2. Immigration programmes
3. Impact of Immigration
Each country´s main objective is to design its policies so as to improve its national welfare. One of the issue is immigration policy. In this paper I want to present the immigration policies of three countries Australia, New Zealand and Canada. I want to compare their Immigration programmes, show the impact of immigration on the countries and present both positive and negative sides of immigration in relation to the country´s economy.
All three countries Australia, New Zealand and Canada are traditional immigration countries. Migration inflows have been largely influenced by the demand for labour and skills, employment or educational opportunities, as well as the political or economic situation in other countries. The immigrants flows varied over the countries in history. In Australia and New Zealand and Canada the first immigrants were from the United Kingdom and Ireland, later from all corners of Europe and Asia. Especially Continental Europe provided a major source of settlers in New Zealand and Australia throughout the 1950s and 1960s as well as a wave of Pacific Islanders who came in the 1960s and 1970s. Number of immigrants arrived from Asia (Vietnam, China, the Philipines, Hong Kong, Sri Lanka and Indonesia) in the late 80s and 90s. (Winkelmann, 1). Each group of immigrants brought its own culture and „mix“ of those influences has created the dynamic and diverse society.
Countries knew exactly what kind of people they want and that was reflected in their immigration practices. According to Granatstein, the author of the book Nation: Canada since confederation, Canada´s immigration practices „have been racist and exclusionary“ in the history. Canada had lists of prefered people to which British and white Americans belonged and were always accepted, followed by eastern Europeans. At the bottom of the list were Jews, Orientals and blacks. Garanatstein further claims that „nonpreferred immigrants were acceptable as long as they remained out of sight, risking life and limb in the mines and smelters of the West, holed up in the lumber camps deep in the forest, or packed into stuffy, unventilated sweathops in various urban centers“. (Granatstein, 337- 338)
Immigration policies allow anyone from any country in the world to apply for immigration, regardless the ethnic origin, sex or religion, however the policies are aimed at attracting highly skilled young people (but not fresh school leavers), investors and enterpreneurs. All three countries practice in reality selective immigration policy. Countries welcome migrants who will make a contribution to business sector and improve business competitiveness and therefore increase the living standard, enhancing human capital and fostering international links. Business investors and entrepreneurs are subjected to a more simple points system and more streamlined application processes. For example, New Zealand has introduced new Entrepreneur category enabling people interested in setting up a business will be able to apply for a longterm multiple re-entry visa to get their business underway. Once the business is established successfully they can qualify for residence under the Entrepreuneur category.
In most cases applicants for residence visa are subjected to point system and passmark. This immigration policy can be viewed as a formula that give points to visa applicants on the basis of various characteristics. The variable in the formula determines what kind of people will be let into the country. Australia, Canada and New Zealand have complex formulas that include applicant´s educational background, occupation, English- language proficiency and age along with family connections. All three countries require also good health, good character and no criminal record. There are catagories under which it is possible to enter New Zealand, Australia and Canada. Each category has minimum criteria which must be met. The catagories for the countries are simmilar.
There are four main categories available to migrants to New Zealand. Majority of people migrate to New Zealand under General skills category. „This is a point-based residence category in which applicants are required to show: qualification, at least two years of work experience, a high level of competence of English, ability to provide financial support and accommodation for yourself and your family“ (Migration Bureau). Less people use investor and entrepreneur category, which is designed for business people. Family category is designed for people with close relatives in New Zealand (Migration Bureau). The fourth category is humanitarian category which is discussed below.
Australia grants permanent residence visa under four main categories. Skills, Family, Business and Humanitarian. Skills has two subcategories: Skilled independent class (most popular, known as „point system“) and the Skilled Australian – sponsored class. To qualify the applicant must be under the age of 45 years, proficient in English, in an occupation on the skilled occupation list and have at least 1 year work experience. The objective is to claim enough points in points system to achieve pass-mark. Points are granted for qualifications, work experience, occupation, age, English language spouse´s skills. Points are also available, if the applicant has studied or worked in Australia, if he is fluent in the language of one of the country´s major trading partner or ethnic group, or if he has AUD 100.000 to invest in the country. Bonus points are awarded, if you have a family sponsor in Australia. Family category is for persons who can be sponsored by close relative or independent partner, spouse, child, etc.
Business category has four subcategories: Established Business class, Business owner, Investor class and Senior executive class (Migration Bureau).
Immigration to Canada is possible under three main classes. In skilled workers class conditions are qualification and at least one year work experience, occupation which is on General Occupation list or validated job offer, language ability. Moreover, applicant must meet medical, age and criminal requirements. Family class enables immigration to close family members similary as New Zealand and Australia. Business class is suitable for persons with significant financial resources who wish to invest in Canada or who wish to set up or purchase business in Canada (Canada Migration Bureau)
The fourth category for all countries is humanitarian, it is applied in exceptional cases when migrants suffer in their home country. Humanitarian category is a complex category with special requirements. It is designed for refugees, for example.
There are also policies aimed at international students, they encourage international students who graduated from local tertiary institution to stay in the country, by awarding them an extra point in points system. They are also exempt form requirement of work experience in order to qualify for residence.
Currently there are more people interested in immigration to a country than the country can take. According to New Zealand Immigration Service report from September 2001 New Zealand´s intake is 45 000 for 2001/02. Australia´s intake is 68 000 a year. Canada´s intake is about 200 000 year. However, the number of applicants for migration to Canada is 1 milion a year, for example. All three countries limit the number of the people they are prepared to take.
Impact of Immigration
There are both positive and negative impacts of immigration on the country´s economy. Immigrant workers make a positive contribution to the labor market: they fill high and low skilled positions, add to the labor supply and increase demand for goods and services. On the other hand the immigrants can be viewed as taking jobs away from the locals and taking advantage of the welfare benefits.
Following can be stated about the positive impacts of immigration: The country gains from both skilled and un-skilled immigrants. Immigrants bring knowledge, skills, new ideas, capital and abilities that natives lack. The skills that immigrants bring into the country complement those of the native population. The natives might pick up new know-how by interacting with immigrants. On the other hand un-skilled immigrants also positively affect the productivity of the native work force. According to Borjas „native-owned firms gain, because they can hire workers at lower wages, and many native consumers gain because lower labor costs lead to cheaper goods and services“. Skilled native workers, for example, have also much to gain when un-skilled workers enter the country, they can devote all their efforts to jobs that use their skills effectively while immigrants provide cheap labor for service jobs. There are companies that use un-skilled workers on the production line and they gain from the immigration of the un-skilled, who reduce the earnings of less-skilled workers in favor of increasing profits, hence the society as a whole is better off.
When migrants with higher skill level, strong English language skills, greater level of wealth come to the country, there is a gain in living standards, gain in annual consumption and higher GDP per employed person, higher employed shared of the population and higher consumption share of GDP (Winkelmann, 20). According to Winkelmann, „skilled immigrants make a greater contribution to economic activity, and hence the living standards of New Zealanders, than unskilled immigrats“. Skilled immigrants earn more than less-skilled immigrants, and as a result pay more taxes, and they are less likely to use welfare benefits. Morevover „migration raises population growth and therefore economic growth“ (Winkelmann, 34). Migrants contribute to the economy by increasing demand for goods, especially in the first year when they arrive. This leads to an increase in the demand for labour, placing upward pressure on wages. For example, migrants who form new companies will hire employees in the country creating new demand for labour. This would also place upward pressure on wages (Worswick).
Other point is that immigration has important role to solve the problem of shortage of certain workers. It is especially shortage of IT workers, for example Australia will need additional 31.500 IT experts in the next year and nearly 90.000 in coming 3 years, according to Delloite Touche Tohmatsu Australia. The greatest shortages are expected in the field of system achritects, IT strategists and database administrators. Similar shortages of IT people are in Canada and New Zealand. Local educational institutions are not able to train sufficient number of IT specialists. Immigration is the only solution to this problem.
In contrast to the positive contribution there are several negative impacts of immigration. A common concern is, for example, that new migrants will take jobs away from the local people creating greater unemployment. This fear comes especially from the Trade Unions. Immigrants increase the number of workers in the economy and create additional competition in the labor market and as a consequence the wages of native workers fall.
Another negative impact on the economy is that with the inflow of immigrants, there is an increase in government outlays on education, health and other welfare advantages.According to Borjas „increase in welfare dependency of migrants may create a substantial fiscal burden on the most-affected localities and states“.
Country immigration policies are intended to achieve a number of objectives. Every immigration policy must resolve two distinct issues: how many immigrants the country should admit, and what kinds of people they should be. Winkelmann claims that „immigration programmes are designed in a way to select immigrants with qualification and professional work experience.“ However, in order to formulate an appropriate immigration policy it is necessary to compare the costs and benefits to the country citizens of admitting migrants under each set of criteria.
There is, for instance, a simple policy that should benefit the country´s economy: more immigrants should be admit when the economy is strong and the unemployment rate is low, and cut back on immigration when the economy is weak and the unemployment rate is high.
There is an opportunity cost of admitting migrants in general. The opportunity cost of taking migrants under famil and refugee category rather than admitting migrants based solely on their skills, are the potential lower tax revenues and higher government expenditure on labour market programs since it appears that migrants admitted on their skills have higher earnings and lower unemployment rates than do other migrants. Moreover Migrants admitted under the family category and refugee category generally have less success in the labour market than those admitted on their skills. As a result migrants with no skills are rather unwanted and stricts limits are imposed on refugees. In order to reduce unwanted presure from migration to employment Australia and New Zealand have introduced the rule that it is not possible to claim social welfare benefits for the first two years after entering the country. It is only one year in New Zealand. This restriction applies to unemployment benefits as well.
Immigration relates also to the birth rate of the contry and emigration out from the country. For example, in New Zealand the number of people leaving the contry is greater than the number of newcomers at present.
Migration is closely linked to the process of globalization. Globalization requires greater mobility of people and and also enables it. Migration also reduces tension between so called rich North and poor South. These aspects must be taken into consideration in forming immigration policies.
To sum up there are both gains and losses from immigration. People who migrate to the country create jobs and business opportunities, they add to the social and cultural fabric of the countries. The immigrants moreover bring new ideas and new technology to various areas of the country´s economy as well as new skills. The familiarity with different cultures, languages and lifestyles as well as how overseas business works has helped local companies compete in the country and overseas. The relation of immigration and employment is rather complicated. On one hand there are fears that migrants worsen the situation at the labour market. It is important to keep on mind that migrants not only take jobs but also create jobs or fill vacancies that locals cannot fill. There are many aspects which need to be taken into consideration when forming immigration policies. The evidence suggests that immigration policy should encourage the entry of skilled immigrants. Australia, Canada and New Zealand have been great immigrant-receiving nations of modern times, the diverse immigration has enriched their nation.
Borjas G. J., The New Economics of Immigration, The Atlantic Monthly, volume 278, No. 5, pages 72 –80, November 1996
Granatstein S.L., Nation: Canada since confederation, third edition, McGraw-Hill Ryerson Limited, Canada 1990.
Winkelmann R., Immigration: The New Zealand Experience, IZA Discussion Paper No. 61, October 1999, University of Canterbury, Christchurch, New Zealand
Worswick Ch., The Economics of the immigration debate, University of Melbourne, Dept of Economics, www.ecom.unimelb.edu.au/ecowww/Econochat/WorswickEcon7.html, 27.9.2001
Canada Migration Bureau,Canada migration news, Issue No. 15, Winter/Spring Edition 2000, Canada Migration Bureau
Australian Department of Immigration and Multicultural Affairs, Immigration, The Facts – Information Kit, Dispelling the Myths about Immigration, http://www.immi.gov.au/package/booklet3.htm, 1.10.2001
Migration Bureau (Chilvers-Grierson, Paul D.), Migration News, 2001 edition, Migration Bureau