In 1882 US Congress passed the Chinese Exclusion Act, which banned Chinese labourers from entering the United States and prevented Chinese-born workers already in the country from obtaining citizenship or re-entering the country. The goal was to improve economic opportunities for white labourers, but a new study demonstrates that the actual result was a marked slowing of economic growth in the western United States, along with fewer employment opportunities for white labourers. Only one industry, mining, saw benefits for white workers. The economic harms to the western US economy lasted well into the twentieth century.
That’s just one of a number of studies over the past decade, detailed by the study authors, that demonstrate substantial harm, in terms of slower growth, lower innovation and productivity, and less employment, from immigration restrictions in Western countries.
Donald Trump’s planned mass deportations of millions of people illegally in the United States is about to furnish another example. US business lobbies are already criticising the plan, led by the construction industry, which in some states relies on immigrants for up to a third of its workforce. In Texas, where half a million illegal migrants work in construction, business is warning “It would devastate our industry, we wouldn’t finish our highways, we wouldn’t finish our schools.” In agriculture, some are predicting a loss of output of US$30-60 billion.
There are also the fiscal consequences: illegal immigrants pay US$50 billion in federal taxes and US$30 billion in state taxes a year.
Warnings about the economic costs of mass deportation were expressed before the election, but they fell on deaf ears: 54% of American voters support mass deportation, according to one poll, including 25% of Democrat voters. And 55% of American voters believe that immigration overall is too high. That’s despite the fact that a substantial majority of Americans have long believed the overall impact of migration was positive.
British voters were also warned of the consequences of Brexit and closing the UK border to EU workers in 2016, but a narrow majority ignored those warnings. Brits didn’t even get the benefits of a cut in migration — having negotiated Brexit, governments like Boris Johnson’s simply swapped large numbers of immigrants from the EU for large numbers from outside the EU — although not enough to prevent significant workforce shortages in the UK.
A similar lack of interest in the economic consequences of cutting migration seems to be at work here in Australia, with voters — excluding younger people — believing migration is too high, despite knowing migrants fill jobs and regarding migration as a positive.
Clearly this is not an issue of poor communication — i.e. if only the benefits of migration were explained better, there’d be higher support. People know the benefits of migration and still want it reduced — and the arguments from business and vested interests that benefit from migration only sound self-interested anyway. (This also directly parallels the view among progressives, common a decade ago, that if only governments explained that asylum seekers arriving by boat were no threat to Australia, there’d be higher support for accepting them. Labor was not dumb enough to try this complicated form of political suicide, but signed up to boat turnbacks and offshore detention from opposition).
In fact, given there’s little difference in the proportion of locally born Australians and foreign-born people from English-speaking backgrounds on the issue, it’s clear that even a large proportion of people who have directly benefited from migration by being migrants themselves want lower migration.
What’s different about post-neoliberal politics is that it’s no longer possible to have a bipartisan consensus on migration of any kind, not just uncontrolled illegal migration. Migration has now been weaponised by the right, which is less responsive to the demands of its traditional business supporters, and there’s no going back to the days when the major parties implicitly agreed to run high migration even if the electorate makes it clear that it wants less migration. Now, what the electorate wants, it gets.
Even the days of trading off harsh border security with high migration — John Howard’s approach, with the silent endorsement of Labor apart from Bob Carr — have vanished amid a housing affordability crisis, congestion and lack of access to services. There’s no hiding high migration any more, not in our capital cities. And even if Labor had succeeded in curbing migration over the past 12 months, you can bet Peter Dutton would be promising that the Coalition would always be tougher on migration than its opponents.
The difficulty for policymakers, assuming they can ever get migration down — which as the experience of Boris Johnson’s government shows, is not a given — is that the problems of low migration are harder to deal with than the problems of high migration. High migration adds to economic growth and increases tax revenues while reducing wage inflation now that we’ve entered the era of permanent workforce shortages. With a stronger economy and budget, governments can fund more infrastructure and housing — something they have only belatedly begun doing over the past decade.
In contrast, a low-migration environment has less demand-driven inflation and more supply-side inflation, with lower overall growth and a poorer budget. Governments have less capacity to respond to existing infrastructure and service challenges. Sectors that rely heavily on migration, like our caring industries, will inevitably become less accessible, especially for regional communities and low-income earners. But voters across the West, especially Anglophone (i.e. white) voters, appear to be more comfortable with this outcome than with high numbers of migrants.
How much they’ll like it after a decade of worsening workforce shortages and lower growth, however, remains to be seen. At least Australia is likely to remain attractive to migrants compared to countries like Japan and China that are ageing rapidly and have no recent history of migration. In years to come, the pressure might increase to turn back on what so many want turned off now.
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