Let's Discuss Austerity and Inequality, not Immigration: Or Why Does the Conservative Remain Campaign not Tell the British People What We Need to Know?

The topic dominating the 23 June EU referendum in the UK has been immigration, and it is threatening to deliver a victory for the Brexit campaign. What saddens and frustrates me is how the Brexit campaign have misled the British public over this issue in particular, and how the Conservative Remain campaign has been so lacklustre such that Britain is drifting towards Brexit.

Brexit are campaigning mainly on the basis of regaining control of Britain's borders and significantly reducing migration, and they are winning support on this issue in particular. However, they don't present the public with a credible case, once we start to look at the data. As I outlined in an earlier blog post, even if a Brexit Britain was able to reduce EU migration by a quarter and non-EU migration did not increase to fill the gap in labour supply, a very BIG IF, population growth rates would only go from 0.7% annually at present to 0.6%. There would no impact on that feeling of Britain being too full of people and unable to cope.

The current feeling among predominantly working class people, who are big supporters of Brexit, of Britain being full is actually due to the impacts of a combination of six years of austerity and steadily widening economic inequality under a neo-liberal economic policy that favours elites. Both of these issues are Made in London, not Brussels. However, the Conservative Remainers are ignoring them and delivering a weak campaign for Remain. Why?

Even as Britain's population grows and the labour force expands, the government is taking active steps to reduce investment in public infrastructure and services in the service of austerity, causing increasing competition for public resources among ordinary people. The OECD recently called for a reversal of this policy, but thus far the government has refused to veer from its flagship policy. Of course, everyone except the very rich living in Britain right now knows that there is less to go around per person, but that is the result of a deliberate policy by the current government to shrink the state and starve the country of public resources. Britain's population has grown more rapidly in the past and we coped with it at that time, why not today?

Added to this is the feeling that the cost of private resources is increasingly out of reach as the rich and professional classes (double professional income households especially) become more wealthy and the gap between them and ordinary people widens. House prices, for example, rise with affordability, pricing out those on lower incomes. Again, this is the outcome of a deliberate and planned policy Made in London to reduce taxes on the rich to encourage mobile capital to come to London. It's worked. There are lots more Russian and Chinese billionaires in London today, but these are not the immigrants that the Brexit campaigners complain about. Their naively hoped for 'trickle down economics' has not occurred as homes and a decent life are increasingly out of reach for ordinary people. This is being driven in part by structural changes in the distribution of wealth and income inequality, particularly in the Southeast of England and in London.

A crucial point once more not being made by the Remain camp is the following. The public finances are in deficit, which means that on average everyone in the UK is taking out more than they put in. But, EU migrants as a group are contributing more than they take out. Which means that British people are even more in the red than the headline figures might indicate. For example, EU migrants don't incur childhood costs as they migrate here as adults etc., they tend to depend less on welfare benefits than British people, and they tend to pay more into the system in income taxes and other contributions. So, simple arithmetic shows that British resident nationals and non-EU migrants are costing the state more than they contribute, and it is EU migrants that are keeping public finances from falling further into the red. These are the people that the Brexit camp would like to prevent coming to the UK.

Ultimately, a much more effective and just method of reducing immigration would be instead to increase investment in British people's skills to fill labour shortages in the NHS etc. and reduce reliance on people born and trained in developing countries. EU migrants are in a small minority in the NHS etc., where most migrants are from former colonies such as India, Pakistan, S Africa etc. These countries have huge public health problems of their own, and could do with not losing their investments in public health training to the UK. In addition, most EU migrants work in the private sector and have a higher rate of entrepreneurial activity than British people, meaning that many are wealth generators, and future employers of British workers.

If a Brexit government were to successfully cut EU migration, we would see UK public finances go deeper into deficit, and see government investment drop and the economy shrink. Any gains from not paying EU dues will be wiped out and then some. It is disingenuous at best, therefore, to claim that Brexit will improve public finances and we will have all this extra money to pay for the gap that withdrawal from EU funding would create. We would all be worse off, it appears, and any UK government controlled by libertarian Brexiteers would be even less inclined to welcome new migrants.

So why doesn't the Conservative Remain camp tell us this?

It's easy, really. The EU Referendum in Britain was a bad idea right from the start, especially for Prime Minister David Cameron and Chancellor of the Exchequer George Osborne, as it turns out, who are leading the Conservative Party's Remain campaign. Cameron and Osborne can't campaign against Brexit using the argument that the main reasons for ordinary people feeling squeezed in their lives is not immigration, but austerity (lack of public investment), and widening inequality (unaffordable homes and summer holidays), since they would be admitting that the central plank of their own economic policy this past six years is the root cause of the deepest rift in British society and culture since at least the 1930s.

So, the big guns of the Remain camp have been spiked and we have a lacklustre campaign from their side, and a drift towards Brexit. Indeed, if Britain does Brexit, then it will be very much Cameron's and Osborne's responsibility because they made themselves hostage to their own economic and fiscal policy.

What we need instead is an honest debate about the impacts of austerity and inequality on British life and how to solve these. The party to lead this debate is, of course, Labour; but they've got their own problems. The result is that Britain doesn't have effective leadership on the Remain side in this referendum, and that may deliver a disastrous result for our country over the long term.

International Migration: Some Lessons from New Zealand

I'm spending a fortnight in New Zealand at the invitation of Professor Natalie Jackson and the National Institute of Demographic and Economic Analysis (NIDEA) at the University of Waikato. It's been fascinating to learn about the country's demography and it's future challenges, and there are some interesting contrasts and comparisons to be made with Japan and Europe. When looking at all three, what strikes me is the degree of fit between what we think we know about a country and its people, and the underlying story that is there to be uncovered and told.

University of Waikato, New Zealand.

University of Waikato, New Zealand.

I have always thought of New Zealand as a young country, built on immigration and agriculture, and set to expand its society and economy on the basis of this foundation long into the future. Historically it is young, when we compare the history of human settlement there with Europe and Asia. Young New Zealanders are also frequent visitors to Japan and the UK on working holiday visas enjoying their year or two of OE (Overseas Experience). So the impression I had was one of a youthful country full of vitality.

By the same token, media images of Tokyo as a neon-lit crowded, noisy and bustling metropolis give the impression that Japan too is full of youthful vigour. Though I like to think that Europeans are aware that Japan is rapidly ageing and, even, that it has begun to shrink. But do Europeans know that New Zealand is also experiencing some of these phenomena - that it too is an ageing society with depopulating and declining regions?

Globally there are currently 1.6 million people being born every week, and the latest projections for world population growth indicate that there may be around 10-11 billion people alive on Earth by 2100 - the global population is currently about 7.3 billion (Hansford, 2015: 30; Worldometers, 2015). As of today, 15 January 2015, in New Zealand there are 4,559,303 people, with one person being born every 8 minutes and 34 seconds, and one person dying every 18 minutes and 16 seconds. New Zealand is growing also due to international migration, with a net gain of one new resident every 8 minutes and 21 seconds (SNZ, 2015a). Just to remind ourselves, Japan is shrinking due both to an excess of deaths over births, but also because it is currently a net exporter of people to the rest of the world, though its population is huge by comparison, at more than 127.3 million in 2013 (Statistics Bureau, 2015). Indeed, measured by population size Japan remains the 10th largest country in the world.

But New Zealand's overall growth belies some underlying demographic and economic developments which potentially indicate a more complicated future. Auckland is growing rapidly, at around 1.5 per cent per year and is expected to expand from its currently estimated 1.5 million people to nearly 2 million by 2031. This would mean an increase of about 25 per cent over the next 16 years, with Auckland comprising about two fifths of the country's population by then (SNZ, 2015b). Anecdotally, people that I have met while here wonder about the capacity of the city's infrastructure to accommodate this increase - particularly when there are other regions of the country, such as districts of Waikato, which are already experiencing ageing and anticipating the end of population growth (Cameron, Jackson and Cochrane, 2014).

My intuitive understanding is that the projections for New Zealand may be over-estimating the migration effect on population change into the future. New Zealand has traditionally received its largest share of migrants from Europe (UK and Ireland) and more recently from Northeast Asia (China), with smaller numbers from Pacific countries, South Africa and India, with around 50 per cent beginning their new lives in Auckland (Department of Labour, 2009).

In future it is possible that there will be fewer migrants, as Europe and Asia themselves age and begin to depopulate, and as levels of socio-economic development improve in Asia. The former will provide New Zealand with competition for migrants with high levels of human capital, and the latter will encourage many to forego migration and to remain in their country of origin as opportunities expand. In addition, just as large numbers of people in the early decades of migration into New Zealand settled as pastoralists and farmers in sparsely populated regions, so in future migrants may prefer to work in technical and professional occupations in the already crowded urban centres, potentially prompting a reaction against migration among urban and politically engaged residents. Consequently, there are lessons in this for New Zealand, Japan and Europe.

A black swan and chick on the shore of Lake Taupo, New Zealand.

A black swan and chick on the shore of Lake Taupo, New Zealand.

New Zealand has long been a desirable destination for migrants, and justifiably so. With a clean and attractive natural environment, low population density, a highly developed knowledge economy, friendly people and a pleasant climate, it has many attributes. But, as the rest of the developed world also ages and shrinks, will migrants continue to come to New Zealand if immigration policies change and economic opportunities expand elsewhere? If the majority of migrants continue to settle in Auckland and the country's other major cities, what prospects await those more rural and peripheral regions which are currently experiencing low fertility and ageing and which will not expect to be replenished with international migrants in significant numbers?

Just as the 20th century was different from the 19th, so the 21st century may differ substantially from what preceded. In terms of population change, I have a hunch that past patterns of international migration may not be a very accurate good guide to the future. So, what might New Zealand, Japan and Europe expect?

  • A slowdown in the total number of migrants from traditional sending countries.
  • Fiercer international competition for migrants with high levels of human capital.
  • Increasing numbers of migrants from South Asia and Africa with lower levels of human capital.
  • Fewer migrants seeking settlement in ageing and depopulating agricultural regions.

In my next post, hopefully next week, I'll discuss ageing, depopulation and migration in New Zealand in a bit more detail, once I've visited a couple of rural areas and learnt more from academics and local people. I'll also have some more photos to post.

References

Cameron, M.P., Jackson, N. and Cochrane, W. (2014) Baseline and Stochastic Population Projections for the Territorial Authorities of the Waikato Region for the Period 2013-2063, National Institute of Demographic and Economic Analysis, University of Waikato.
Department of Labour (2009) Demographic Characteristics of Permanent Migrants, Ministry of Business, Innovation and Employment Website, Accessed: 15 January 2015.
Hansford, D. (2015) Full to Brimming, New Zealand Geographic, 131: 30-32.
SNZ (2015) Population Clock, Statistics New Zealand Website, Accessed: 15 January 2015, 12.45pm.
SNZ (2015b) Population, Statistics New Zealand Website, Accessed: 15 January 2015.
Worldometers (2015) World Population Clock, Worldometers Website, Accessed: 15 January 2015.

Should Japan Increase Immigration to Arrest Depopulation?

Every time I give a public lecture which features Japan's 21st century demographic structure someone inevitably asks whether immigration could be a 'solution' to Japan's depopulation 'problem'. I put those words in quote marks for emphasis because I don't necessarily think that depopulation is a problem requiring a solution; at least not in the conventional sense of the solution being to arrest decline. Anyway, here's why I think Japan might not increase immigration as a means of stabilising population numbers.

I am a firm advocate of analysis being based on sound evidence rather than instinct. This is particularly when we address potentially contentious issues such as international migration. With this in mind, we should ask how the data on past and current international migration and population change in Japan inform us about the potential for immigration to 'solve' Japan's depopulation 'problem', then ask how many people would be needed, and finally think about the realistic possibility of an expanded immigration policy being successful.

What do the data tell us?

Current data show that net international migration to Japan is declining from a peak of over 100,000 persons per year in 1990-94 (Figure 1). For the three year period 2010-12, net migration turned negative for the first time since 1975-79, with 181,000 Japanese leaving and 23,000 non-Japanese entering Japan. But this masks some annual volatility. In 2011 56,000 non-Japanese left, while in 2012 77,000 entered, most probably as a result of the impact of the Fukushima nuclear disaster - the high figure for entry in 2012 would likely have included returnees who had left in 2011 due to radiation fears, for example. Significantly, the number of Japanese leaving has been increasing since the 1990s, with more than 300,000 leaving in 2005-09, 25,000 leaving in 2010, 73,000 in 2011, and 82,000 in 2012, more than cancelling out of the gains from non-Japanese entering the country since 2005. Currently, therefore, Japan is a net exporter of people; not a good position to be in if depopulation is viewed as a problem.

Figure 1. Net international migration in Japan. Source: MIC Statistics Bureau (2014).

Screenshot 2015-01-04 19.57.20.png

Combining migration data with figures for natural population change (births and deaths), the impact of migration on overall population change has been small (Figure 2). In the future, as the natural population decrease accelerates with the widening of the gap between the number of births and deaths, so the relative significance of international migration will decrease unless larger numbers of non-Japanese enter and the number of Japanese leaving the country is reduced substantially (or even reversed).

Figure 2. Population Change in Japan. Source: MIC Statistics Bureau (2014).

Pop change

How many migrants would Japan need?

In order to know how many migrants Japan would need we need to understand the terms of the question. Helpfully, but some time ago now, the UN Population Division produced a report whose title asked: Replacement Migration: Is it a Solution to Declining and Ageing Populations? (UNPD, 2001). I have taken the liberty of reproducing the top half of the table for Japan (UNPD, 2001: 55). Scenario III, where the population remains constant at 127 million, would require net inward migration of 17 million people through to 2050, or about 340,000 persons per year starting from 2000. Scenario IV, which is based on a constant working age population, would require net migration of 33.5 million people, or about 660,000 persons per year. Scenarios V and VI are more extreme and unrealistic.

Figure 3. UNPD Scenarios for Migration Effects on Population Change. Source: UNPD (2001).

Given these figures begin in 2000, and we are now in 2015, then the numbers required annually would be greater than the UN figures project, because Japan's net inward migration amounted to just 109,000 persons over the thirteen years of 2000-12. If Japan were to achieve Scenario III on time, then it would need to immigrate at least 459,000 people per year till 2050, and the age-based support ratio would fall to one working person supporting him or herself plus one other. The actual support ratio would be more serious than this, because of the numbers of 15-64 year olds not working, those in full time education and informal care roles, and those not paying their share of contributions.

One issue to note is that the UNPD assumes a slower population fall to 2050 than Japanese government projections. The UNPD anticipates that Japan will have approximately 105 million people in 2050 with no immigration, while the Japanese government projects around 88 million because its assumptions on future fertility are more pessimistic (NIPSSR, 2014). So far the latter's projections have proved to be more accurate. Consequently, my best conservative guesstimate projects that by 2050, if the numbers of Japanese leaving is taken into account and Japanese government projections prove to be accurate, the country would need to immigrate potentially up to 900,000 persons per year starting in 2015 to achieve Scenario III of a constant population with a deteriorating support ratio.

Even if Japan Increases Immigration ...

There are reasons to suggest that immigration would not solve the depopulation problem, even if the required numbers could be found. Here's why.

Depopulation is not geographically uniform, but has different causes and outcomes region by region, indeed community by community. It is a complex process that involves demographic, economic, social, cultural, and political processes that aggregate and correlate recursively out of low fertility and out-migration, ageing and, eventually, a fall in the numbers of people (Matanle et al, 2011). Depopulating areas tend to be economically less attractive for potential in-migrants due to fewer and poorer employment opportunities. Depopulating areas are geographically more peripheral, distant from major transportation nodes or with comparatively inhospitable terrain and climate, and are less likely to be chosen by migrants for settlement.

Critical for considering immigration is the perspective of the sending countries, something which is often overlooked by people from developed countries. Where would 900,000 people per year come from? Presumably China, which itself has a below replacement fertility rate, would not wish to lose millions of people with economic and biological reproductive potential. Moreover, as countries such as China and Indonesia develop their own economic and social systems to something approaching Japanese levels of comfort there will be progressively less desire on the part of entrepreneurial Chinese and Indonesians to move to Japan, when opportunities at home are expanding. There will always be some people wanting to make a move, to have an adventure, but Japan is competing with a lot of countries for high quality human capital, and in the coming decades there will be many more depopulating countries in Asia and Europe. Will Japan be the destination of choice for the best and brightest? Perhaps, but perhaps not.

Finally, international migrants tend to originate in low resource consumption countries, or at least countries with lower per capita resource consumption than Japan. Moving large numbers of people from a biocapacity creditor country, such as Indonesia, to Japan, which is a heavy biocapacity debtor, would exacerbate current environmental problems because the migrants would tend to adopt the consumption habits of their new residence. Japan's consumption levels are seven times the level necessary to maintain environmental sustainability (Global Footprint Network, 2014). Simply put, international migration is environmentally destructive and makes a sustainable human presence on Earth more difficult to achieve; and Japan doesn't have a lot of wiggle room on this issue (USEAI, 2013).

Wrap Up

At this point we need to remind ourselves that currently Japan is a net exporter of people. Moving from that position to absorbing around 900,000 people per year from other countries is probably politically impossible for Japanese society in its present state. The very best that immigration could do, if depopulation is considered a problem requiring the solution of more people, is to provide a softer landing than otherwise might be the case. However, we also know that there are considerable societal and environmental problems associated with this course.

In sum, my analysis points to Japan not going down the immigration path. The numbers required for population stability are too large, and it is questionable whether migrants would settle in the regions that need them most. Finally, international migration won't on its own help us to solve the real problem facing Japan and the rest of the world, which is environmental, and might make it worse. Indeed, I question whether depopulation is a 'problem' at all. Rather, I think it might prove to be an opportunity.

References

Global Footprint Network (2014) World Footprint: Do We Fit on the Planet?Global Footprint Network Website, Accessed: 1 January 2015.

Matanle, P., Rausch, A.S., with the Shrinking Regions Research Group (2011) Japan's Shrinking Regions in the 21st Century: Contemporary Responses to Depopulation and Socioeconomic Decline, Amherst, NY: Cambria Press.

MIC Statistics Bureau (2014) Japan Statistical Yearbook 2015, Ministry of Internal Affairs and Communications Statistics Bureau Website, Accessed: 30 December 2014.

NIPSSR (2014) 将来推計人口・世帯数 (Population and Household Statistics Projections), National Institute of Population and Social Security Research Website, Accessed: 30 December 2014.

UNPD (2001) Replacement Migration: Is it a Solution to Declining and Ageing Populations? UN Population Division Website, Accessed: 4 January 2015.

USEAI (2013) Japan is the second largest net importer of fossil fuels in the world, United States Energy Information Agency Website, 17 November, Accessed: 4 January 2015.