Effects of Immigrants on Australia Economy - Case Study Example

EFFECTS OF IMMIGRANTS ON AUSTRALIA ECONOMY Name: Course: Tutor: Date: Abstract The economic effect of immigration has been intensively debated and studied; however, the debates are anchored on ill-informed perceptions. Immigration is a feature of the cultural, social, and economic life in many countries; however, the profile of immigrant population may vary considerably. In one aspect, it may be as a result of the variety of the source of the immigrant. It is assumed by most Australians that immigrants deny them jobs. However, there are scholars who have countered that argument by claiming that, although the immigrants add to the pool of the supply of labor, they nevertheless contribute to the economy by consuming, and therefore, create demand for goods whose production adds the demand for labors. The research proposal aim is to explore the question of what kind of contribution the immigrants make to the Australian economy. Introduction The economic effect of immigration has been intensively debated and studied; however, the debates are anchored on ill-informed perceptions. These perceptions can lead to unmitigated public antagonism against the immigrants. The negative perceptions risk jeopardizing genuine efforts to adopt immigration policies that would guide the demographic and economic challenges that face many economies. Immigration is viewed as a feature of the cultural, social, and economic life in many countries, however, the profile of immigrant population may vary considerably. In one aspect, it may be as a result of the variety of the source of the immigrants. For instance, in Europe, the people enjoy unrestricted movement, while in Canada, Australia, and New Zealand, managed immigration labor plays a significant role in the development of the economy. In these countries, the immigrant population sources also features family as well as humanitarian immigration. Regardless its source, immigration has significant impacts on the host societies. These impacts often are controversial including the economic impact of immigration. In order to understand whether immigrants are a burden or benefit to the host country, it is helpful to assess the impact through the lens of the labor market, economic growth, and the public purse (The Commonwealth of Australia, 2006). Nevertheless, in the recent past, a new wave of opposition to immigrants has instigated a debate on whether should continue to encourage immigrants entry into the country considering their effects on the labor market. It is assumed by most Australians that immigrants deny them jobs. However, there are scholars who have countered that argument by claiming that, although the immigrants add to the pool of the supply of labor, they nevertheless contribute to the economy by consuming, and therefore, create demand for goods whose production adds the demand for labor (OECD, 2014). The research proposal seeks to find out what the impact of the immigrant population is on the Australian economy and particularly on the labor market. The purpose of the study The purpose of the study is to investigate the impact of immigrants on the Australian economy as well as the factors that influence the immigrants to settle in the country. More specifically, the research will seek to find out whether the immigrants contribute to the growth of the economy and the labor market. The investigation is a response to the increasing concerns among the people in the rise of immigrants from the Asia continent as opposed to the immigrants from Europe, particularly from the United Kingdom. The Australian population is made of second and third generations of immigrants from Britain and the country economy has been supported by the immigrants’ workforce. It is therefore of interest to find out the impact of the new sources of immigrants and the possible positive or negative effects such immigrants having on the economy. Background and Significance of the Study There has been a raging debate in Australia regarding the advantages or benefits derived from the immigration policy. There are also a sizeable number of citizens who propose that the promotion of the immigration policy is disadvantageous to the citizens of Australia since the immigrants saturate the labor market and therefore deny the Australian nationals their opportunities to engage in productive labor (Cully and Pejoski, 2012). There are some scholars who view the debate through the advantages of averaging the age of the population. They claim that immigration is seen as slowing the ageing of the population, more so, in the labor market. According to these analysts, the immigration factor has not negatively impacted on employment or the ages of low-skilled natives and neither does it increase unemployment among the Australian native workers (Cully and Pejoski, 2012). However, according to the productivity commission, the impact of the immigrants on unemployment may not have caused unemployment at a significant aggregate level, nevertheless, it does not mean that immigration cannot lead to unemployment for certain groups. The commission argues that continued immigration has the ability to worsen the labor market for those in the sectors with a high concentration of immigrant employees. Yet according to some pundits, the aggregate growth priorities are not the concerns of the citizens. What is important to them is the per capita growth. It is, therefore, argued by the opponents of immigration that the people of Australia stand to gain nothing from the immigration (Dustmann, Frattini and Glitz, 2007). The reasons advanced are that the economy is largely dependent on non-renewable resources and, therefore, a rapid increase of the population is bound to dilute the benefits from the diminishing resource that should accrue to the citizens. A study of the conflicting positions taken by scholars may enhance the understanding of the immigration question, especially during a time when the country is faced by illegal humanitarian immigrants who have forced themselves on the country. The study should also help immigration policy makers to sharpen their decisions on the admissibility of the economic immigrants. Ultimately, the study will contribute to the body of knowledge regarding the importance of building a labor force policy informed by empirical findings from research. Research Review In the labor markets, immigrants accounted for an estimated 47% increase in the United States of America workforce, and 70% in the EU in the last few decades. The immigrants often come to fill certain important niches in both growing and declining economic sectors of an economy and they contribute immensely to the flexibility of the labor-market, notably in Europe. According to Dustmann, Frattini and Glitz (2007), In regard to the economic growth, immigrants have been viewed as boosting the working-age demography since they arrive with skills that offer a significant contribution to the human capital of the host countries. As far as the public purse is concerned, immigrants contribute in taxes and other social contributions that their benefits. It has also been observed that labor immigrants have a significant and positive effect on the public coffer. However, the employment is the most significant determinant of the immigration fiscal contribution. Thus, the understanding of these impacts and effects is important for the development of policies in education and employment that should maximize the immigration benefits, particularly in seeking ways of improving the immigrants’ employment situation. Costs and Benefits One of the important questions associated with immigration concerns its cost and benefit for the receiving countries or economies. Cully (n. d ) opines that many people express the fears that immigrants have adverse effects on the labor opportunities of the host countries working population. Consequently, many people oppose the liberal migration policies, however, migrants do not always take up jobs from the host nation’s residents, rather, they have been found to contribute immensely to the economic development of many host countries like the United States of America, Europe, and Australia. Immigration has been viewed as having been an indispensable engine of demographic and economic growth in both the United States of America and Australia. In the last 19th century decades, the immigrants made substantial contribution to the economic growth of the United States of America by providing labor to the industries (Cully, 2011). However, the wave of immigration to the United States of America was halted by the restrictive laws on immigration that were introduced in 1929 (Cully, n. d ). The Immigration and Nationality Act that was enacted in 1965 saw the abolishing of the national quotas by allowing the flow of immigrants to restart, however, it is only in the last few decades that the mobility of people from all corners of the world has registered a significant increase. Often, the groups that are associated with immigration are young, educated, and motivated people on the move in search of better lives for themselves and their families (Forsyth et al., 2012). However, it should be pointed out that not all immigrants are educated or motivated. There many immigrants whose motivation is to immigrate either the United States of America to experience the American Dream or such other countries like Australia for economic reasons. Hunt (2010) makes the observation that In the United States of America, unlike Australia, the immigration laws are viewed as outdated and at worst, cumbersome and restrictive. The laws are seen as limiting immigration for economic-related reasons, not only for the highly educated such as engineers and scientist, but also for the less educated who would contribute in the construction, agriculture or personal services. The misalignment between the laws that are restrictive and economic incentives has led to the escalation of the demographic of the undocumented immigrants, often attracted by the lure of employment, but unable to obtain the necessary legal documents. According to Cully (2011), There are over 11 million people who have settled and work in the United States of America, despite the uncertainty and lack of legal protection. Over the last few decades, the research on the extent, nature, and consequences of immigration to Australia has expanded. The major contributor to the efforts is the Bureau of Immigration, Multicultural, and Population Research, often through the sponsorship of various studies on immigration issues (Cully, 2011). The enormous research studies and findings have enabled a better consensus on the many topical issues that feature in the population and immigration debate. Economic effects When assessing the immigration economic effects, it is essential to recognize that immigration has both supply and demand effects. The evaluation should also consider the economic indicators, time period, and the group that is affected. According to some researchers, there is a consensus as depicted by research that at the macroeconomic level, the immigration phenomenon has either a neutral effect or a marginal positive effect on the broader economy. At the microeconomic level, on the other hand, there are variations of the different immigrants groups. Immigration from Europe and Asia Countries In the past decades, there is a trend that has increased the tendency for some countries to produce immigrants and to encourage migration. For instance, there are people who were born in some OECD countries but living and working in other OECD countries (Hunt, 2010). Most of the countries that host a large immigrant population tend to have a significant number of expatriate populations, particularly countries such as New Zealand which has a large portion of immigrants living in Australia (Hunt, 2010). Nevertheless, Studies have shown that Australia and the United States of America more than other countries have larger immigrants’ population than that of expatriates. Throughout history, immigrants to the OECD countries normally came from a few source countries which often include neighboring countries that have established traditional flows. For instance, there is an established tradition for many people to emigrate from the United Kingdom to Australia (Hunt, 2010; Cully (2011). Cully (2011) noted that whereas the immigrants from the traditional sources to Australia have somehow eased since early 1980s, a new diversified source has emerged. Many immigrants to Australia are increasingly coming from the Asian continent, particularly from China and India. Other countries with a significant presence are Indonesia, Thailand, Pakistan, Sri Lanka, Malaysia, and Bangladesh (Commonwealth of Australia, 2006). The immigration from the new source countries may be enhanced by the feedback mechanism where the presence of migrant networks in the host country may mitigate the non-economic and economic cost of immigration. The immigrant from Asia are often driven by economic needs, however, they also contribute to the economic growth of Australia. Labor Market Effects Although there has been much debate and many studies carried out on the immigrants labor market experiences, the consensus from longitudinal studies is that the immigrants may not have much impact on the general unemployment rate, however, recent studies seem to indicate new immigrants may be experiencing above average unemployment rate (Cully, 2011). The new immigrants also face labor market disadvantage as other indicators show. Research Methodology The research will use a qualitative and quantitative research approach anchored on the phonological design. The qualitative methodology was identified because it has the ability to bring out the perception of the people while the qualitative method will present the findings from the statistical data that relate to the immigrants contribution to the economy and how widespread they are in the labor market. Although the chosen methodology may differ, they nevertheless offer the best insight into the presence and contribution to the economy. The methodology should also offer flexibility in terms of data collection techniques. The study approach will involve an extensive perusal of peer reviewed studies on the effects of immigrants to the Australian economy. The researcher will also conduct a questionnaire survey administered online to specific officials and opinion leaders on the area of immigration so as to glean the opinions of the individuals operating within the immigrants industry. Data Analysis The data will be analyzed using the SPSS. The effect of immigration to employment and wages will be measured through the comparison of both employment and wages between tow sample labor markets while relating the findings to the magnitude of the immigration. The immigrants’ economic contribution can also be arrived at by using the regression approach to statistical analysis while the co-efficiency curve will demonstrate the relations between the immigrants’ contribution to the economy and the dispersion of the labor markets. References Commonwealth of Australia. 2006. Economic Impacts of Migration and Population Growth. [Online] available at: http://www.pc.gov.au/inquiries/completed/migration-population/report/migrationandpopulation.pdf (Accessed on 28 October 2016). Dustmann, C., Frattini, T. and Glitz, A. 2007. The impact of migration: a review of the economic evidence. [Online] available at: http://www.ucl.ac.uk/~uctpb21/reports/WA_Final_Final.pdf (Accessed on 28 October 2016). OECD. 2014. Migrant policy debates. [Online] available at: https://www.oecd.org/migration/OECD%20Migration%20Policy%20Debates%20Numero%202.pdf (Accessed on 28 October 2016). Cully, M. n. d. More than additions to population: the economic and fiscal impact of immigration Hunt, J. 2010. Skilled immigrants’ contribution to innovation and entrepreneurship, in Open for Business: Migrant Entrepreneurship in OECD countries, OECD file:///C:/Users/k/Desktop/economic-fiscal-impact-of-immigration_access.pdf. Cully, M. 2011. How much of the unexpected rise in labor force participation over the past decade can be attributed to migration? Paper presented to the 40th annual conference of economists, Australian Economic Society, Canberra. https://www.dss.gov.au/sites/default/files/documents/01_2014/economic-fiscal-impact-of-immigration.pdf Forsyth, P., Dwyer, L., Seetaram, N. and King, B. 2012. Measuring the Economic Impact of Migration-Induced Tourism, Tourism Analysis,17, pp. 559–571. Cully, M. and Pejoski, L. 2012. Australia unbound? Migration, openness and Population futures’ in J. Pincus and G. Hugo (eds.): A Greater Australia: Population Policies and Governance, Committee for the Economic Development of Australia. https://www.dss.gov.au/sites/default/files/documents/01_2014/economic-fiscal-impact-of-immigration_access.pdf The Migration Council. n. d. The economic impact of migration. file:///C:/Users/k/Downloads/MCA_additional2.pdf Read More