Thursday, October 1, 2009

Australian Immigration's Economical Effect

Australian migration has made a big impact on the Australian economy, especially now that the country, and the whole globe is facing recession. This made us doubt if people migrating to Australia is really helping the country or not.

From the book entitled “Population, Immigration and the Australian Economy”, written by Peter J. Brain, Rhonda L. Smith and Gerard P. Schuyers, it is found out that after World War 2, Australia had relied on immigration, giving it a high importance on the government policy. This was for defense purposes, for population growth, to prevent other stronger Asian countries like Japan from conquering their land. Being the continent with a very admiring nature, they are more vulnerable of colonization. People who migrate to Australia were also viewed as contributor to economy's labor force, vital factors in economic development. In 1946, a government official said “We need population growth, through migration for reasons of defense and for the fullest expansion of our economy.”

Now the Australia government requested different institutions to study and examine the economical impact of the growing immigration rate, specifically on their population. This is after several groups protested about immigrants allegedly causing disturbance on the environment and being the cause of outgrowing unemployment among the natives of the country. Due to global economic struggle, immigration became a problem, or the cause of the problem in Australia.

But as a response, the Productivity Commission stated that Australian migration positively affects the social and economical aspects of the country.  Increasing the skilled migration increases Australia's future per capita income levels. From Commissioner Judith Sloan, Australia migration is focused more on skilled migration because it contributes generally in improving the labor market. To assess the effect of skilled migration, modeling was conducted to estimate the economic impact of a simulated increase in skilled migration of about 50 per cent on the level in 2004-05.

By 2024-25, the increase in income per capita, on average, is projected to be about $400 (or about 0.7 per cent), compared with a base case scenario. Commissioner Sloan said 'in an exercise like this, many assumptions are required and not all of the potentially important aspects can be quantified. However, the results are consistent with studies in other countries as well as previous studies in Australia, and provide guides to the likely economic effects.'

'Migration contributes to the economy in many ways. As well as the upskilling of the workforce, economies of scale and the development of new export markets would further add to its benefit on the economy. Environmental issues associated with a larger population would need to be managed, however.', Commissioner Sloan added.

An economist and a journalist also insisted that skilled workers add more to the economy, plus, companies pay lower wages compared to what the natives get for working. He also added that even though immigration is a call for increase in labor, stealing what was meant for original Australians, they also add demand for labor and product for becoming another consumer.

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