Australia’s leading economists have overwhelmingly rejected the idea of cutting down on Australian immigration for the sake of restoring lost wage growth.
In a poll by the Economic Society and The Conversation, 56 top economists in Australia were asked to opine on Australia’s potential immigration cuts to boost wages.
Every single economist bar five rejected the idea of cutting temporary migration to boost wage growth. All but three rejected the idea of cutting permanent migration.
Among the economic experts were a former head of the Fair Pay Commission, a former expert member of the Fair Work Commission’s minimum wage panel, and specialists in the economic modelling and the economic labour markets of Australia’s public and private sectors.
In the poll, the economists were provided with ten government policies and were asked to identify three which would best help deliver a higher growth in wages.
The most selected response was to introduce measures to boost productivity growth (78.2 per cent). Introducing measures to boost business investment in Australia was the next most selected response (50.9 per cent).
The third-most-popular response was to maintain high government spending to boost aggregate demand (34.5 per cent).
Cutting down on temporary migration was the third-least selected option (9.1 per cent) in the poll.
Reducing permanent migration was the second-least option selected (5.5 per cent) by leading Australian economists.
The idea of cutting back growth in female and older worker participation was the least selected option, getting zero votes.
Michael Keane, a Professor of Economics at the University of New South Wales, said that the idea of migration constraining wage growth, when it was really benefiting Australia with population growth and increased labour supply, was naïve and not worthy of comment.
Moreover, Consultant Rana Roy said that ignoring the contribution of migration towards uninterrupted wage growth in the United States, industrialised Europe, and Australia following World War II was nothing short of “cultivated amnesia”.
Robert Breunig of the Australian National University also said that immigrants add to the productivity of the Australian workforce rather than detract from it, and that slowing down immigration would only hinder Australian workforce productivity and growth.
The overwhelming votes against Australian immigration cuts put the country’s leading economists at odds with Reserve Bank of Australia Governor Philip Lowe, who hinted last month that temporary migration to Australia was causing weak wage growth in the country.
He also said that Australian employers were hiring skilled migrants for occupations that could be filled with local members of the workforce, which was diluting the rise in wages in the Australian labour market.