Alan Gamlen: Inequality drives many to quit NZ

If people are poor enough to feel excluded from their own society, but not too poor to escape, they will try to do so. Photo / Doug Sherring

To be worse off among peers at home hurts more than being worse off abroad, writes Alan Gamlen.

Emigration is driven not only by opportunities, but also by inequalities. The OECD has issued alarming advice for governments to take "urgent action to tackle rising inequality and social divisions". New Zealand has left these issues unaddressed for too long, and we need to acknowledge it is one of the reasons why our people keep leaving.

Emigration has been worryingly high for decades. It makes headlines when it spikes, but "emigration is a pattern, not a crisis", as demographer Graeme Hugo puts it. In the average week since 1979, about 880 New Zealand citizens have departed, but only about 450 have returned. This matters because it suggests we have trouble retaining people, and might be somehow letting them down.

Why are people leaving? At least since the 1980s, the conventional wisdom has been that, despite heroic government efforts, we can do little to stop higher wages and better weather pulling opportunistic New Zealanders across the Tasman. But this explanation ignores the fact that emigration is driven not only by opportunities for enrichment but also by inequalities and exploitation.

The transtasman wage-gap story is important, but it relies on a simplified economic view of the world, in which each migrant decides individually to move, after calculating it will on balance raise his or her income.

This classical explanation of migration fell out of vogue internationally in the 1970s when researchers began to realise two things: would-be migrants often lack good information about foreign wage levels and the costs of moving, and migration decisions are deeply influenced not only by individual calculations but also by families and communities.

In recent years, international migration research had relied less on classical ideas about foreign wage levels, and more on the "new economics of labour migration". According to this school of thought, migration is driven not by wage differences between origin and destination countries, but by "relative deprivation".

In other words, being worse off than one's peers at home hurts more than being worse off than strangers living abroad. Rather than just inequalities between countries, current theory says, migration is also driven by inequalities within origin countries.

Migrants may not have perfect information about wages in a far-off region or about the costs of getting there. But they can and do respond to an acute awareness of their place in the pecking order at home.

If they are poor enough to feel excluded from their own society, but not too poor to escape, they will try to do so.

Inequality in New Zealand has widened markedly since the 1980s, and in addition to a much-lamented "underclass" of unskilled New Zealanders without employment prospects, we have also seen the emergence of a "squeezed middle" of educated but debt-ridden people nearing middle-age, for whom there are no jobs worthy of their costly skills, and who feel no hope of ever affording their own homes.

The plight of such groups is directly relevant to our understanding of why New Zealanders are moving abroad. As they see the 1 per cent streak ahead, their only hope of catching up is to seek their fortune elsewhere.

If inequality matters as an emigration driver, why do we only hear about higher overseas wages? One reason is political. Opposition parties score points by blaming incumbent governments for emigration, while governments blame emigration on inherited long-term problems, like wage differences.

This is a set game rigged to end in stalemate. What the public sees as a pitched political battle over emigration is often more of a ritualised bloodsport. Politicians have even taken to simply recycling each other's stunts - such as being photographed with an empty stadium symbolising the impact of emigration.

This game obscures the bigger picture that emigration matters, both because we are "losing" people, and because the "lost" people are participating in our society to an extent that was not possible a generation ago. The recent founding of a New Zealand Expatriate political party is only one sign of this.

Nonetheless, it's an easy issue to play down, because emigration lowers unemployment pressures that might otherwise force change. Corrupt and ineffectual governments elsewhere in the world often depend on emigration: it literally makes their problems go away.

For at least four decades emigration has been one of New Zealand's great national dramas. But each time it is replayed at election time, the characters get a bit thinner. The government is either cast as a one-dimensional bad guy, responsible for all emigration, or as a helpless hero struggling against global economic forces.

Elsewhere in the real world, emigration is caused both by international income disparities, and by the inequalities and vulnerabilities in migrants' own backyards. We need to look more closely at the link between our inequality and our emigration.

Dr Alan Gamlen, a senior lecturer at Victoria University and research associate at Oxford University, is editor-in-chief of the journal Migration Studies published by Oxford University Press.

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