges that after one of the largest-scale immigration programmes undertaken anywhere in recent decades, there is little or no evidence of economic gains for New Zealanders, and at least the possibility that such rapid rates of immigration, to a location so remote, have made us poorer rather than richer. Responsibility for that rests not with the migrants themselves – almost all of them as simply pursuing the best for themselves and their families – but with our own political and business leaders, who have championed an ideological cause (with both globalist and bigger-New Zealand strands) even as the economic evidence in support of their claims has failed to arrive. Notwithstanding a wider range of ethnic restaurants (and associated consumption diversity), there has simply been no compelling evidence – as there is none globally – that “diversity and inclusion” (as distinct from the ongoing contest of ideas) has produced any economic gains whatever. If anything, New Zealanders at the bottom of the socio-economic heaps have been paying an increasing price for this obeisance to an “elite” ideology.
I’m still left rather gobsmacked that a supposedly serious public figure can, apparently seriously, suggest that immigration is other than a natural and appropriate subject for intensive political debate. What is more fundamental to a country than the people who make it up, and yet that is what immigration policy influences very heavily, at least when done on the huge scale our politicians have chosen in New Zealand. Even at a narrowly-economic level, it represents a significant change in the overall resource mix and productive structure of the economy (especially in a country as natural resource dependent as New Zealand or Australia).
Immigration policy doesn’t make that much difference in any particular year, but we’ve been running something like current immigration policy now since the early 1990s. In 1992, New Zealand’s population was about 3.5 million. In the years from 1992/93, we’ve granted residence status to more than 1.1 million non-citizens. That is a huge number. Some, perhaps many, will think it is a “good thing” – for various possible reasons – and others will think it a disastrously bad choice (that’s my view, even if more apparent in hindsight than it could have been in 1992). Even among those who think it a bad choice, some (me) will emphasise overall economic performance arguments. Others might emphasise real world second-bests around housing, or traffice congestion, or just a preference for being small. Others again might emphasise environmental pressures. Others might raise concerns about precisely the sort of “diversity” Kirk Hope and the cheerleaders celebrate, highlighting issues around cohesion, trust, mutual support etc. And others too might be uneasy about large-scale immigration does to the relative place of Maori in New Zealand. Some might just think that the ideological etc make-up of future New Zealand should be determined by the individual choices of New Zealanders, not by politicians skewing the future population one way or another. But all those disputes are naturally and appropriately the stuff of politics. Given our relative economic underperformance, notwithstanding decades of large scale immigration, all these angles should be debated more vigorously, not less.
Most of my own arguments around New Zealand’s immigration policy have been economic in nature. On its own, the economic track record should have been more than enough basis for a rethink, were it not for the ideological priors of the champions. Perhaps the most accessible version of my economic story is here, in a speech I did 18 months or so ago.
I have occasionally commented on various social and cultural dimensions, including in two posts sparked by the 2017 New Zealand Initiative report on immigration policy (here and here) and in some remarks on diversity, and its limits in a stable democracy, here.
I was also reading yesterday an interesting article from the latest issue of The Atlantic by David Frum on US immigration, experience and policy. Frum is a pretty determined never-Trumper, and yet he concludes his article this way
Reducing immigration, and selecting immigrants more carefully, will enable the country to more quickly and successfully absorb the people who come here, and to ensure equality of opportunity to both the newly arrived and the long-settled—to restore to Americans the feeling of belonging to one united nation, responsible for the care and flourishing of all its people.
Every country is different, but it is worth recalling that US immigration policy – under all recent presidents – has targeted non-citizens inflow about one third those of New Zealand (in per capita terms). I don’t agree with everything in his article, and some of the issues are different for New Zealand than for the US – there is a more plausible argument in the US context that immigration is roughly a wash (in economic terms) for natives than there is here – but I thought it was a piece worth reading and reflecting on. I wonder what Mr Hope would make of it?