You yourself are ignoring a huge part of the issue—capital.
If there is excess capital then this is not relevant. But this is not usually the case. Each immigrant requires capital to support their life and their work. The numbers involved are huge, perhaps $300,000-500,000 per person.
Using econometric data from Australia I estimated that about 25% of its GDP is expended just keeping up with population growth, mostly from (highest in the western world) immigration. New roads, hospitals, schools, colleges, fire stations, houses, power stations, subways etc have to be built. This is why many roads that used to be free to drive on are now toll roads even though the traffic is slower. Taxes go up to pay for new public services.
The rate of spending here is proportional to the rate of growth. For a static population you only need to pay for depreciation and maintenance.
This issue is why it is a cliche in development economics that high population growth rates make it almost impossible for poor countries to get rich. All the growth is consumed paying the the higher population.
It also explains why Japan remains prosperous, clean and a nice place to visit in spite of low GDp growth. With more or less zero population growth the need for new infrastructure is low, free up ~25% of GDP.
Your essay reads—to me—a bit like you are working backwards from a preordained conclusion rather than working forward from the data. Could I suggest going back to square one and taking another look at the whole question.
First of all, I am not directly advocating immigration nor am I against it—I am analyzing one particular aspect of it. A common reaction towards immigration is “they are robbing our jobs” and I tried to outline the faulty logic underneath that. They are not stealing anything, but becoming part of the economy.
Immigration is a complex issue that has to be decided on a case-by-case basis. If there are food shortages in a country, adding more people makes no sense. If there is, as you say, an excess of capital, but not enough people to invest it into, it does make sense. Australia is only one particular case.
Since the argument I am making is a priori, I don’t need data.
Can you elaborate on the connection between capital and immigration? In particular, who is paying the aforementioned $300,000 - $500,000? It’s not like every immigrant is getting a paycheck. If these are public expenses paid over a long period of time, I don’t see the problem. You are right in saying that excessive population growth or immigration is detrimental, though. (This is why I made the distinction between short-term and long-term)
If the population growth is organic and at a sustainable rate, doesn’t this lead to a higher GDP, which is a desirable outcome?
You yourself are ignoring a huge part of the issue—capital.
If there is excess capital then this is not relevant. But this is not usually the case. Each immigrant requires capital to support their life and their work. The numbers involved are huge, perhaps $300,000-500,000 per person.
Using econometric data from Australia I estimated that about 25% of its GDP is expended just keeping up with population growth, mostly from (highest in the western world) immigration. New roads, hospitals, schools, colleges, fire stations, houses, power stations, subways etc have to be built. This is why many roads that used to be free to drive on are now toll roads even though the traffic is slower. Taxes go up to pay for new public services.
The rate of spending here is proportional to the rate of growth. For a static population you only need to pay for depreciation and maintenance.
This issue is why it is a cliche in development economics that high population growth rates make it almost impossible for poor countries to get rich. All the growth is consumed paying the the higher population.
It also explains why Japan remains prosperous, clean and a nice place to visit in spite of low GDp growth. With more or less zero population growth the need for new infrastructure is low, free up ~25% of GDP.
Another (more widely viewed) form of capital is land. Combined with restrictive land use regulations in many parts of the rich west, this is a recipe for higher and more volatile land and house prices. See e.g. https://www.ft.com/__origami/service/image/v2/images/raw/https%3A%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2F3175bb18-2ceb-4125-b48e-a386bef8d43c_FINAL.png?source=Alphaville
Your essay reads—to me—a bit like you are working backwards from a preordained conclusion rather than working forward from the data. Could I suggest going back to square one and taking another look at the whole question.
First of all, I am not directly advocating immigration nor am I against it—I am analyzing one particular aspect of it. A common reaction towards immigration is “they are robbing our jobs” and I tried to outline the faulty logic underneath that. They are not stealing anything, but becoming part of the economy.
Immigration is a complex issue that has to be decided on a case-by-case basis. If there are food shortages in a country, adding more people makes no sense. If there is, as you say, an excess of capital, but not enough people to invest it into, it does make sense. Australia is only one particular case.
Since the argument I am making is a priori, I don’t need data.
Can you elaborate on the connection between capital and immigration? In particular, who is paying the aforementioned $300,000 - $500,000? It’s not like every immigrant is getting a paycheck. If these are public expenses paid over a long period of time, I don’t see the problem. You are right in saying that excessive population growth or immigration is detrimental, though. (This is why I made the distinction between short-term and long-term)
If the population growth is organic and at a sustainable rate, doesn’t this lead to a higher GDP, which is a desirable outcome?