Without immigrants economy would stall

"Bloody immigrants, taking our jobs, shouldn't be allowed!" That's how conservative working-class voters sharing a jug at the Hornby Working Men's Club might've put it.

But their analysis, for all its pith and honesty, would've been wrong. Immigrants have become an indispensable component of the New Zealand labour market.

Without them our economy would stall. It was David Shearer's duty to explain that. As leader of the Labour Party his role is to counter ignorance with facts, and prejudice with values. In Christchurch last week he did neither.

In his speech to the Hornby Working Men's Club on Thursday, Shearer quite rightly stated that: "We need to avoid being locked into a downward spiral where our skilled people go to Australia for better wages, where those people are replaced by migrants who are paid less, which in turn sends more of our skilled workers to Australia."

In that single sentence the Labour leader encapsulated the grim dynamic of New Zealand's labour market. This country's ability to hold on to its skilled workers has been very seriously weakened by the power of what is, in effect, a single Australasian market for skilled labour.

In this context New Zealand operates not as a sovereign state, but as an entity indistinguishable from a state of Australia. The 35 per cent-plus premium Australian employers are willing to pay skilled Kiwis for crossing the Tasman leaves New Zealand's Government with no option but to replace them with skilled immigrants for whom New Zealand wages and salaries exercise a similar magnetic effect.

Shearer appears to think that limiting the influx of immigrant labour will somehow slow the exodus of skilled New Zealand workers to Australia. But it won't. Australia's borders remain open, and so long as that remains the case the cleverest and most talented Kiwis will continue to fly.

And if the efforts of the New Zealand Government to meet the rising demand for skilled labour (driven in large measure by the Christchurch rebuild) are to be scaled back, and the inflow of immigrants choked off, the economy will also suffocate.

At the core of the problems Shearer identifies in his speech is the depressed levels of New Zealand wages and salaries. One way to address this would be to simply prohibit the emigration of skilled New Zealand workers. That would, of course, require New Zealand to become a totalitarian state - a solution most of us would reject out of hand. The other alternative is to substantially lift New Zealanders' incomes.

The interesting question, therefore, is why Shearer offered his staunchly Labour audience so little in the way of concrete measures for lifting wages and salaries. A careful reading of his speech reveals that increased incomes have been relegated to mere aspirations: something Labour would like to see; expects to see; but will do nothing beyond a modest increase in the minimum wage to achieve.

This means that any Labour government led by Shearer is likely to shy away from direct interventions in the labour market. It will not pass legislation designed to reverse the flow of wealth from wage and salary earners to owners and shareholders. It will not, by substantially lifting the minimum wage, engineer a wholesale winnowing-out of New Zealand's most inefficient businesses. It will not pass legislation restoring universal union membership or the national award system. It will not use the government's ability to set wages and salaries in the public sector to provide both a guide and a goad for private sector employers. In short, it will not do any of the things required to raise the incomes of New Zealand's wage and salary earners.

What Shearer did do, however, was promise all kinds of direct aid and assistance to New Zealand Incorporated. "It's time we got proud," he said, "time we got patriotic. It's time we backed New Zealand, instead of taking our hands off the wheel."

But Shearer's patriotism is selective. State assistance goes only to exporters. Direct intervention in the labour market extends only as far as limiting the inflow of immigrants. And Labour's promise of improved living standards, by way of "high- skill, high-wage" jobs, continues to follow the example of the White Queen's employment contract in Through The Looking-Glass and What Alice Found There: "The rule is, jam tomorrow and jam yesterday - but never jam today."

What the audience gathered at the Hornby Working Men's Club deserved to hear from Shearer was an acknowledgement that Labour's challenges are specific and immediate. To raise incomes by re-empowering working people and redistributing wealth.

To make New Zealand a place where the diversity of its population is a source of strength and pride, not an opportunity for mistrust and division. To create a community of values, where loyalty is owed not to flags - but to principles.