NZ Herald
  • Home
  • Latest news
  • Herald NOW
  • Video
  • New Zealand
  • Sport
  • World
  • Business
  • Entertainment
  • Podcasts
  • Quizzes
  • Opinion
  • Lifestyle
  • Travel
  • Viva
  • Weather

Subscriptions

  • Herald Premium
  • Viva Premium
  • The Listener
  • BusinessDesk

Sections

  • Latest news
  • New Zealand
    • All New Zealand
    • Crime
    • Politics
    • Education
    • Open Justice
    • Scam Update
  • Herald NOW
  • On The Up
  • World
    • All World
    • Australia
    • Asia
    • UK
    • United States
    • Middle East
    • Europe
    • Pacific
  • Business
    • All Business
    • MarketsSharesCurrencyCommoditiesStock TakesCrypto
    • Markets with Madison
    • Media Insider
    • Business analysis
    • Personal financeKiwiSaverInterest ratesTaxInvestment
    • EconomyInflationGDPOfficial cash rateEmployment
    • Small business
    • Business reportsMood of the BoardroomProject AucklandSustainable business and financeCapital markets reportAgribusiness reportInfrastructure reportDynamic business
    • Deloitte Top 200 Awards
    • CompaniesAged CareAgribusinessAirlinesBanking and financeConstructionEnergyFreight and logisticsHealthcareManufacturingMedia and MarketingRetailTelecommunicationsTourism
  • Opinion
    • All Opinion
    • Analysis
    • Editorials
    • Business analysis
    • Premium opinion
    • Letters to the editor
  • Politics
  • Sport
    • All Sport
    • OlympicsParalympics
    • RugbySuper RugbyNPCAll BlacksBlack FernsRugby sevensSchool rugby
    • CricketBlack CapsWhite Ferns
    • Racing
    • NetballSilver Ferns
    • LeagueWarriorsNRL
    • FootballWellington PhoenixAuckland FCAll WhitesFootball FernsEnglish Premier League
    • GolfNZ Open
    • MotorsportFormula 1
    • Boxing
    • UFC
    • BasketballNBABreakersTall BlacksTall Ferns
    • Tennis
    • Cycling
    • Athletics
    • SailingAmerica's CupSailGP
    • Rowing
  • Lifestyle
    • All Lifestyle
    • Viva - Food, fashion & beauty
    • Society Insider
    • Royals
    • Sex & relationships
    • Food & drinkRecipesRecipe collectionsRestaurant reviewsRestaurant bookings
    • Health & wellbeing
    • Fashion & beauty
    • Pets & animals
    • The Selection - Shop the trendsShop fashionShop beautyShop entertainmentShop giftsShop home & living
    • Milford's Investing Place
  • Entertainment
    • All Entertainment
    • TV
    • MoviesMovie reviews
    • MusicMusic reviews
    • BooksBook reviews
    • Culture
    • ReviewsBook reviewsMovie reviewsMusic reviewsRestaurant reviews
  • Travel
    • All Travel
    • News
    • New ZealandNorthlandAucklandWellingtonCanterburyOtago / QueenstownNelson-TasmanBest NZ beaches
    • International travelAustraliaPacific IslandsEuropeUKUSAAfricaAsia
    • Rail holidays
    • Cruise holidays
    • Ski holidays
    • Luxury travel
    • Adventure travel
  • Kāhu Māori news
  • Environment
    • All Environment
    • Our Green Future
  • Talanoa Pacific news
  • Property
    • All Property
    • Property Insider
    • Interest rates tracker
    • Residential property listings
    • Commercial property listings
  • Health
  • Technology
    • All Technology
    • AI
    • Social media
  • Rural
    • All Rural
    • Dairy farming
    • Sheep & beef farming
    • Horticulture
    • Animal health
    • Rural business
    • Rural life
    • Rural technology
    • Opinion
    • Audio & podcasts
  • Weather forecasts
    • All Weather forecasts
    • Kaitaia
    • Whangārei
    • Dargaville
    • Auckland
    • Thames
    • Tauranga
    • Hamilton
    • Whakatāne
    • Rotorua
    • Tokoroa
    • Te Kuiti
    • Taumaranui
    • Taupō
    • Gisborne
    • New Plymouth
    • Napier
    • Hastings
    • Dannevirke
    • Whanganui
    • Palmerston North
    • Levin
    • Paraparaumu
    • Masterton
    • Wellington
    • Motueka
    • Nelson
    • Blenheim
    • Westport
    • Reefton
    • Kaikōura
    • Greymouth
    • Hokitika
    • Christchurch
    • Ashburton
    • Timaru
    • Wānaka
    • Oamaru
    • Queenstown
    • Dunedin
    • Gore
    • Invercargill
  • Meet the journalists
  • Promotions & competitions
  • OneRoof property listings
  • Driven car news

Puzzles & Quizzes

  • Puzzles
    • All Puzzles
    • Sudoku
    • Code Cracker
    • Crosswords
    • Cryptic crossword
    • Wordsearch
  • Quizzes
    • All Quizzes
    • Morning quiz
    • Afternoon quiz
    • Sports quiz

Regions

  • Northland
    • All Northland
    • Far North
    • Kaitaia
    • Kerikeri
    • Kaikohe
    • Bay of Islands
    • Whangarei
    • Dargaville
    • Kaipara
    • Mangawhai
  • Auckland
  • Waikato
    • All Waikato
    • Hamilton
    • Coromandel & Hauraki
    • Matamata & Piako
    • Cambridge
    • Te Awamutu
    • Tokoroa & South Waikato
    • Taupō & Tūrangi
  • Bay of Plenty
    • All Bay of Plenty
    • Katikati
    • Tauranga
    • Mount Maunganui
    • Pāpāmoa
    • Te Puke
    • Whakatāne
  • Rotorua
  • Hawke's Bay
    • All Hawke's Bay
    • Napier
    • Hastings
    • Havelock North
    • Central Hawke's Bay
    • Wairoa
  • Taranaki
    • All Taranaki
    • Stratford
    • New Plymouth
    • Hāwera
  • Manawatū - Whanganui
    • All Manawatū - Whanganui
    • Whanganui
    • Palmerston North
    • Manawatū
    • Tararua
    • Horowhenua
  • Wellington
    • All Wellington
    • Kapiti
    • Wairarapa
    • Upper Hutt
    • Lower Hutt
  • Nelson & Tasman
    • All Nelson & Tasman
    • Motueka
    • Nelson
    • Tasman
  • Marlborough
  • West Coast
  • Canterbury
    • All Canterbury
    • Kaikōura
    • Christchurch
    • Ashburton
    • Timaru
  • Otago
    • All Otago
    • Oamaru
    • Dunedin
    • Balclutha
    • Alexandra
    • Queenstown
    • Wanaka
  • Southland
    • All Southland
    • Invercargill
    • Gore
    • Stewart Island
  • Gisborne

Media

  • Video
    • All Video
    • NZ news video
    • Herald NOW
    • Business news video
    • Politics news video
    • Sport video
    • World news video
    • Lifestyle video
    • Entertainment video
    • Travel video
    • Markets with Madison
    • Kea Kids news
  • Podcasts
    • All Podcasts
    • The Front Page
    • On the Tiles
    • Ask me Anything
    • The Little Things
  • Cartoons
  • Photo galleries
  • Today's Paper - E-editions
  • Photo sales
  • Classifieds

NZME Network

  • Advertise with NZME
  • OneRoof
  • Driven Car Guide
  • BusinessDesk
  • Newstalk ZB
  • Sunlive
  • ZM
  • The Hits
  • Coast
  • Radio Hauraki
  • The Alternative Commentary Collective
  • Gold
  • Flava
  • iHeart Radio
  • Hokonui
  • Radio Wanaka
  • iHeartCountry New Zealand
  • Restaurant Hub
  • NZME Events

SubscribeSign In
Advertisement
Advertise with NZME.
Home / New Zealand

Ananish Chaudhuri: Let's explode some myths about immigration

By Ananish Chaudhuri
NZ Herald·
5 Apr, 2017 05:00 PM5 mins to read

Subscribe to listen

Access to Herald Premium articles require a Premium subscription. Subscribe now to listen.
Already a subscriber?  Sign in here

Listening to articles is free for open-access content—explore other articles or learn more about text-to-speech.
‌
Save

    Share this article

Those who suggest immigrants are a net drain on the economy are trying to sell "alternative facts". Photo / Mark Mitchell

Those who suggest immigrants are a net drain on the economy are trying to sell "alternative facts". Photo / Mark Mitchell

Opinion

In late February two young Indian men, having a drink in a bar in Olathe, Kansas, were shot, one fatally. Ostensibly, the shooter believed that they were illegal immigrants. Neither of them were.

Both had studied in the US and were working there legally.

It would be easy to dismiss this as the work of a madman, if only it were so.

While the global economy is beginning to recover from the financial crisis, working class wages have been stagnating and anti-immigrant sentiments are on the rise in developed nations.

There is no denying the rise of Donald Trump and his nativist "America First" stance have become a vehicle for expressing such sentiments.

Advertisement
Advertise with NZME.
Advertisement
Advertise with NZME.

American researchers have shown that there was a sharp increase in anti-Muslim hate crimes in the days following a speech by Donald Trump, then a candidate, calling for a "total and complete shutdown of Muslims entering the United States."

There is an ill-wind blowing and it is unlikely that we will remain immune.

An early preview arrived in the form of the Government's decision to deport a number of Indian students, at least some of whom were clearly victims of a system designed to serve the needs of New Zealand's education industry.

So, here are some facts and figures to counter the often-touted arguments against immigration; about how immigrants are a drain on the economy; how they take jobs away from hard-working blue collar workers; how they fail to assimilate and do irreparable damage to our "culture".

Are immigrants a drain on the economy?

An easy way of checking this is to calculate the "fiscal impact" of migrants on average. Essentially this means how much does an average immigrant pay in taxes and how much does he or she receive in return in the form of public education, access to healthcare, superannuation, welfare benefits and so on?

Discover more

Entertainment

Film to shed light on untold Asian stories

25 Mar 10:50 PM
Opinion

Make skills, family focus for immigration policy

23 Mar 04:00 PM
World

Thousands rescued from Mediterranean

26 Mar 08:48 PM
World

Trump voter's husband could be gone tomorrow

05 Apr 12:21 AM

According to a 2013 report compiled by Business and Economic Research Ltd (BERL) for the Department of Labour, in that year the net contribution of immigrants to the New Zealand economy was positive and totalled $2,912 million. That is, immigrants contributed that much more than the value of the services they received.

This effect is equivalent to $2653 per migrant. In comparison, the New Zealand-born population in 2013 had a total net fiscal impact of $540m; the equivalent of $172 per NZ-born person.

Advertisement
Advertise with NZME.

The fiscal impact is positive for all sub-groups; it is highest for those coming from Europe and North America, followed in turn by Asians, UK and Ireland, Australians and Pacific Islanders. But the fiscal impact of each of those sub-groups exceeds that of the native-born.

Do immigrants displace native workers?

Yes, to an extent. But it is important to remember the total number of jobs is not fixed. The arrival of immigrants increases the national pie and in turn creates new jobs.

However, economists are beginning to realise that there is a powerful new force driving blue-collar wages downwards, independent of inward migration.

Eduardo Porter, writing in the New York Times, points out there is a radical reorganisation of the workplace under way from the outsourcing of many tasks, including running the cafeteria, building maintenance and security, to low-margin, low-wage subcontractors.

This is playing a big role in keeping wages down and increasing income inequality, much more so than globalisation can account for.

Many employers now are looking to outsource non-core tasks, thereby avoiding difficulties like unions as well as workplace entitlements and regulations of employing workers directly.

Advertisement
Advertise with NZME.

Porter writes: "These days the receptionist at the front desk is unlikely to work for the hotel. The truck driver may not work for the delivery company, nor the nurse for the hospital."

Much of the evidence that we have here comes from the US. A recent study by two leading economists, Lawrence Katz of Harvard and Alan Krueger of Princeton, concluded that independent contractors and various types of temporary workers together accounted for 94 per cent of employment growth in the past 10 years.

Many of these jobs are poorly paid. A recent study found outsourcing imposed a wage penalty of up to 7 per cent for janitors and up to 24 per cent for security guards.

This kind of outsourcing increases the slice of national income going to corporations and shareholders at the expense of the workers independent of any effect of immigration.

Do immigrants fail to assimilate?

It is my view that arguments about assimilation are usually a cover for an aversion to ethnic diversity. Consequently, it is difficult to provide a cogent counter-argument.

If immigrants confined themselves to their own little communities, as is sometimes the case, particularly in larger economies, this could potentially be an issue. But, typically, this would be true for at most one generation.

Advertisement
Advertise with NZME.

Immigrants are typically young with children and those children go to local schools, so by the second generation assimilation is well under way.

There is no doubt that while immigration increases the size of the national pie, it does create winners and losers. For workers suffering from stagnating wages, the sense of displacement and disillusionment is real.

But, the bottom-line is clear: The net gain to society from immigration outweighs the losses and, therefore, there must be ways of providing a safety net for displaced workers in a way that makes all of us better off.

In the meantime and leaving cultural arguments aside, those who suggest immigrants are a net drain on society in economic terms are purveying "alternative facts" that should not be part of informed discussion.

• Ananish Chaudhuri is professor of experimental economics and head of the economics department at the University of Auckland. The views expressed are entirely his own.

Save

    Share this article

Latest from New Zealand

New Zealand

Police seek man after 'deeply concerning' attack on popular Porirua trail

20 Jun 07:03 AM
New Zealand

Have you seen her? Police concerned for missing Dunedin woman

20 Jun 06:45 AM
Crime

Duo jailed after vigilante burglary of Epsom mansion terrorises wrong woman

20 Jun 06:00 AM

Jono and Ben brew up a tea-fuelled adventure in Sri Lanka

sponsored
Advertisement
Advertise with NZME.

Latest from New Zealand

Police seek man after 'deeply concerning' attack on popular Porirua trail

Police seek man after 'deeply concerning' attack on popular Porirua trail

20 Jun 07:03 AM

The woman was shaken by the incident.

Have you seen her? Police concerned for missing Dunedin woman

Have you seen her? Police concerned for missing Dunedin woman

20 Jun 06:45 AM
Duo jailed after vigilante burglary of Epsom mansion terrorises wrong woman

Duo jailed after vigilante burglary of Epsom mansion terrorises wrong woman

20 Jun 06:00 AM
NZ pauses $18.2m aid to Cook Islands amid China deal tensions

NZ pauses $18.2m aid to Cook Islands amid China deal tensions

20 Jun 05:27 AM
Help for those helping hardest-hit
sponsored

Help for those helping hardest-hit

NZ Herald
  • About NZ Herald
  • Meet the journalists
  • Newsletters
  • Classifieds
  • Help & support
  • Contact us
  • House rules
  • Privacy Policy
  • Terms of use
  • Competition terms & conditions
  • Our use of AI
Subscriber Services
  • NZ Herald e-editions
  • Daily puzzles & quizzes
  • Manage your digital subscription
  • Manage your print subscription
  • Subscribe to the NZ Herald newspaper
  • Subscribe to Herald Premium
  • Gift a subscription
  • Subscriber FAQs
  • Subscription terms & conditions
  • Promotions and subscriber benefits
NZME Network
  • The New Zealand Herald
  • The Northland Age
  • The Northern Advocate
  • Waikato Herald
  • Bay of Plenty Times
  • Rotorua Daily Post
  • Hawke's Bay Today
  • Whanganui Chronicle
  • Viva
  • NZ Listener
  • Newstalk ZB
  • BusinessDesk
  • OneRoof
  • Driven Car Guide
  • iHeart Radio
  • Restaurant Hub
NZME
  • About NZME
  • NZME careers
  • Advertise with NZME
  • Digital self-service advertising
  • Book your classified ad
  • Photo sales
  • NZME Events
  • © Copyright 2025 NZME Publishing Limited
TOP