Thursday, September 8, 2011

Fear-mongering before the next immigration surge

The Straits Times had a front page article today entitled "Population will shrink without immigrants".

[Not coincidentally, they also had "Baby and talent dearth in Taiwan's economic spiral" in the Review section. Real subtle, Straits Times editors.]

As expected, post-GE 2011, it's going to be business as usual for the government. The only concession is a softer, more persuasive, consultation style of government. In other words, the packaging will be prettier, but the contents will still be the same.

This post isn't another polemic about the evils of immigration, or the problems it creates. That's kind of boring, and my blog is all about fresher perspectives.

Here, I'll be talking about some things which may not be immediately apparent to people thinking about immigration.

I haven't read the report produced by the Institute of Policy Studies, so I can't in fairness comment on their methods, their modeling parameters, and all that dense technical stuff.

That's also not terribly fun to do, or read.

In general, I'm not going to dispute their findings on how the population will shrink if immigration doesn't keep apace. I will take their findings on good faith.

But what I do find interesting is how the the Straits Times article reported on the demographic model's output based on the "net" immigration rate of 0, 30,000 or 60,000 people per annum. The numbers sound nice and pretty and round, but they blithely ignore the messy realities of life (like all models).

"All models are wrong, but some are useful." - George Box.

Let me put it this way by using an analogy.

Let's say you have a cup and you're trying to fill it with water from a running tap. You get to control how much the tap is turned and so the rate at which water drips into the cup.

Your goal is to control how fast the cup is filling up. Note, this is not the same as the rate at which water comes out of the tap. The goal is to attain a target rate for how fast the cup is filling up.

I have this magic device that can poke holes in the bottom of your cup so that water leaks from the bottom of the cup. This device can also magically seal holes in the bottom of the cup, so leakage rates can change moment to moment.

Again, let me reiterate, the goal is to achieve a target rate of how fast the cup is filling up. You only get to control the tap, not the leaks.

Oh, and lest you forget, how much water you have in your cup changes the leakage rate of water out of your cup. The pressure of a higher water level will of course force water to leak out the bottom faster.

Your job is to maintain a constant rate at which the cup is filled, whether it's 30,000 units per year or 60,000 units per year.

You also have a natural concern about how full the cup is. That's because the water is scalding hot and filling it to overflowing will burn you very badly. Oh, and your Mom will beat the crap out of you if the cup becomes too empty.

It doesn't take a genius to see that the faster the tap is flowing, the harder it is to get your job done correctly.

My point here is that increased dependence on immigration will almost certainly lead to greater volatility in population numbers, with attendant consequences on public policy planning, services and infrastructure. Immigration may well be necessary, but it is hardly an unalloyed good.

A previous post of mine during GE 2011 indicated that the data suggests that PRs generally start leaving once they are past the prime of their working life, in their 40s and over. That's hardly surprising. People are here for the economic opportunities and the money. They are not here for the yawning income inequality, the stressful lifestyle, the astronomical property prices and difficulties in starting a family, and all the things that we ungrateful locals complain about.

I wrote then that, "Our new PRs who are now aged in their 20s and 30s today could well leave en masse five, ten or twenty years from now."

A greater outflow rate in the future means a greater rate of immigration (of new people who are then in their 20s and 30s) will be needed to compensate. This means that the flux through our proverbial cup is going to increase. In other words, our cup is going to leak very fast in the future, so the tap had better been turned on really fast too.

Try keeping the cup from being too full or too empty then.

Over the long term, the volatility in population numbers may mean that in some years or decades our public infrastructure may be strained due to too many people (like now), but in some years or decades, when the economy is weak, our population numbers may slide dramatically, with lots of spare capacity everywhere (read: weak property market).

Our government will of course do all they can to ensure a vigorous and growing economy forever.

Forever, however, is a very long time. 


mythomanic said...

I think that's exactly right. Arguably Singapore is becoming exactly like any other city in the world, with a high throughput of youngish, non-reproducing people who don't have the costs of children, homes and education to worry about.

The difference is that in other countries, the older people with families move out to the lower-cost suburbs and live there (and to some extent work there); whereas Singapore has only the city bit to work with, and the older people with families have nowhere else to go. I don't know if the people who run Singapore have been able to see/ anticipate that. Certainly they are not acting as if they have.

Resonance said...

A net 30 to 60K annual migration means 30 - 60K plus annual migration out of singapore.

Anonymous said...

As usual, yours is a fresh take on the tired more/less/no immigration debate.

Have u seen this?