Free markets means free movement of labour

In electorates such as that of Opposition spokesperson Sharman Stone, Nationals MPs Kay Hulls and John Forrest, asylum seekers are critical to economic growth. Just as the Californian agricultural sector would collapse if Latinos were not able to penetrate the porous border between the US and Mexico, many fruit- and vegetable-growing businesses in the Riverina of southern New South Wales, along the Murray in Victoria and in the Goulburn Valley around Shepparton, would also struggle to survive if it were not for the availability of an Afghan, Iraqi and now Sri Lankan labour market pool.

As western European economies have found out over the past decade, asylum seekers risking their lives on leaky boats and enduring intolerably harsh conditions in makeshift camps, are a vital ingredient in the supply of labour. The point is, as capital and goods move around the world freely in this era of globalisation, so must labour.

The most celebrated illustration of the necessity of Australia’s need for a steady flow of asylum seekers in recent years has been the Young abattoir in New South Wales. The abattoir’s owners were, in 2001, facing economic ruin because they could not get labour. They recruited 90 Afghan refugees and the abattoir is still in business. A Sydney University study, published in 2003, found that “apart from the $2.5 million added to the local economy through the employment of the asylum seekers, there’s been nearly a $2 million fiscal benefit to the national economy,” because the abattoir was able to continue processing meat.

This is not an isolated example. Rural Australia has been facing a skills shortage for many years now, and even though in economic downturns that shortage is reduced considerably, the long-term trend is pronounced. A combination of young people leaving and an ageing population ensures that the Australian agricultural sector is perennially short of labour. A recent National Farmers Federation submission says that the shortfall today is about 100,000 additional employees as the rural sector emerges from drought conditions.

But labour skills shortages are not confined to the agricultural sector. Treasury secretary Ken Henry on Wednesday said that his “view is once we get through this period of macroeconomic weakness we will get back, within not too many years, a position of close to full employment and it is quite probable that in that sort of … market there will be concerns about skills shortages,” he said.

In short, Australia has a labour market demand gap of which thousands of asylum seekers should inevitably be part of the solution. Just as businesses source capital from wherever they can in a global financial market, and goods flow relatively freely into and out of this country, so business should be able to source labour more easily.

It needs to be remembered that asylum seekers are, generally speaking, a perfect fit for the labour market. As Forrest said a few years back of the asylum seekers working in businesses in his rural electorate, they are people who are educated and motivated. Forrest’s observation makes sense. You do not risk life and limb, literally, to get to Australia without having a strong sense of wanting to create a better life for yourself and your family.

Australian governments of both persuasions have, over the past two decades, been at the forefront of advocating reducing trade barriers, and rightly so. But a natural corollary of opening your borders to product and finance, is also opening it up to the labour that creates those products. To preach border protection while at the same time arguing for lower trade barriers is intellectually inconsistent and just plain hypocritical.

16 Comments

  1. james mcdonald
    Posted Friday, 23 October 2009 at 1:39 pm | Permalink

    Great article, Greg.
    Furthermore, micromanaging the selection of those we take, beyond the obvious need to vet out criminal individuals, is a case of the government picking winners.

  2. stephen
    Posted Friday, 23 October 2009 at 2:25 pm | Permalink

    It’s the only way.

  3. Heathdon McGregor
    Posted Friday, 23 October 2009 at 4:58 pm | Permalink

    Of course the asylum seekers are a perfect fit for the free market

    They are desperate, a long way from home and unaware of local laws.

    Perfectly ready to be taken advantage of.

  4. Julius
    Posted Friday, 23 October 2009 at 5:30 pm | Permalink

    What you say seems right except that you should acknowledge that John Howard, who got into trouble with some very tentative 1980s remarks that were taken to be anti-Asian, made major changes in the direction you advocate for the labour market without frightening the horses.

    Would it not make sense for us to take more refugees but take them by way of recruiting (from those clearly displaced and seeking asylum wherever they may be) those who are likely to become regular taxpayers and thereby providing more revenue for the government out of which it could do more for refugees left behind in Africa and elsewhere?

  5. james mcdonald
    Posted Friday, 23 October 2009 at 6:32 pm | Permalink

    Very convoluted, Julius. What are you going to do, send a tax auditor to the camps along with the immigration officers? You’re still trying to pick winners.
    How about we just honour our UN agreements and let the winners pick themselves.

  6. Jillian Blackall
    Posted Friday, 23 October 2009 at 9:14 pm | Permalink

    Thanks Greg.

    Another quote to add to my facebook profile.

    ” To preach border protection while at the same time arguing for lower trade barriers is intellectually inconsistent and just plain hypocritical.”

  7. AR
    Posted Friday, 23 October 2009 at 9:18 pm | Permalink

    As the mega cities of Sydmelb continue to metastise, there are double brick, 3-4 b/r houses on 2-3 acres in most country towns for $150K and jobs, skilled & otherwise crying out to be filled.
    Once again, that damned democracy thingy - where the votes are, there the pollies throw (churned) tax money.
    Instead of subsidising megacity living, see Economics 101 for salulatory admonitions, what about charging for their true cost, water, electricity, sewage, POLICING (an up’n’coming growth industry well observed by behaviourists with rats decades ago)?

  8. Jillian Blackall
    Posted Friday, 23 October 2009 at 9:24 pm | Permalink

    AR, that sounds tempting. Escape from Sydney and go and live in a town with homes for $150K. Certainly food for thought.

  9. AR
    Posted Friday, 23 October 2009 at 9:34 pm | Permalink

    JillianB - thanks for noticing. I forgot to mention (being long past breeding) that those country towns also have excellent schools in danger of closure through lack of students, any number of vacant commercial premises going for peppercorn rents just to keep them maintained etc.
    There is an upcoming ABC Compass on just such a “come here” scheme in the central west of NSW - houses on acres for $1 pw (not a misprint - a dollar per week!!) to families with children (more the better) and hopefully a skilled, or willing to learn, adult or two.
    It’s done more for our village of <300 people than any politician in the history of the world, entirely self generated AND financed.

  10. Jillian Blackall
    Posted Friday, 23 October 2009 at 9:41 pm | Permalink

    Amazing. I will look out for the ABC compass episode.

    (I’m single with no children.)

  11. Jillian Blackall
    Posted Friday, 23 October 2009 at 9:45 pm | Permalink

    I should add my Grandma grew up in Parkes, in the central west of NSW.

  12. AR
    Posted Friday, 23 October 2009 at 9:53 pm | Permalink

    Jillian - go have a look at granny’s town. I was there a week ago, hence the reference to double brick, 3-4 b/r on 2-3 acres.
    Good houses in the town are even less (not acres, they are mostly 1/2 acre) and it is almost the epitome of a perfect environment, cool winters, dry heat summers that will grow anything (good town water), the entire town walkable, hills half an hour drive, superb amenities, i could go on & on…

  13. Jillian Blackall
    Posted Friday, 23 October 2009 at 9:58 pm | Permalink

    Thanks AR. I will definitely think about it.

  14. Julius
    Posted Saturday, 24 October 2009 at 2:28 am | Permalink

    James McDonald you can’t really mean that you find my very simple proposal convoluted unless you have some other sense for the word than its normal meaning of intricate or complicated. That it would be better for Australia to take refugees and other immigrants who can and will make themselves productive enough to be net taxpayers than to take permanent or longterm dependants on social welfare or charity is surely not open to dispute. That this would make us better able to give real help to refugees and the countries they are lodged in rather than just boasting of our generosity to a pitifully small number of the world’s displaced people also follows as the night the day.

    So, perhaps you are simply expressing a doubt, which I would share, that public servants, even or especially UN public servants are going to be good at picking the people who will be winners any better than they customarily pick business winners. But we do have systems and we do select, in fact we have points systems which test the fit for our economy of hundreds of thousands more people than we take as refugees, so it should not be beyond the wit of human beings to do better than allowing some UN employees to select non-English speaking illiterate people of recent nomadic and tribal background (to quote an Age editorial before The Age suddenly turned precious with Kevin Andrews as minister for immigration). We might even use aptitude tests, or Raven’s Progressive Matrices, the customary “culture-fair” IQ test if we can’t find people who already have some obvious skills of a practical nature easily demonstrated.

  15. james mcdonald
    Posted Saturday, 24 October 2009 at 4:20 am | Permalink

    Julius: Yes you’re right, “convoluted” was the wrong word and I apologise for my poor expression. You’ve expressed my own thought better: “public servants, even or especially UN public servants are going to be good at picking the people who will be winners any better than they customarily pick business winners.”

    We could select for job aptitude but, unlike in the Australian Public Service where the law forbids (supposedly) selecting for anything extraneous to the job criteria, it would in fact be arbitrary. I kind of like having mix-and-match neighbors, I don’t want to live in a world whose character is subject to selection by DIAC officers.

    When we select for a job, the applicant who loses remains part of the community, just not in that workplace. When we select on character or social background for immigrants, we’re engineering society. I know the government can do that effectively for employment purposes. I just don’t trust the government to stop there.

    Our control-freak insistence that “We will decide who comes to this country and the manner in which they come” has in recent years begun to turn Australia into a monoculture of middle-class consumerist yuppies, no matter if some of them look a bit different to others or speak a different language at home.

    In years past, a certain degree of laissez-faire in our migration intake ensured a constant trickle of people who may have looked a bit dorky the first time they tried to cross buy a train ticket or sign a timesheet, but who knew the difference between struggling for the best television set on the block and struggling to survive. They had a lot to teach us. My concern is not so much that they need my help, it’s that I need them.

  16. Harvey Tarvydas
    Posted Sunday, 25 October 2009 at 9:10 pm | Permalink

    Dr Harvey M Tarvydas

    Top article and an important subject to seriously sort out.

    (To preach border protection)” to carry on with pathetic dysfunctional emotionally soaked immigration concepts, “while at the same time arguing for lower trade barriers is intellectually inconsistent and just plain hypocritical.” is much worse than intellectually inconsistent and hypocritical its plain DUMB. You’re too kind Greg Barns.