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The most effective tool for cutting global poverty: immigration

Christopher Joye
30 May 2011

I've argued similar points myself over the years in relation to Australia's highly jejune, xenophobic and destructive immigration debate (we are an immigrant nation, after all).

My previous predictions are playing-out right now: non-rational reductions in population growth and immigration are accentuating labour shortages, and increasing the probability of interest rate hikes.

It was refreshing, therefore, to read an outstanding analysis featured in the otherwise conservative newspaper, The Economist, on the costs and benefits of global migration. It should be required reading for both sides of politics, and those who rail against the international mobility of peoples:

“Migration creates losers as well as winners. But the gains vastly outweigh the losses, as Ian Goldin, Geoffrey Cameron and Meera Balarajan make plain in their new book, Exceptional People. If rich countries were to admit enough migrants from poor countries to expand their own labour forces by a mere three per cent, the world would be richer, according to one estimate, by $356 billion a year. Completely opening borders would add an astonishing $39 trillion over 25 years to the global economy. That is more than 500 times the amount the rich world spends on foreign aid each year. Migration is the most effective tool yet devised for reducing global poverty.

“The same worker can earn 15 times as much if he or she moves from say, Yemen to the United States. The wage gap between rich and poor countries is far wider than it was a century ago, during the great age of migration from Europe to America. And the emotional costs of leaving home, though still hefty, are much lighter than they were. A 19th-century Russian emigrant might never see or speak to his family again. A 21st-century migrant can Skype them in the taxi from the airport…

“Immigration is unpopular in rich countries because people overestimate its costs and underestimate its benefits. An influx of unskilled migrants may drag down the wages of unskilled natives, but this effect is “very small at most, and may be irrelevant”, according to a number of different studies. Migrants often create employment for natives. Indian entrepreneurs in San Francisco create new technology firms. Mexican nannies hold babies while American mothers go out to work. Migrants come when their services are wanted and stay away when they are not. Through the migrant grapevine, they know that jobs are drying up several months before government statisticians notice.”

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