Boris Johnson chooses wage growth over mass immigration

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UK Prime Minister Boris Johnson has rejected “uncontrolled immigration” in favour of higher wage growth for local workers:

[Boris Johnson] said there would be no going back to the “same old broken model” of low wages, growth, skills and productivity which he said had all been “enabled and assisted by uncontrolled immigration”.

“The answer to the present stresses and strains which are mainly a function of growth and economic revival is not to reach for that same old lever of uncontrolled immigration to keep wages low,” he said.

“The answer is to control immigration, to allow people of talent to come to this country but not to use immigration as an excuse for failure to invest in people, in skills and in the equipment, the facilities, the machinery they need to do their jobs,” he said.

He linked the shortage of truck drivers to a lack of investment in “basic facilities” which meant that drivers had to urinate in the bushes, putting them off the profession.

“The direction in which this country is going now, towards a high wage, high skill, high productivity, and yes, thereby low tax economy … is what the people of this country need and deserve,” he said.

“Yes it will take time and yes, it will sometimes be difficult, but that was the change that people voted for in 2016 and that was the change they voted for again powerfully in 2019.”

Bravo. Now compare the conservative Johnson Government’s stance with the Morrison Government’s in Australia, which has committed to flooding the nation with cheap migrant workers via:

  • Uncapping the number of hours international students can work while studying in Australia;
  • Giving farmers a dedicated agricultural visa so that they can more easily hire foreign workers from South East Asian Nations;
  • Giving easier access to UK working holidaymakers under the newly signed free trade agreement;
  • Adding an extra 22 occupations to the Priority Migration Skilled Occupation List, in turn giving these occupations priority processing for migration and travel exemptions; and
  • Giving ‘skilled’ visa holders and international students easier access to work rights and permanent residency.
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In announcing these reforms Liberal MP Julian Leeser declared:

 “Right across the economy we are hearing that there are real issues in relation to businesses getting the skills that they need here in Australia. During the course of COVID, we’ve lost half a million temporary visa holders. Many of those people are skilled migrants. And they are skills that just don’t exist across Australia. We need to get them back to get Australian businesses moving again…”

Recall also the Intergenerational Report’s projection that net overseas migration (NOM) will be increased to 235,000:

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By reopening the immigration floodgates, the Morrison Government is working directly against Australian workers.

Importing 180,000-200,000 migrant workers into Australia every year, as was the case pre-pandemic, will necessarily drive up labour supply and unemployment, lower worker bargaining power, and place downward pressure on Australian wages.

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It is the polar opposite of a ‘Team Australia’ approach and is sadly endorsed by both Labor and the Greens.

About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.