Todd: High migration might trim wages … in some places, in some jobs

Valid notes of caution by the economists cited:

University of B.C. economists Craig Riddell and David Green, and Carleton University’s Christopher Worswick, caution both boosters and critics of high in-migration to temper their rhetoric.

The economists could have been referring to Immigration Minister Ahmed Hussen, who on Nov. 1 pushed up immigration levels while showcasing a prosperous newcomer family.

“Our ambitious plan,” Hussen said, “will benefit all Canadians because immigration contributes to our economic growth and keeps our country competitive in a global economy.”

The federal Liberals’ target for immigrants in 2020 is 340,000, which is a 36 per cent jump from 250,000 in 2014.

Without publicizing it, Ottawa has also sharply increased the number of temporary workers. The number of non-permanent residents in Canada last year, 891,000, was more than twice the total in 2006. 

More than 330,000 of them are international students. Another 55,000 are temporary foreign workers, while 289,000 are “international mobility” workers.

Metro Vancouver gets almost 30,000 immigrants each year, in addition to being home to 130,000 non-permanent residents, mostly international students (who also get work visas).

The economists focused on immigration rates, not necessarily temporary workers, in concluding that “increased immigration inflows have small impacts on wages and employment in the medium to long run.”

The UBC economists, however, caution that “immigration cannot be relied upon as a source of higher per capita incomes.”

In a major article in Policy Options, the three economists warn “it is important not to get distracted by individual stories of successful immigrant entrepreneurs. They certainly do exist, but that is not really relevant.”

The economists challenge the immigration minister’s claim that increasing immigration rates “will help us ease the great challenges of the coming years, such as … labour shortages linked to Canada’s aging population.”

It’s not possible to replace the aging baby-boomers, the economists say. “The results are definitive: Immigration is not a means to substantially alter Canada’s age structure and impending increase in the dependence ratio. Inflows of immigrants are just too varied in their age structure.”

Similarly, SFU’s Wu Qiyan says bringing new people to Canada’s major cities is a “double-edged sword.”

At one level, Wu said, an influx of newcomers into Toronto and Vancouver can “create less job opportunities for locals,” while raising rents and housing costs.

On the other hand, Wu said, more people “can also create more opportunities,” by increasing consumers and businesses.

UBC economist Thomas Lemieux said the question of whether more immigrants and temporary residents reduce wages is one of the most controversial in his field, particularly in light of rising nativist movements in the U.S., Europe and Quebec.

Lemieux’s own research focuses on how immigrants themselves fare in Canada’s labour market, with the general conclusion being they’re doing worse financially than in the 1990s.

Newcomers from Europe “tend to do much better” than those from India and other South Asian countries, Lemieux said, “even while there are fewer and fewer coming from Europe.”

Virtually every labour economist says the Canadian public and prospective immigrants deserve more research into, and more robust discussion of, the links among immigration, non-permanent workers, economics and wages.

With Canadian politicians making the country a unique global experiment in mass migration, few issues call out for more investigation.

via Todd: High migration might trim wages … in some places, in some jobs | Vancouver Sun