Believe it or not, I actually wasn't wanting to enter this debate. The problem was that somewhere in my idiot brain I had a vague recollection of a PC report and I thought it might be of interest to those who are interested in this discussion.
*sigh*
But now I am here, I refer (below) to page XXVIII of the PC Report (part of "The Overview").
What are the links to per capita income and productivity?
As part of this study, the Commission has been asked to identify ways in which migration and population growth impacts on productivity. Although migration increases the absolute size of the economy, for the purpose of this study, economic growth is expressed in per capita terms (per head of population). In terms of the living standards of individuals (and families), it is income (and consumption) per capita that is most relevant. The limitations of using indicators such as Gross National Product (GNP) per capita and Gross Domestic Product (GDP) per capita as measures of welfare have long been recognised. Nevertheless, they do allow us to reveal much about the economic consequences of migration and population growth. The aspects not captured by such measures are considered in qualitative ways in this report.
From XXXVII
Summing up
The greater emphasis on skilled immigration has contributed to improved labour market outcomes for immigrants. Consistent with previous Australian studies and research in other countries, the effect of increased skilled migration on average living standards is projected to be positive, but small. It is also likely that most of the benefits accrue to the immigrants themselves.
Yes, Belbo, immigration = more bums on seats = a bigger economy = more demand.
But what the PC said was that basically the bigger pie is just shared by more people - as they say, "the effect of increased skilled migration on average living standards is projected to be positive, but small".
I'm not, and I don't think the PC is "anti-immigration", but what they seem to be saying is that if you want to increase your population and the alternatives are either "growth from within" (increased birth rates) or "skilled migration", it is, in an economic sense, 6 of one and half a dozen of the other.
Well, for somebody who didn't want to get into the debate, you've done a stirling job of bringing helpful insight into it. My personal and most politely-meant kudos for that.
Do be assured I would never suggest the PC was ideologically-inclined as to the merit of immigration, or indeed anything else. I expect it is an outstanding institution premised on delivering objective analysis (as best as such an ideal can ever be achieved) in all of its endeavours. My only issue is that there will always be terms of reference for any inquiry, and that it might (quite properly under given terms) have addressed productivity directly and national economic prosperity only at a tangent in this instance.
What tangent? What, more specifically, do I think this PC report is overlooking? The answer: Job vacancies.
If a company has 10 workers, let's say it will contribute $2M to economic turnover.
Now, let's assume, there is unmet demand for the output of 10 more workers from that same company, and the company imports 10 immigrants to meet that demand (because umemployed locals are not keen on those - or more likely, any - jobs).
Even if that only adds another $2M to economic turnover, profit rises (because fixed overheads simply do not rise in equal proportion to employment). And (here's the point) that increased profit level feeds back - one way or another - into
additional economic demand.
Hence, an expanding economy is not a duplicate of its former self, only at a larger scale: The expanded economy benefits from
efficiencies of scale. If we have job vacancies - as we most seriously do - why not fill them and benefit?
This scale issue is actually critical in global economics, as I've no doubt you are well aware: The bigger your domestic demand, the less dependent you are on international demand to ride out international economic turmoil (China being the case in point, naturally).
So big - speaking with due humility as an economics amateur - is beautiful in the end, isn't it Mark?
