Over 2M Migrants

Discussion in 'General Distance Learning Discussions' started by AsianStew, Jan 25, 2022.

  1. Stanislav

    Stanislav Well-Known Member

    Yeah... a lot of people parrot a certain country's claims that "Ukraine is run by the U. S. State Department". I wish it were true; the decisions would at the very least be not any worse than what the locals come up with. Actually, I jest; they would be better, without any doubt. I would gladly vote (especially since we have a Consulate in Houston, now) for a party that would just straight up say "we will go to the U. S. Embassy and do exactly what they say".
  2. SteveFoerster

    SteveFoerster Resident Gadfly Staff Member

  3. tadj

    tadj Active Member

    I find this particular economist’s arguments on immigration to be much more reasonable than the unconditional “let’s continue to increase immigration levels” mantra that seems to be mindlessly repeated among the Canadian establishment. I wonder what you think about his nuanced arguments. The piece was published in 2021 on Public Policy Forum, a non-partisan think-tank.

    Don Wright. PhD in Economics from Harvard University. From July 2017 to November 2020 Deputy Minister to the Premier, Cabinet Secretary and Head of the Public Service of British Columbia, Canada.

    He proposes “a shift away from immigration policy that is focused merely on increasing GDP to one focused on increasing GDP per capita and the economic success of newcomers and existing Canadian residents.”

    For most of the past 40 years Canada has been in a “bad equilibrium” wherein real wages have essentially stopped growing. In the absence of rising real wages the need for private sector innovation was reduced, resulting in lower investments in productivity-boosting capital, new products, and technologies. Because the rate of productivity increase has fallen significantly, business is more and more focused on keeping labour costs low. Stagnant real wages and a sense that workers are viewed as a cost to be minimized undermines workers’ commitment to innovation and productivity improvement. Government policy, consciously or unconsciously, has sustained the resulting low-wage-low-productivity model of competitiveness, hence keeping Canada in the bad equilibrium.

    Some nuance on immigration policy, please (it’s GDP per capita, stupid!)

    There is a growing push from opinion leaders and decision makers to significantly raise the level of immigration.[19] The current federal government has raised the target for annual immigration levels and seems on a path to raise it further down the road.

    Let me state upfront that I am in favour of maintaining immigration at significant levels. Over the past 60 years Canada has evolved into a wonderful multiethnic, multicultural nation. That doesn’t mean it doesn’t have issues with tolerance and inequitable socioeconomic outcomes. But the general view of the population is that immigration continues to be positive for Canada.[20] Furthermore, Canada has a moral obligation to do its share of ameliorating the suffering of the millions of refugees created from regional wars, civil wars, ethnic cleansing and failed states.

    Given the emphasis in this paper on the essential need for tightness in the labour market, however, it is important to consider whether higher immigration levels will be helpful or harmful in re-establishing a rising standard of living.

    The rationale for the need to increase immigration levels weaves together four elements:

    1. To offset the challenges of the aging baby-boomer bulge in the population pyramid;
    2. To keep GDP growing by increasing the labour supply and the demand for goods and services;
    3. To realize greater economies of scale; and
    4. To supply employers with the workers they cannot find.
    The first of these sounds reasonable on the face of it. But there is much less there than one might suppose. The age structure of immigrants is not that different from the existing population in Canada. On average it is somewhat younger, but not dramatically so. This is because, in addition to prime working age adults and their children, the immigration mix also includes family class parents and grandparents. This has led at least one analyst to joke that the only way immigration could be a solution to the population pyramid problem is if Canada only accepted 15-year-old orphans as immigrants.

    A recent analysis[21] shows that “changes in immigration levels have impacts on the margin only: no increase within the realm of practicality can prevent population aging. Other policies to ease the demographic transition, notably encouraging people to work longer are at least as powerful.” The authors calculate that Canada would need to raise immigration levels to 1.4 million a year to even out the population pyramid. In 2019, 341,000 — a record level — arrived in Canada.

    The second is more than a little specious, hence the somewhat rude subtitle for this sub-section. Almost daily news items quote somebody of influence saying the only way to increase the rate of growth of GDP is to increase immigration. Some interests will benefit from increasing immigration levels — employers who would prefer a buyers’ labour market to a sellers’ labour market, the real estate industry, financial institutions that provide mortgages and people who already own their homes. But the critical metric is not GDP; it is GDP per capita and how it is distributed.

    The third is an interesting concept, but a lot more analysis needs to be done to prove that this can be accomplished while ensuring that the standard of living of the broad middle class is elevated. Canada has, in essence, been running an “experiment” of the concept since the 1980s — it has increased immigration levels, and its population has grown at a higher rate than that of the United States. And yet the absolute improvement in Canada’s standard of living has been disappointing — the central motivation of this paper — and its productivity performance relative to the United States has been weaker. While this might not be dispositive evidence against the economies-of-scale argument, at the very least it suggests that concept remains unproven.

    It is the fourth element that really needs to be interrogated, because it cuts to the heart of the whole argument of this paper.

    The standard of living of the typical Canadian family is significantly affected by two key elements:

    • The wages that members of a family earn; and
    • A family’s cost of living.
    When a labour market is tight employers must compete for workers, which will lead to higher wages and better working conditions. To repeat, when businesses complain about having difficulty finding enough workers, what this really means is that they cannot easily find the workers they want at a wage they want to pay. But, within reasonable limits, this is a good thing. It forces employers to pay higher wages, provide better working conditions and drives the creative destruction that leads to higher productivity, more valuable products and better business models.

    Too often, the rationale for higher immigration levels sounds like business wanting to avoid this creative destruction dynamic — “just provide more workers who will be happy to work for the current prevailing wage and we won’t have to worry about all that innovation stuff.” Canada needs to change this mindset. It’s not going to do that if it continues to signal that employers can expect increased immigration levels when they cannot find the workers they want domestically at the wages they want to pay.

    Close to 75 percent of immigrants settle in these six major cities. There are multiple reasons why Canada’s housing has become so unaffordable, but it defies credulity to argue that high levels of immigration will not exacerbate the growing unaffordability of housing in Canada.

    The interaction of supply and demand is a real thing. Immigration levels of between 400,000 and 425,000 per year (the current target of the federal government) means an additional demand for approximately 170,000 new homes each year. For context here, Scotiabank recently came out with a piece arguing that Canada already has a structural housing shortage.[23]

    As noted above, this is good news, at least on paper, for those who already own their homes. It may only be on paper because we all must live somewhere and the house equity a family has can only be converted into an increase in their standard of living if they are able to move to a more affordable city. But the real concern is with those who don’t already own a home. How is the next generation going to be able to afford what is a core part of the Canadian dream? Those who are lucky enough to be able to count on “the bank of mom and dad” may be able to swing it. But think about the prospects for upward mobility for those whose parents don’t have the capacity to contribute, or who immigrated to Canada without home equity here.

    Full article: https://ppforum.ca/publications/don-wright-middle-class/
  4. Stanislav

    Stanislav Well-Known Member

    Also, they should work smarter, not harder. Seeing how he doesn't propose how such policy may look like, meh. In general, yes, Canadian public policy could use some more sophistication, on most any topic. It is just worth noting when even Ottawa can do something better than Washington can.

    Yeah, increase housing supply then. From my personal experience, as a substantial number of recent immigrants I know are in construction and related trades, it is not obvious to say the least that too many immigrants is any kind of, let alone significant, obstacle to this.
    Immigrants flock to six major cities (Toronto, Vancouver, Montreal, Calgary... what are the other two?) because that's where economic activity and infrastructure are there for them. This is a problem, but its solution lies beyond immigration policy. As it is, immigration accounts for 3/4 of Canada's population growth (more like 80% in pre-COVID world); what would it do to the economy to permanently cut demographic dynamics by THAT much. The country needs immigrants. For that matter, US does, too.
  5. AirDX

    AirDX New Member

    Answer: put 'em on busses north and give them jobs. Everyone is hiring "unskilled" labor. Every manufacturing plant is hiring and training people. Production and hours are curtailed because of a shortage of workers. Corporations are putting billboards up along the highway, looking for workers. We could absorb 2M and barely notice.
  6. SteveFoerster

    SteveFoerster Resident Gadfly Staff Member

    I'd guess Edmonton and Ottawa, since the former has oil jobs and the latter has an industry that never goes out of business.
  7. Stanislav

    Stanislav Well-Known Member

    Yes, you're right.

Share This Page