The Migration Myth

Contrary to Right-Wing Rhetoric, the Economic Effects of Immigration are Almost Always Positive for the Host Country

News | Dardis McNamee | October 2007

Economist Rachel Friedberg speaks on immigration at the Amerika Haus (Photo: Halley Brunsteter)

With all the discussion about the pros and cons of immigration, it is easy to get the impression that Austria is Xenophobic. Vienna residents of Brigittenau demonstrated on Sept. 13 against the building of a mosque and cultural centre in their neighbourhood, launching a flood of debate, while right-wing politicians like the Freedom Party’s Heinz Christian Strache continue to call for an "Austria for the Austrians."

Then a few days later, in the anticipation of the 2008 expansion of the Schengen "open borders" Agreement to new EU member states, and in light of the recent terrorist threats in the United Kingdom and Germany, the Austrian government announced increased co-operative policing of the borders with its neighbuor countries to the East.

And in countless anecdotal examples, many reported in this newspaper, rudeness and insults toward foreigners seem to be the common currency of daily life. [See Zara vs. Racism, VR Sept. ‘07, p. 15; Dear Diary, p. 28 in this issue.]

So it may come as a surprise to some that Austria is in fact a "country of immigration," according to Alexander Janda of the Austrian Integration Fund, with a population of 15% foreign residents (25% in Vienna), the second highest in Europe after Luxemburg.

"Some politicians present immigration as if it were a choice, when in fact, immigration is simply a fact of life, whether we like it or not," Janda said. "The leaders say no, because they fear the public reaction, but anyone in these positions knows the answer is yes."

Speaking at the conference, "Migration in the 21st Century," jointly sponsored by the American and Australian Embassies and held at the Amerika Haus Sept. 25, Janda challenged what he called the "migration mythology" so prevalent in Austria, a denial of the large and important role that immigrants play in Austrian society.

In contrast to the American myth of "rags to riches," Austria tends to smother the potential contributions of its immigrants, many of whom are highly qualified and motivated to succeed here. He noted how so many Austrian émigrés had succeeded  in America, recalling the story of  Eric Kandel , who began as a dish washer, and was awarded the Nobel Prize for Medicine in 2000 .

"We had a top biologist come here recently from Afghanistan," he remembered. "We tried to set him up with a research position at the university, and he ended up washing dishes at hotel on the Ring.

"Here we do it in reverse. We de-qualify."

The irony is heightened with the rising flood of evidence that immigration has a powerful, and almost unqualifiedly, positive effect on the economy of the host country.

"The bottom line is that countries that have welcomed immigration have consistently had an economic benefit," said Rachel Friedberg, an economist from Brown University, and a senior research fellow at the National Bureau of Economic Research in Cambridge, Mass., in the U.S.. She pointed out that people tend to focus on the impact on the labor force, assuming that, in the classic supply and demand equation, immigration will have a drag effect on the wages of the existing population.

"But things are much more complicated than the simple paradigm," she said. "The theory doesn’t tell us the degree. Also, there are many kinds of labor, so it’s not a question of simple substitution." Using the example of Mexican farm workers, she described how an increase in the supply of workers of, say, lettuce pickers, would increase harvests and additional jobs in distributional and retail.

"While native lettuce pickers might feel the pressure, for the lettuce grower it means easier production; for truck drivers, it means more to deliver; for restaurants, it means seven kinds of salad, and possibly higher prices on the menu. So labour is never just labour, and the theory never tells you the magnitude."

The best tests of the impact of immigration have come from accidents of history, like the Algerian War in 1952, when French colonists returned to France; the Mariel Boatlift in 1980, when 125,000 Cubans were allowed by Fidel Castro to leave Cuba and descended en mass on Maimi; or in 1990, when one million Russian Jews were allowed to emigrate to Israel.

"It was as if all of Estonia and Iceland had moved to Austria over a two month period," she said. Most had been more educated than the Israelis, so sociologists were eager to see what would happen to the native born residents.

"They didn’t do worse, as many had feared," Friedberg said. "The economy adjusts. And often the immigrants can push the original residents up." In Israel, the economy expanded: The doctors turned to medical research; the musicians formed new orchestras, several of which became permanently touring ensembles.

"The greatest effect is when the immigrants come to stay," she said, "because then they make the investment. When they think they are there for only a little while, and that they are not welcome, you will not get the benefits."

In Austria, many of these same effects have also been recorded. In one study, The Costs and Benefits of European Integration, by Rainer Muenz, of Europa Forum Wien, immigration, along with the EU expansion to the East,  is seen as one of the  key factors in Austria continuing prosperity and relative insulation from the problems of an aging population that are plaguing the rest of Europe.

"In the end, the best way to counteract the shrinking of the working age population is the recruiting of qualified young adults from abroad," Muenz wrote. "To do this, you have to have an active migration policy, and also a climate of acceptance for the immigrants, or otherwise, all these immigrants that we need for economic reasons will not come to the West."

"On the rational side, it’s clear," Janda said at the conference. "But Austrian society has not been informed. There is an information gap, because the politicians don’t dare address it. But when people have a lot of fear, this has to be addressed."

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