NZIER economists say we need to build a home-grown workforce that is fit for purpose rather than focusing on short-term objectives that might lead to pressure to bring in migrants quickly

NZIER economists say we need to build a home-grown workforce that is fit for purpose rather than focusing on short-term objectives that might lead to pressure to bring in migrants quickly

The closure of borders due to the Covid-19 pandemic gives New Zealand a chance to look more closely at what we want migration to achieve and provides the opportunity for a reset, according to economists at the NZ Institute of Economic Research.

In an 'Insight' publication NZIER Principal Economist Peter Wilson and NZIER Associate Julie Fry said the country should  "be alive" to nostalgia preventing a thorough immigration policy review.

"We should not uncritically accept that pre-Covid-19 times were the good old days and reset to the last known safe point. We need to build a home-grown workforce that is fit-for-purpose, rather than focusing on short-term objectives that might lead to pressure to bring in migrants quickly."

They said recovery from the "inevitable reduction" in output due to the Covid-19 lockdown and capitalising on New Zealand’s enhanced reputation as a well-governed and safe place to live, work and visit are important short-term considerations.

"But over time, migration policy has focused too much on providing short-term fixes rather than exploring long-term solutions. Our aim should be to have a sustainable wellbeing-maximising migration policy in place once the border is fully open."

Wilson and Fry said wellbeing-focused immigration considers the wellbeing of both migrants and locals.

"But New Zealand’s pre-Covid-19 immigration policy settings have evolved in ways that gave priority to the short-term GDP boost from migration, with too little emphasis on the medium-term wellbeing costs. By providing ongoing increases in the numbers of Working Holiday and Essential Skills visas, combined with lowering of the skills thresholds for general skilled migration, policymakers have prioritised importing labour over finding domestic cures to skill and labour shortages." 

As the country returned to safe international travel, rather than immediately looking for workers from abroad, "we can train locals, raise productivity and wages, and explore more capital-intensive production processes", the economists say. 

"We should consider the people and skills we want to welcome when the migration tap is turned back on. A policy focused on wellbeing implies some subtle, but significant differences to a policy aimed at increasing GDP."

The economists say that very large increases in grants of Working Holiday visas and Student visas with unconstrained work rights have occurred without any meaningful assessment of their impacts on locals, particularly those who are still developing skills.

"Across all these areas, the absolute number of visas granted, their conditions, and any thresholds for skills or investment should be revisited, and their wellbeing impacts assessed." 

Opening the border again with a wellbeing-enhancing migration system would both help us recover as quickly as possible from the large economic shock caused by the virus and build better lives for New Zealanders from now on, Wilson and Fry said.

"Little good has come from Covid-19. Resetting immigration policy provides an opportunity to improve policy before we take down the ‘no entry’ sign. We should seize it."

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

34 Comments

18
up

Well written, and not only 'those who are still developing skills.'

"...very large increases in grants of Working Holiday visas and Student visas with unconstrained work rights have occurred without any meaningful assessment of their impacts on locals, particularly those who are still developing skills."

Societies are composed of peoples of all manner of ability. Not everyone is born to be or can be trained to be a technology engineer. Some of us need jobs of a lesser skill set to go into, and those jobs are just as important to our economy as any other.

Just need a complete stop on some of these. Most big jobs go to Poms. Need to give locals a chance to develop and get the experience. Just because you have worked in a bigger economy doesnt make you better. Same issue with Auckland Council and Transport. Full of Poms and they are turning is into London minus the public transport infrastructure. City is completely gridlocked.

I can assure you that any leadership group in any public sector organisation on the hop to explain a massive failure will include significant portions of former British public servants.

30
up

FFS. How many of us have been screamed down for the last xx years when pointed that madness of our immigration settings. Dare to mention we have a problem and you’re branded a racist short sighted gloomster.

nzier ‘specialists in providing advice but only when it feels safe to do so’.

12
up

NZ was the land of milk and honey, until we decided to squander it. We get what we deserve

22
up

I hear you, having been one of those making this sort of point for many years.
However, they expressed it well.
Labour should be the party that delivers on this, given their wellbeing focus, however they have shown they cannot deliver on their policy rhetoric. Basically, they are phonies.

14
up

There no way that National would do any thing about immigration other than to fling the doors wide open again as they did before. It's actually part of their current policy to encourage immigration and to attract a cheap workforce so you can get an easy visas for cash, which ever you prefer.

10
up

Yes. Labour are the lesser of two evils.

10
up

Yes, sadly National cannot see past immigration as a solution to the economy and they buy into the nonsense that is the "education" sector and tourism (where it is hard to meet any Kiwi staff) - nothing more than a speedy way to get to get a visa which is then rolled over until permanent residency is granted meanwhile at least 2-3 generations ago we killed off the apprenticeship system (not fashionable we were all going to be techos) and condemned our own young people who did not see themselves at polytech or uni to (particularity young men) to a life of dispossession and unemployment. Meanwhile we bring in "skilled" people from overseas without any evidence they have met the same training and education standards we expect our own to have.

definitely time we stamped out the exploitation of migrants,using them as indentured labour on farms and orchards.sucking them in with the promise of residency .

Prof Christina Stringer detailed the widespread exploitation of immigrant workers in 2016. She said it was how 'widespread' it was that most surprised her. One Herald headline about her report back in Dec 2016 said it all: "No Sex, No Visa" - that was reported by a 30 year old female Indian. I remain stunned by the way this problem of exploitation has been ignored by our politicians and the media.
Liberal economists such as Daly and Krugmann have stated large scale low wage immigration is bad for the low paid natives. You don't need to be an internationally famous economist - it is just common sense.
My history reading shows societies contentedly tolerated slavery so long as it was good for the economy. Times don't change.

13
up

Agree should plan ahead and go for reset - long term plaining.

Defintely No Rock Star Economy as John Key / National Party had adopted.

No left party or right party but government doing what is good for Kiwi in the long run and can be a combination of left, right and centre :)

If Labour manages to take out the next election outright or with Greens only as minor party support. Then expect a blanket amnesty for all existing Work Permit holders in New Zealand to be given a pathway to residency. Because COVID, because kindness, because yada yada. By the time of the following election in another 3 years, Labour would have 200,000 plus more votes in the bag in perpetuity.

Many immigrants are not natural Labour supporters. Immigrants have a low voter turnout. Most immigrants I meet have just the same attitude I have myself - happy to have got in so now lets list the drawbridge. It is not an immigration issue; it is a high numbers issue. Whoever proposes a rational immigration policy and looks as if they will stick to it will elections.

17
up

12 years too late. Damage has been done.

Shamubeel Eaqub was at NZIER for many years and always got his knickers in a twist when people suggested that we might want to reset our migration settings.

Gee, I wonder why??

In every piece written by Eaqub that I've read he has been the one calling for a national discussion on our immigration policy rather than assuming there is a broad consensus in favour of it. He discusses the pressures on infrastructure and regional inequality, and also the skills gaps we have domestically. Not sure what you've been reading bud.

Maybe in more recent times he's got more mature, less emotional and more objective.
But don't you remember his sensitivity back in the day to any critical suggestions re: immigration, and his infamous 'F Bomb' re immigration?
I read stuff pre-2015, when he was at NZIER, that was very defensive of immigration.

NZ has fundamentally changed its culture over the past 30 years, stemming mainly from importing Asians after the share market crash in 1987 when things in 'Godzone' were looking pretty grim. Most won't remember this moment but it is true. Since then over 400,000 Asians have made NZ their home, infiltrated by the CCP's watchers, to report back to Beijing of course. We (NZ Inc) were essentially broke earlier that decade after Muldoonism & with Douglas & co's arrival they really changed things up, and in hindsight, they really had no choice but to do so. You might argue that our immigration policy from that point was a success, looking back at it from today, but that still doesn't change the fact that NZ's culture has been forever altered over the past 30 years, probably a bit like the 1800's must have felt like to the Maori.
As they say, there's no going back now. What's done is done. Will their be more from Hong Kong coming to live here? Probably yes. If the CCP let's them out, of course, & even if they do, they'll probably try to strip them of their wealth before they leave. It's a messy ol' world isn't it?

We won't be able to have a sensible debate on immigration until we have had a sensible debate on how the benefits system affects the supply of labour by locals.

Locals just aren't interested in doing the jobs that immigrants do. Many people struggle to get by on benefits, but it's not a problem for young people. Besides, why would anyone want to employ a torpid, dopehead when they can employ a cheerful, hard-working, law abiding Phillippino?

How are the nation's and individuals' wellbeing interests served when it is possible for Shane Jones's nephs, and the many others like them, to spend their time on the couch, instead of training and working?

Stop encouraging youth into university to get degrees with no potential. More apprenticeships or straight into the workforce and learn to survive and thrive.

oooraah!! mlpc "why would anyone want to employ a torpid, dopehead when they can employ a cheerful, hard-working, law abiding Filipino?". Finally someone bold enough to to actually outline and expose one of the biggest drags on NZ Inc. - a dysfunctional welfare system. All this talk of "wellbeing" as exactly that - talk. What exactly IS the measure of Wellbeing anyway.. and from whose perspective? Remember when Sue Bradford started the Unemployed Workers Union? She rode that all the way to Parliament but didn't do jot for her "members"

"why would anyone want to employ a torpid, dopehead when they can employ a cheerful, hard-working, law abiding Filipino?" - apply the idea to your family: your kids are dumb or ugly so why not adopt an adorable orphan and then you can ignore the disappointing children you had in the conventional way.

Personal experience - I live in one of the Auckland suburbs where the majority of residents are white middle-class. When the local supermarket (one of the mainstream ones) opened up a few years ago, there was an outcry when people noticed the staffers were primarily Indians. Some people even wrote to the store manager saying they wanted "our kids" to be working in there. Ironically, the supermarket had some tough times to recruit local youth to work for them. Young people were either not interested in working in a supermarket, or were lack of necessary customer services skills. At the time, I was a board member of the local community trust, and we ran a series of sessions with the supermarket to convince young people to work and train them. Eventually, the supermarket managed to secure enough local youth to work at the checkout. Meanwhile, they still have those Indian staffers in the back doing stocktake and Deli etc.

I'll wager not a single one of those "concerned citizens" booted their overcoddled offspring off the couch and down to the supermarket to apply for jobs that were considered "beneath them", but they have the temerity to complain about others who seized whatever opportunity they can find.

That's very sad and pathetic - this is whole debate is not about pilloring (spelling ?) people here, born or imported, but it is about why a country (we are not unique) prefers to bring people in as substitutes for getting the locals motivated. We are now apparently even bringing in abattoir workers as we no longer have the skills to chop up a beast !!! Remember all the freezing workers laid off in 1980s (?) when all the works were closing. Skills lost and never locally recovered. No training now (probably need to go to uni first and get a $40,000 student loan).

You see this in the UK all the time... hence why Brexit. It's a competitive world out there and people just forget that, get complacent and think the world owes them. When it doesn't.

Also we need a reset on our handing out of permanent residency without the requirements in other countries that the P.R. actually needs to be in or come back to NZ on a regular basis - only NZ says: have P.R., then go elsewhere for as long as you like, pay no tax here, and bolt back to NZ when you need medical, education, social welfare etc ....

And they can vote without citizenship

""The economists say that very large increases in grants of Working Holiday visas and Student visas with unconstrained work rights have occurred without any meaningful assessment of their impacts on locals, particularly those who are still developing skills.""
Other countries realise that where an area of employment is majority immigrant then there is a problem to be addressed. For example if most carers in rest homes were born abroad in a poorer country (eg Phillipines) then wages are too low and conditions too poor.

I keep saying time and time again, we need to move away from low productivity exports like tourism, primary industries and become competitive & increase productivity by investing in innovation (tech). This makes us more attractive to high quality migrants and also increases GDP way more (also not being dependent on mother nature factors etc)

Navi Ravikant (EHF fellow and tech millionaire) illustrates this well.

https://www.youtube.com/watch?v=3Sd_PQoR7OI

I'm a millennial obviously. *Work smarter not harder*.

It takes time to develop skills , and besides , a lot of you people here do not want to go into the trades

I noted a couple of mornings ago that employers of temporary work visa immigrants were screaming out that they could not afford the extra 25% pay increase to $25/hour that the government was requiring so that there "essential" workers could remain.
This means that previously these "essential" workers were being paid $20 per hour or less. This totally illustrates that the only essential quality that these workers had, was that they were/are prepared to accept any work conditions that employers throw at them for the minimum wage. It is long past the point that the employers of cheap immigrant workers were made to step up and pay a decent wage that will encourage normal kiwis to work for them, not just temporary visa holders who will accept anything, just to get their foot in the door leading to permanent residency.
The ongoing affect of this minimum wage economy is that it undermines the value of labor and removes the motivation for employers to increase the productivity of their business. It is only by increasing our productivity that we will increase our real wealth and well being. If employers cannot compete in a more realistic wage market we are better off without them so that their staff and the nations assets can be utilized more profitably.