Immigration – bring us your masses

I’m reading “Immigrants – your county needs them“, by Philippe LeGrain. Fascinating. I’ve been an advocate of open borders for a long time – and I mean truly open, anyone can live where they like (subject to limitations on criminals and the like). So it seems is Philippe and a host of economists.

Turns out that a couple of studies have shown that the economic value to the world of closed immigration  policies is insanely high – the latest one, using 1998 data, puts it at US$55 trillion. If you adjust that down to account for barriers that would still remain, it’s still an enormous number.

While the skills based immigration feels right, and works for me personally, the unskilled immigration policies are perhaps more important.

Immigrants are more willing to work harder at lower income jobs – they simply value the jobs more. I recall all the Kiwis and Aussies working in the UK – we would simply outwork out local peers, whether in the back office of a merchant bank, in a pub or in teaching.

It’s changing now, as the immigrants from much poorer places than downunder are taking those pub jobs – immigrants from Poland and other EU countries.

But they are also creating new jobs – it is now posible to get building work done in London for relatively reasonable prices. The labour is all Polish, and English builders are hiring Polish help, while Polish builders have also set up on their own. You can also now get a (often Polish) cleaner for a not unreasonable price, as you have been able to do for years in the USA.The USA is fed by (mainly illegal) migration from Mexico and the rest of Latin America, and becasue igrants are often illegal they are often paid under the table.

In NZ and Australia it is really expensive to get a cleaner, to get your shirts ironed, to get a gardener, cook, pool boy or au pair. It’s expensive becasue we limit immigration of unskilled workers, and it is expensive becasue we insist on minimum wages. Abandon both and all of a sudden we would be able to afford a lot more help at home (as well as builders).

The impact of that is that we would have more time to send with our families, or at work and we would be  able to perform higher value work. The example Philippe uses is the investment banker woman who can now work full time. Fast forward and the children of those immigrants are now Kiwis and Aussies, and are hiring more immigrants to help them.

It’s how the USA, Australia and NZ were formed, and we could do well to recall those lessons. NZ and Australia have plenty of room to sustainably grow, and the Philippines (for example) offers a ready pool of educated English speaking folk who would jump at the chance of a chance downunder.

How about it?

The UK example is a good one – tens of thousands of Polish and other poorer EU country immigrants have not stolen jobs from UK workers, but instead created a whole new series of jobs. Previously it was too expensive to pay for British builders to renovate your house, and now Polish workers supply cheap, hard working and effective labour – opening the market.