Keith Rankin: Procreate Or Immigrate?

Thursday, 1 March 2001, 9:36 am
Column: Keith Rankin

Procreate or Immigrate?

Keith Rankin, 1 March 2001

Just over a week ago, Opposition leader Jenny Shipley suggested that New Zealand could solve some of its problems by raising the birth rate. While her idea made a lot of sense to professional demographers, it was met with derision in the editorial and letters pages – at least in the ones I read.

We seem to have bought the idea that the problems of environmental sustainability that the world faces are a consequence not so much of our (human) choices of activities but simply of our numbers. This assumption may be very very wrong. Some of the worst environmental disasters happened many (often very many) years ago, when human populations were much smaller than they are today. But more of that later.

We have been told, for many years now, that come 2030 we will have too few people of working age to support the baby boom generation in retirement. (This "great pension debate", which came to a head with the "Peters' referendum" in 1997, continues to simmer.) The solutions we are told, are either compulsory savings, raising the age of eligibility for a public pension such as NZ Superannuation, reducing the value of pensions relative to wages, or a mixture of these.

In the 1930s and 1940s, when faced with a similar problem, the solution seemed obvious: raise the birthrate. The family friendly policies adopted were very effective. We might pause to consider what New Zealand would now be like if the birthrate of 1935 had become the norm for the 20th century. We would have less than 2 million people today. (Probably one million would be in Auckland; countries with low population densities tend to be heavily urbanised.)

The solution suggested by some today – including an NZ Herald editorial – is to raise (or at least maintain) population through immigration. Interestingly, immigration was conspicuously absent as an alternative in the great pension debate. (The failure to offer demographic solutions to the demographic problem that supposedly triggered the great pension debate suggests that other agendas were at play.)

The creditor status of the developed world as a whole means that the world's future young could support the future elderly of the developed nations without having to leave their third world homes. The rich world will this century run a balance of trade deficit with the poor world. Rich countries (with high proportions of retired persons) can be expected to consume more than they produce. The flow of profits from poor nations to rich nations – from the "south" to the "north" as those in Europe and North America see it – will fund such a trade imbalance.

New Zealand's situation is different; it is a rich debtor country. Its future working population will have to support its dependent population as well as its international creditors. The creditors will take their share first.

To do this, New Zealand will have to raise its 21st century working age population. The only alternatives will be an ongoing extension of New Zealand's already massive debt to the rest of the world or a sharp decline in living standards relative to those of other rich countries.

New Zealand is an emigrant country. So if the necessary population rise is to come from immigration alone, that immigration has to be well in excess of our high and (probably) increasing emigration rates. If our major source of immigrants is former New Zealanders and their overseas-born sons and daughters, then the social and economic consequences will be positive for New Zealand, and neutral for the world as a whole.

But what if New Zealand draws most of its immigrants in the next 50 years from developing nations?

The first thing to note is that such immigrants will typically prove to be very good New Zealanders. They will add to New Zealand's "can do" culture while adding ever more colour to our diverse society. The best immigrants are not necessarily those with the most money. (We should also note that first generation immigrants will have significantly higher birth rates than other New Zealand citizens.)

Here are five questions that we must grapple with if we are to look to immigration as the cornerstone of our population policy.

Could New Zealand compete successfully for third world migrants in a century in which translocation can be expected to reach 19th century proportions?

How will immigration affect the renegotiated Treaty of Waitangi partnership between "tau iwi" and "tangata whenua"?

What will be the impact on third world countries that cannot themselves attract migrants to replace their best and brightest?

Who will the immigrants actually be supporting?

What will be the impact of China's "one child" policy on the global market for human resources?

I can only suggest brief answers here.

Most third world emigrants will seek entry into the creditor nations that will not actually need migrants. While New Zealand will have some success competing with countries such as Brazil, Russia and China for foreign labour this century, the best educated migrants will continue to go to those countries that least need them.

Maori may come under pressure to raise their birth rates so as to maintain their present share of the New Zealand population. Alternatively, an increasing proportion of multiple-generation New Zealanders will be able to claim some (eg 1/128) Maori blood. That will be enough to maintain the numbers of tangata whenua. "Tau iwi" will eventually come to mean people who for the main arrived after 1990, or are descended from such new immigrants. While the matter may be resolved with no ethnic group becoming losers, we might just pause to note the present fate of Maduran "tau iwi" (or the Dayak equivalent) in Kalimantan, Borneo, as I write. The tangata whenua issue may be too deep to be resolved through genetic dispersion and dilution.

We must accept some responsibility for the world as a whole, and not just our own nation. That means that the richer nations of the world need to find ways to compensate the poorer nations for the losses of their most educated and productive citizens. Otherwise poor countries' education systems will collapse and those countries will lapse into poverty so severe that their populations will decline through the Malthusian triad of war, famine and disease.

We also need to take a refresher course in family economics, and the dynamics of multinational households. It will become the norm this century for families – parents, sons and daughters – to be dispersed throughout the world. That diaspora will not necessarily put an end to such families as economic units. It is an axiom of economics that consumers are "households". In practice, households (pretty much a synonym for "families") are defined by kinship and not by a common roof, let alone a common nation. While it is true that future immigrants will help support other New Zealanders through their taxes, local purchases and rents to NZ resident landlords, huge proportions of their disposable incomes will be remitted to family members outside of New Zealand. Indeed, I will go as so far as to say that the 21st century will become that of the globally dispersed family unit, and that such families will remain more coherent as economic units than will the nations which host the various family members. This is not a new story. We only have to think of the family circumstances of the Chinese immigrants to New Zealand in the 19th century.

China will have 20% of the world's population this century. Just as China's past excesses of young persons had a global impact on the world in the past, so their shortages will have a converse impact this century. China will become a nation of guest workers.

Migration will be a dominant feature of this century regardless of birthrates in the developed world. If birthrates continue to decline, worldwide, then migration will become a zero-sum game, with all the potential for global conflict that that term implies.

So why not ease the problem by raising birthrates in countries like ours to something above replacement level? The family wage of the 1950s is not the only way of reducing the opportunity cost of reproduction.

As our populations have risen, we have come to value our scarce resources more, and have increasingly used renewable human resources and inherently public resources such as 'knowledge'. Of course we still have a long way to go before we can say we are managing our national economies – let alone the global economy – in a sustainable manner.

Nevertheless our improved attitude towards our planet is to a large extent a consequence of rising population. Just as a New Zealand of 4 million people is arguably more sustainable than the alternative New Zealand of 2 million that I posited at the beginning of this commentary, so a New Zealand of 6 million may actually be more sustainable than New Zealand as it is now. Such a New Zealand – a product of natural increase plus migration from both returning New Zealanders (including returning Maori) and new New Zealanders – may just value (and therefore conserve) what we have and what we are rather more than we do today.

© 2001 Keith Rankin [keithr@pl.net] Rankin File Archive: http://pl.net/~keithr/ rfar ch2001_titles.html

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Keith Rankin

Political Economist, Scoop Columnist

Keith Rankin taught economics at Unitec in Mt Albert since 1999. An economic historian by training, his research has included an analysis of labour supply in the Great Depression of the 1930s, and has included estimates of New Zealand's GNP going back to the 1850s.

Keith believes that many of the economic issues that beguile us cannot be understood by relying on the orthodox interpretations of our social science disciplines. Keith favours a critical approach that emphasises new perspectives rather than simply opposing those practices and policies that we don't like.

Keith retired in 2020 and lives with his family in Glen Eden, Auckland.

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