CIR INTERVIEWS: Herbert G. Grubel
Herbert G. Grubel: “Too late is when immigrants have an overwhelming influence on election outcomes and remain interested in having more people from their home countries join them.”
CIReport.ca: Professor Grubel, you are a Senior Fellow with the Fraser Institute and Professor of Economics at Simon Fraser University. Much of your work has been on the subject of immigration. How and when did you first become interested in the economics of population movement?
Herbert G. Grubel: In the mid-1960s I co-authored an article, which was published in the American Economic Review on the economics of the brain drain. This article was followed by several others in leading journals, including Science, and a National Science Foundation grant to study the register of scientific and technical personnel for data on the national origin of US scientists.
I have always advocated free migration because of its beneficial effects on global income and freedom. However, this analysis assumes the absence of the welfare state. My recent work considers the implications for the traditional conclusions that are due to the existence of the welfare state and the low incomes of recent immigrants into Canada.
CIReport.ca: Discussions on immigration policy tend to elicit strong emotions and frequently transform into name-calling and hysterics. What was the reaction of your family, friends and colleagues on your findings and why is immigration a tough subject to approach?
Herbert G. Grubel: The reaction has been surprisingly civil. Careful, reproducible empirical work with a focus on economic issues is difficult to attack. Most criticism is based on the existence of intangible and possible future benefits that the empirical work is alleged to neglect.
CIReport.ca: Politicians are extremely cautious and are forced to walk on eggshells when it comes to discussing immigration. Are economists under similar pressure?
“Immigration is no panacea for all the ailments of Western nations.”
Herbert G. Grubel: That pressure is self-imposed and has the beneficial effect of making sure that any analysis is objective, limited to economic issues and can be reproduced by qualified analysts. The public is open to such knowledge but rejects arguments that are based on emotion and involve judgments about the superiority of races, cultures and religions.
CIReport.ca: Economic growth and sustainability are often said to be the foremost factors in justifying large transfers of population to Western nations. In the immediate or long term, is immigration a panacea for all that ails the West?
Herbert G. Grubel: Immigration is no panacea for all the ailments of Western nations. The justification for this statement is lengthy and found in my papers.
“Losers are the workers who compete with immigrants at all skill levels.”
CIReport.ca: Which population segment in Canadian society most benefits from immigration as it occurs presently, and which is the most disadvantaged?
Herbert G. Grubel: Primary beneficiaries are employers and the housing industry. Losers are the workers who compete with immigrants at all skill levels. Their wages are depressed.
CIReport.ca: As economist, how do you see the future of this nation if we continue to import about half a million people per year?
Herbert G. Grubel: That depends on their economic success. If their incomes are above the average, they pay enough taxes to at least pay for the government benefits they receive. But there are also negative economic effects like pollution and crowding and non-economic effects on culture that are impossible to measure, which are greater the larger is the annual inflow.
CIReport.ca: On the CIC website, a statement by Jason Kenney reads: “The Government of Canada is maintaining immigration levels to meet Canada’s short, medium and long term economic needs, help offset our aging population and low birthrate, and sustain our workforce.” Do you think that the reasons enumerated by Minister Kenney are honest?
Herbert G. Grubel: These reasons represent the conventional wisdom that has been given much publicity in the past and is embraced by most Canadians. In my publications I present arguments and empirical evidence implying that these benefits do not exist or extremely uncertain.
“This program imposes very high burdens on Canadians because these typically older persons pay few or no taxes but are entitled to costly public benefits.”
CIReport.ca: Family reunification is an important subject among immigrants. Does bringing in parents and grandparents make sense when our aging population is already a “problem”?
Herbert G. Grubel: This program imposes very high burdens on Canadians because these typically older persons pay few or no taxes but are entitled to costly public benefits. Sponsors are rarely required to pay for these benefits. If the program were stopped, the pool of potential immigrants would shrink very little and the effects on the quality of immigrants would almost certainly be minimal.
CIReport.ca: In 2005, you published “Immigration and the Welfare State in Canada: Growing Conflicts, Constructive Solutions”. Let’s talk about the fiscal contribution of immigrants. Myth or reality?
Herbert G. Grubel: The data show that the low average incomes of recent immigrants in Canada’s welfare state result in a very large fiscal burden. There are no benefits.
CIReport.ca: How could Western governments reform the selection of immigrants to benefit the host country? Is this scenario even possible without being detrimental to developing nations?
Herbert G. Grubel: We should allow immigrants into Canada only if they have a pre-arranged employment contract, paying a wage sufficiently high to pay for the government services they consume. If we care about helping developing nations most effectively, using an amount of resources that we can afford, direct aid is much more efficient that having some of their population migrate to Canada.
“A complete halt is not desirable or politically feasible.”
CIReport.ca: In 2008, the Fraser Institute organized most likely the most important conference on immigration in Canadian history. You presented evidence that Canada must reconsider the impact of its immigration policies. What was our government’s reaction?
Herbert G. Grubel: There was no reaction that I am aware of, which of course does not preclude that there has been some among politicians and policy makers.
CIReport.ca: Would a 50-year long halt on mass immigration be economically and demographically desirable for Canada?
Herbert G. Grubel: A complete halt is not desirable or politically feasible. Let the market decide how many immigrants we have, using the pre-arranged employment criterion for selection and individuals and determining the number.
CIReport.ca: When it comes to an immigration reform, who is our biggest enemy?
Herbert G. Grubel: I do not like the word enemy. There are politicians, the immigration “industry” and lobbyists, some employers and industries that have strong interests in preserving the current system. Like all of us, they are just maximizing their benefits available under that system.
CIReport.ca: Had you had the power to change our immigration policy, what would you have done by now?
Herbert G. Grubel: Dropped the points system and used holding private employment contracts as the main admissions criterion. Make the refugee program more efficient and non-political.
CIReport.ca: Why are economists such as yourself and George Borjas not regularly consulted in matters of immigration planning ?
Herbert G. Grubel: Policy makers directed by politicians have too much at stake in the current system. Politicians face electoral risks if they become too close to critics of the current system and this fact becomes known and is exploited during elections.
“The negative effect on the social fabric is much less coming from immigrants from China than from the Middle East, those with most religions and with commitment to the Koran.”
CIReport.ca: Is there hope for change before being too late? What would “too late” mean in the context of our economy and the fabric of our society?
Herbert G. Grubel: Too late is when immigrants have an overwhelming influence on election outcomes and remain interested in having more people from their home countries join them. This point may never be reached if immigrants realize that the existing immigrant selection programs are costing them and their offspring dearly.
The threats to the fabric of society depend much on the character of immigrants, which is determined by their origin and religion. The negative effect on the social fabric is much less coming from immigrants from China than from the Middle East, those with most religions and with commitment to the Koran.
CIReport.ca: On a personal note, do you feel that humanitarian reasons are a justifiable reason for immigration, and if so at what cost?
Herbert G. Grubel: This issue needs much public discussion. My job is to document the economic costs of immigration motivated by the humanitarian instincts of Canadians.
CIReport.ca: Thank you.
Herbert G. Grubel
Professor of Economics (Emeritus), Simon Fraser University
Senior Fellow, The Fraser Institute
For short articles visit my blog: http://hgrubel.blogspot.com/ and for scholarly papers go to the SSRN at: http://ssrn.com/author=1376770.
Herbert G. Grubel is Professor of Economics (Emeritus) at Simon Fraser University and a Senior Fellow at the Fraser Institute in Vancouver, BC, Canada. He was born in Germany in 1934. He has a B.A. from Rutgers University (1958) and a Ph.D. in economics from Yale University (1963). He has taught full-time at Yale University, Stanford University, the University of Chicago, and the University of Pennsylvania; and has had temporary appointments at universities in Berlin, Singapore, Cape Town, Nairobi, Oxford, Canberra and Bologna. He was a Reform Party Member of Parliament in Ottawa from 1993 to 1997, serving as the Finance Critic from 1995 to 1997. He has published 18 books and 190 professional articles in economics, dealing with international trade and finance and a wide range of economic policy issues. His recent research interests include capital gains taxation, monetary union and immigration policy. His personal website containing precise references to his publications is found at www.sfu.ca/~grubel.
Video source: CPAC