By Peter Boyle
If recent polls are to be believed, a majority of Australians are in favour stopping immigration at least in the short term. According to a November 2-3 AGB-McNair poll, 62% are in favour of a "short term freeze", and a Bulletin Morgan poll of October 22-23 found 66% in favour of "stopping immigration in the short term". While neither poll sought out the reasons for this anti-immigration sentiment, studies of earlier polls suggest that the main reason is a fear that immigration might be causing, or at least exacerbating, unemployment.
Widespread as this belief may be, it is totally false. Immigration is not causing the current high levels of unemployment (see Figure 1), nor making it worse. Indeed, economic studies indicate that cutting immigration now may actually worsen unemployment.
However, it is a fact that unemployment has grown dramatically in Australia (and all other industrialised countries) since the 1970s. With each recession since then unemployment has shot up to new highs. During the last recession (1990-92) it passed the 10% mark. Even more disturbingly, with the "recoveries" following each recession, the unemployment rate refused to fall back by as much as it had previously risen. Thus today, well into the current "recovery", the unemployment rate is still 8.8%.
And as unemployment has ratchetted up so has the anti-immigration sentiment.
In the 1960s, polls showed that less than 20% of Australians believed that immigration was too high. In the 1970s, when unemployment began to rise, the polls showed that figure rise to 40-45%. In the 1980s, it was up to 50-60% and this has obviously increased recently (see Figure 2). Yet over the same period, immigration (as a percentage of the population) was declining from a high in the late 1940s (see Figure 1).
In addition, several detailed econometric studies by the (now dissolved) federal Bureau of Immigration, Multicultural and Population Research and individual academics have established that immigration has a positive impact on the economy.
These studies explained that immigrants contributed to both demand and supply in the economy. They contribute to demand because they need housing, clothing, food and other goods and services to establish themselves in a new country. The studies estimate that, on average, an immigrant family creates, through adding to demand, four new jobs over the first four years of their life here.
On the supply side immigrants contribute their labour and any savings and assets they bring with them. Obviously, richer immigrants have more assets, but even this is dwarfed by immigrants' contribution through their labour. In this sense they "take" jobs, but the report says that, on balance, they create more jobs than they take. Thus, cutting immigration today would actually increase the unemployment rate slightly.
However anti-immigration lobbies point to the higher unemployment rates suffered by recent immigrants, especially those from non-English speaking backgrounds and refugees from wars or countries in severe economic crisis, as "proof" that cutting immigration can reduce unemployment.
Superficially, this argument appears to make sense, but it doesn't. Unemployed immigrants add to demand and create jobs (for others), even if they come with few assets and require social security support — which they may be denied under new discriminatory laws which ban most immigrants from receiving social security payments for their first two years in Australia. The studies found that, on the whole, the initial cost to government from immigration (for social security, health and other services) is more than repaid in taxes collected from immigrants. Indeed, Australian governments "save" by escaping the cost of bringing up and educating immigrants who arrive as adults.
Coalition government cuts to the social security entitlements of recent immigrants and to special migrant education programs only worsen the plight of some of the main victims of unemployment. The cuts prolong their unemployment while giving credibility to the myth that immigration causes unemployment. The previous Labor government also encouraged anti-immigration sentiments by cutting immigration quotas, attacking the rights of refugees and reducing the rights of recent migrants.
So if immigration is not the cause of growing unemployment what is? This is the question that Coalition and Labor politicians, and the corporate rich and their lackeys who run their media machines, are keen to avoid because the unemployment spiral is a direct result of a structural crisis of the capitalist system which they defend. This is why they are now trying to dampen the controversy sparked by the racist diatribes of Pauline Hanson with a flood of hypocritical, bi-partisan appeals for "tolerance".
While corporate profits rose to dizzying heights in the 1980s the public faced rising unemployment, growing inequality, declining working conditions and fast-eroding social services. They were introduced to the novel experience of "jobless growth". Hanson's racist attacks on Aborigines and Asian migrants offer simplistic but false explanations of and solutions to these problems.
For a while it suited the Howard government to encourage Hanson's campaign. After all, he had campaigned loudly against Asian immigration back in 1988 when he was opposition leader. But when the latest racist campaign got going seriously it began to threaten the profits of Australian capitalists, especially those trading lucratively in Asia and those involved in the tourism industry.
Now they want to put the racist genie back in the bottle, but they are having a hard time explaining to the public what really is causing growing unemployment.
The Howard government's "solution" to unemployment is implicit in its policies, but hard to popularise. It (and most big capitalists) believe that wages in Australia are too high, even after a decade of restraint under Labor's Accord. So their "solution" is to cut wages and conditions through attacks on workers' rights, making it cheaper for capitalists to employ more workers.
But the Howard government is also busy getting rid of thousands of public service jobs and will destroy tens of thousands more as it proceeds with its privatisation program. Given all this, it dare not promise to reduce unemployment to below 8% by the end of the decade. (By then the chances are the economy will be entering recession again and unemployment will be heading in the opposite direction).
Labor's "solution" — bravely offered from the safety of the opposition benches — is to stimulate the capitalist economy by increasing government spending. But when it was in government, Labor persisted in cutting government spending at the behest of big business.
Since the mid-1970s, big business has demanded of all governments cuts in social spending, privatisation of the most lucrative public assets, attacks on workers' rights and cuts in taxes for rich individuals and corporations. This has been a concerted attempt to solve capitalism's crisis of "overproduction" (it cannot find enough profitable and productive investment opportunities for its vast accumulated profits) by making workers shoulder the crisis through higher unemployment, lower wages and poorer conditions. Labor and Coalition governments have willingly done their bidding. The benefits of greater productivity arising from technological advances have been by and large appropriated by the capitalists and squandered on speculative and unproductive investments.
Real solutions to unemployment — such as cutting the working week without reducing pay, or creating jobs through public spending on the environment, health, education, public transport or housing — have been ruled out by Labor and Coalition politicians as "unrealistic" because they would threaten corporate profits.
Over the last decade, the Labor party has systematically pushed this limited political perspective on the trade union movement, with the help of the union bureaucracy. Their promotion of economic nationalism and the false promise of reward from sacrifice and cooperation between "Australian" businesses and workers, now bears bitter fruit in a significant following for Hanson's racist campaign against Aborigines and Asian immigrants.