Australia's complex 'refugee issue' requires fresh thinking. In a recent article, Judith Sloan, contributing economics editor at The Australian, provided just that with her suggestion that 'free market economics' might offer an answer.
Free market economics embraces the market as a solution to humanity's ills. A central tenet is that governments are never as good at distributing resources as markets. Anything that can be left to the market should be. Sloan introduces us to fellow free market economist Gary Becker's idea to apply this logic to immigration.
Becker's idea goes something like this: Markets distribute resources better than governments. The right to migrate is a resource. So we should create an immigration market, by charging an 'immigration price' — Becker suggests US$50,000. Then we sit back and watch the market 'select' the best migrants.
Becker claims people most likely to pay to migrate are also most likely to possess desirable characteristics — to be skilled, young and committed to the country they are entering. Keen-eyed readers might notice Becker's omission of perhaps the most obvious group of people who would pay — those rich enough to afford it.
Becker accommodates poor migrants by allowing businesses to lend the immigration fee to prospective migrants in exchange for their labour upon arrival. Of course poor migrants tend to be unskilled, so one suspects this scheme would remain largely unutilised. Moreover, The Economist notes this arrangement would virtually amount to indentured servitude. Becker would allow 'some exceptions' for 'truly humanitarian' migrants — but only 'maybe ... a lower price' for those who 'maybe are too old to earn anything'.
Sloan goes on to present some 'ugly' statistics from a 2011 DIAC report: 'Refugees fare very badly in terms of employment and financial self-sufficiency,' she reports, 'for example, the employment rate of humanitarian migrants from Afghanistan was recorded at only 9 per cent — note this is not the unemployment rate — five years after settlement and nearly 94 per cent of households from Afghanistan received Centrelink payments.'
Sloan has a fuzzy definition of 'example'. Of thirteen nationalities or regions listed in the report, Afghans have the worst employment and welfare receipt rates. She also quotes these rates for Iraqis, who rank second-worst.
Moreover, Sloan's line about 9 per cent 'not