Wednesday, January 2, 2008

WILL RUDD’S IMMIGRATION POLICY BURY THE WELFARE STATE?

According to what I see on the Internet tonight at 8pm PST, Mr. Rudd will be forming a government in Australia. The corrupt and incompetent Mr. Howard, architect of criminally reckless population growth, opponent of Kyoto, Mr. Bush’s accomplice on Iraq, is done. Good riddance. But now along comes Mr. Rudd.



Will Rudd slow growth down? Is there any conception in the Labor Party that growth is not necessarily an unmitigated good? Does this party have a Population policy? There are 21 million now, are they going to stop at 25 million, 30 million? What’s the plan?



The real immigration rate under Howard was said to be 300,000. Are you confident Rudd would cut this back to pre-Howard levels? It is fashionable on the centre-left and greens to favour fewer professional-business migrants and more asylum-seekers. Is that a good trade-off?



In an article I wrote about ethnic crime, my argument was dismissed as alarmist and inaccurate in part because Australia’s crime future could not be predicted on the basis of American statistics. Why? Australia, in effect, drew immigrants from a better “class’ than America did. The United States admits a great many more unskilled migrants who proportionately tend to impose greater costs on the education, welfare and prison systems. Since, under Howard, Australian selection criteria favoured professionals and the skilled, immigrants to Australia of all ethnicities tended to be much more law-abiding than American or European counterparts.



Yet, some of those same critics would turn around and argue for the selection mix to mimic North American patterns. Slash the skilled , business and professional quota, and instead welcome more refugees, the great majority of whom are unskilled.



The case for this position is prima facie, humanitarian, but an economic rationale is also advanced. Accepting professionals from undeveloped countries who have spent precious resources training them is a kind of poaching that negates whatever foreign aid we provide them. The environmentalist perspective though, is that professional, skilled and business migrants promote economic growth in the host country. The other class of non-skilled immigrants would retard it. Slowing growth is what we need to do.



My dispute with this latter contention is an unpopular one. It has tones of neo-liberalism that is not quite resonant with many on the left today. But here it is a nutshell.



Since the late 1970s, left-wing governments, first in Britain, then in France, Greece and Spain and ending in 1991 with the flagship government of Social Democracy in Sweden, accepted “The Laffer Curve”. That is, marginal tax rates in a market economy could only be pushed up so high before tax revenue began to fall. To further social spending programs, the leftist raison d’etre, revenue could only be found by growing the economic pie. That is, by forming an ideological bond with the right in a joint commitment to economic growth. Most socialist governments went further. They even sold off public companies for more cash.



Once upon a time Socialist leaders in North America fought to protect the wage levels of workers by restricting immigration. Now you would be hard put to find any social democratic leader or party that is not willing to fight for an open doors immigration policy at the expense even of the workers who vote for them. Dutch Labour Party leader Marjinnsen is an exception to this rule, as is the Socialist Senator of Vermont, Bernie Sanders.



The desire to open the floodgates, except at election when all social democrat leaders protest their desire for more reasonable levels, is simply a reflection their total faith in population growth as an agency of economic growth, and economic growth as a means to fund the welfare state and lift the poor out of poverty.



Well, statistics show that ten years of Blairism has failed to do that. The income gap between north and south England is as large now as it was under John Major and Thatcher. There is essentially no class mobility in Britain either. No wonder 85% of Britons polled this fall declared that their class background prevented their advancement. The top student in the country had the misfortune of carrying a Geordie accent, and as a consequence neither Oxford nor Cambridge would accept her. But Harvard would. Economic growth never solved poverty, created opportunity or improved equality. It’s just done a number on the planet.



Mass immigration is like a herione fix. A new injection affords temporary relief. In response to the new demand more shopping malls and subdivisions are built. What Bob Carr called “stupid growth”. But guess what. That growth creates more labour shortages. So many houses are built, there is a short of electricians, and the new subdivisions with all those new people need doctors. Where are they going to come from? Ah ah. South Africa. Why not? Those poor blacks over there don’t really need them, do they? We need another fix.



Immigration. Growth. Labour shortages. Immigration. Growth. Ad infinitum. And you can’t hop off this mad carousel because there are just too many people making big money from this demographic scam. But aside from the volume of immigrants, the content affects the equation too. OK, skilled professionals and business class migrants promote growth. Indirectly, though, unskilled migrants and asylum seekers do as well. How so?



The Rector Report of the Heritage Foundation submitted this year found that each unskilled illegal immigrant family in the United States drew $23,000 more per year in government benefits than they paid in taxes. The American taxpayer was in effect donating a Ford Mustang convertible to each and every illegal immigrant family (4-13 million of them) per year. Their higher incarceration rates were not factored in.



The Grubel Report done for the Fraser Institute a few years ago came to much the same conclusion for Canada. Over the 12 year period studied, immigrants cost the Canadian taxpayer $18.3 billion more per year in the services provided to them than the taxes they paid. The problem is, about three-quarters of immigrants do not have the skill-set to earn sufficient income to pay high enough taxes to compensate for their use of Canada’s vaunted welfare state.



The question is, can we realistically defend the welfare state from mass immigration of the historic scale that we have recently seen from non-traditional sources, or can we accept refugees in such unlimited numbers that future environmental and political catastrophes promise? Can we become the soup kitchen to the whole world? Can Australia pay out $250,000 in medical benefits to each senior sponsored by an immigrant or refugee? What are the settlement costs for refugees, ESL costs etc?



What’s your answer? Tax the rich? It has been tried. In Britain. Mitterand’s France. In socialist Greece and Spain and Sweden pushed the envelope. Re-nationalize what has been privatized? That takes money too. And remember, Britain and France already had a large public enterprise sector. But it was hamstrung because socialists believed in break-even pricing policies. State enterprises were discouraged from making a profit. Without making profits, no revenues went into government coffers to fund the welfare state.



Bottom line. The welfare state can only be supported by growth or taxes. Growth will bury the environment which will eventually bring down the economy. And if there are limits to growth, in a market economy there are limits to taxes.My crystal ball tells me that the welfare state will be looked upon one day as the relic of a golden age, a quaint luxury. When the oil economy collapses, we’ll be fortunate to have the social safety net of Bangledesh. Except we won’t an extended family structure to fall back on .





Tim Murray

Quadra Island, BC

Canada

Nov.07/24

2 comments:

Andrew said...

An Australian ex pat living in New York I blatantly see I see the damage that mass unskilled-immigration is doing to the country and the wage gap. What is worrying is that in Australia there just isn't enough resources to support everyone and the destruction of the habitat of many species so we can build more damns seems ridiculous. Unfortunately even though the science is solid, as always we are in a minority.

daggett said...

Hello, from Australia, Andrew.

Thanks for your comment. If you can find the time to visit our website candobetter.org, you may find it to be of interest. Please feel encouraged to post comments and get in touch with us.

Some Australian online discussions about population and immigration are to be found here and here