Pandemic reduces migration, sky does not fall in

Political leaders often bray about the need for continued population growth to benefit “the Economy.” In Australia, Covid-19 has provided a real-world test of the impacts of reduced migration and decreased population growth. So far, those impacts appear largely positive.

by Kelvin Thomson

Population activists concerned about the damage that rapid growth is doing to our environment constantly bump up against economists and industry lobbyists who contend that population growth is necessary for the economy – in their view, the faster the better.

It has been revealing, therefore, to see the real world example of Australia as a result of the coronavirus pandemic. For the last 15 years we have had rapid population growth, driven by a migration rate amongst the highest in the world. During that period unemployment and underemployment have risen, real wages have stagnated, and housing affordability has declined. A range of other negative social and environmental impacts have been conspicuous. The economists and industry lobbyists nevertheless insist that without the growth, things would have been worse.

Enter the pandemic. Our international borders have been largely closed. We “lost” 500,000 temporary migrants. Although 500,000 Australians living overseas returned home, our net migration is now the lowest it has been in a hundred years. Our international student “industry” (Universities were once about education) has declined dramatically. If the economists and lobbyists are right, the sky should be falling in right about now.

An empty street in Melbourne during the pandemic. Photo: Philip Mallis

Certainly the pandemic had a negative impact on employment and the economy. Parts of the country, Victoria in particular, went through serious lockdowns. There were many restrictions on all kinds of economic activity. The Federal and State Governments put in stimulus and job protecting measures to get us through the crisis without a meltdown.

But the strong measures taken both to prevent coronavirus entering Australia, and to stop it spreading in the instances when it did get in, have been successful so far. Australia has one of the lowest rates of coronavirus cases, and coronavirus deaths per million, anywhere in the world.

And with the easing of restrictions, the labour market has recovered rapidly. House prices are rising, so has the share market. Australia’s underemployment has fallen to its lowest level since 2014. The number of jobs across the Australian economy has fully recovered from COVID, rising 0.6% in the year to March. The Federal Budget is recovering more quickly than expected.

In particular, youth participation is up, running 0.9% above its March 2020 level. Young people are benefiting from the absence of competition for jobs with international students. Given the soul destroying nature of unemployment, and the mental health risks that come from it, it is very pleasing to see more young people participating in the workforce.

The other myth which the pandemic is exposing is the one about the importance of the Central Business District (CBD). For years our Property Council, other property developer interests and economists have claimed that CBDs drive the nation’s economy. CBDs are breathlessly described as “productivity powerhouses” and so on. We are told that “Thriving CBDs will be critical to Australia’s economic recovery”.

Really? Certainly the CBDs, particularly Melbourne, have taken a big hit from the pandemic. People are working from home. Foot traffic in the CBDs is a fraction of what it was. But as I pointed out above, this hasn’t mattered. Unemployment is falling, employment is rising, and consumer confidence is up. The activity is still taking place, just not in the CBD. The economic contribution of the CBD has been exaggerated, and that of the suburbs underestimated. The property industry’s campaign for Melbourne to become more like Manhattan is based on greed, not economic necessity.

The experience of the pandemic in Australia has been that you don’t need population growth to have a properly functioning economy. What you do need to do is to put public health first.

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4 thoughts on “Pandemic reduces migration, sky does not fall in

  1. Unfortunately, decreased population growth is not the same as decreased population; which is what’s actually needed in reality. Absolutely nothing in today’s human world is sustainable and that’s not going to change without a fully implemented circular economy and significantly reduced populations.

  2. Too early to assess impacts of reduced temporary residents aka international students and other temporary residents caught in the NOM, impacting population growth.

    One will be able to test some claims, later, about the impacts of ‘population growth’ e.g. reduced budget income, reduced infrastructure investment, environmental degradation due to fossil fuels, carbon emissions, industry avoiding constraints etc., or worse, used as an excuse to do nothing about introducing robust environmental regulation.

    Further, if positing that ‘population’ from ‘population growth’ through (undefined) ‘immigration’ with fertility declining everywhere below replacement rates is the problem, then what is the short term solution, now?

  3. I too am tired of hearing (a) from self-interested businesses that population growth is necessary for Australia’s wellbeing, and (b) that the size of our economy is a measure of our wellbeing. Our quality of life – good health, positive relationships, ready access to housing, schools, hospitals, rewarding jobs, green spaces, etc – should be top-of-mind for our leaders. And these goals are NOT dependent on the size of the population or size of the economy. In fact in so many ways the opposite is true. The pandemic has caused much suffering, and I feel for those who have lost family members or their jobs. But it is making us think what future we want in Australia and challenging the previous ‘wisdom’ that growth is good.

  4. Rather than ‘growth’ or ‘decline’ why is ‘stability’ not seen as the key to success. With a replacement rate of 2.1 the global human community should surely be aiming for two children borne to each adult. In the Global North with adequate health care this should mean fecundity at two births by each women, In the Global South, due to higher child mortality, the number of births per women will need to be higher until the local health care system becomes adequate.

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