Research finds positive effects of temporary migrants in New Zealand

by Ray Clancy on October 1, 2013

Hard working overseas workers have a positive impact on New Zealand and should not be regarded as a threat to jobs and wages, according to new research.

The study carried out by the Ministry of Business, Innovation and Employment (MBIE) is the first of its kind that specifically considers the effect of temporary migration over the last 10 years on existing workers. Research included figures from the MBIE, Statistics New Zealand and the Inland Revenue.

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The decade up to 2011 saw considerable growth in the use of temporary migrants in New Zealand

Temporary migrants and New Zealanders are complementary sources of labour and migrant workers are helping to create an economy with more jobs and higher wages for everyone, according to the study. It was found particularly true in certain industries that employ a lot of temporary workers such as dairy farming, horticulture, viticulture and the hospitality industry.

‘The government has a clear policy that New Zealanders should be given first priority for jobs, but our labour market has always relied on overseas workers to fill certain gaps and in areas of particular skill shortages,’ said Immigration Minister Michael Woodhouse.

‘Immigration is an important economic lever, and this report supports the view that policy settings around temporary migration are broadly in the right space. This analysis is a useful contribution for policy makers to help ensure we’ve got our immigration system working for the benefit of all New Zealanders,’ he explained.

The report describes how the decade to 2011 saw considerable growth in the use of temporary migrants, including international students, in the New Zealand labour market. This growth coincided with a period of strong economic growth and associated skills shortages. It explains how migrants are attracted to areas where employment is growing. As a result, immigration tends to be positively associated with local wages and employment.

There has been a change in where migrant workers come from. The UK and Ireland provided most temporary workers in the early part of the decade to 2011, China dominated in the period from 2006 to 2008, and India emerged as the main source of temporary migrant employment in 2011.

Temporary migrant employment grew over most of the decade to 2011, but adjusted to economic change from 2008, albeit not as quickly as for some groups of New Zealanders such as young people.

‘While employment through some temporary policy categories changed rapidly in response to declining labour demand and an increased supply of New Zealanders looking for work, the employment of migrants from other categories only flattened off,’ the report states.

‘Nevertheless, the research was unable to find any evidence that this had adverse consequences for the employment of New Zealanders overall. It could be that these migrants continued to do jobs that New Zealanders were unwilling or unable to undertake, and that temporary migrants continued to provide an important boost to the sectors of the economy in which they work,’ it explains.

The authors point out that the analysis was largely undertaken over a period of economic growth, and the possibility of negative impacts in the future should not be discounted, particularly if temporary immigration settings were relaxed.

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