Tag: australia

Sens. Cotton and Perdue’s Bill to Cut Legal Immigration Won’t Work and Isn’t an Effective Bargaining Chip

Republican Senators Tom Cotton (AR) and David Perdue (GA) are unveiling a bill today at the White House that would slash the number of legal immigrants by about 50 percent over the next decade.  This bill will be very similar to the RAISE Act that both Senators introduced in February, which I criticized here.  Their new bill, if it is similar to RAISE, would cut legal immigration by about 50 percent by reducing family reunification, eliminating the diversity visa, and statutorily limiting refugees without increasing skilled-worker immigration.  So much for the talking point that immigration hawks are “only against illegal immigration.”

Cotton-Perdue Does NOT Create a Skills-Based Immigration System

Supporters are saying that this bill would create a “skills-based immigration” policy but nothing could be further from the truth.  Cotton-Perdue does not increase skilled immigration at all – it only cuts non-employment categories like families and the diversity visa while creating a points-based system for employment-based green cards that does not increase the numerical cap.  The new Cotton-Perdue bill would do nothing to boost skilled immigration and it will only increase the proportion of employment-based green cards by cutting other green cards.  Saying otherwise is grossly deceptive marketing.

President Trump stated that he wanted to create a merit or skills-based immigration system like in Canada or Australia, but the Cotton-Perdue bill would not come close to achieving that goal.  The immigration systems in Canada and Australia do emphasize skilled immigrants over family members but their immigration systems allow in far more immigrants, as a percentage of the population in both countries, than the United States.  It is important to control for the population of the destination country when comparing the relative openness of different immigration systems. 

New immigrants to Canada who arrived in 2013 were equal to 0.74 percent of that country’s population.  New immigrants to Australia in 2013 were equal to a whopping 1.1 percent of their population.  By contrast, immigrants to the United States in the same year equaled just 0.31 percent of our population.  The only OECD countries that allow in fewer immigrants relative to their populations than the United States are Portugal, Korea, Mexico, and Japan.  Seventeen other OECD countries allow in more immigrants than the United States as a percentage of their populations.

In 2013, the number of skilled-worker immigrants to Canada was equal to 0.18 percent of that country’s population.  If the Cotton-Perdue bill intended to copy Canada’s skills-based immigration system, then it would increase the number of annual employment-based green cards from the current level of about 75,000 to about 592,000 annually – a 7.9-fold increase in the number (Figure 1).  If the Cotton-Perdue bill wanted to copy Australia’s skills-based immigration system then it would have to increase employment-based immigration to about 852,000 annually – an 11.4-fold increase.

More Family-Based Immigrants in Australia & Canada than in the United States

The United States’ immigration system favors family members over workers.  About two-thirds of all green cards issued annually are to immigrants whose qualification for being here is their relationship to American citizens or other green card holders.  This is in contrast to countries with so-called merit-based immigration systems that favor skilled immigrants, such as Australia and Canada.  Only 24 percent and 31 percent of annual immigrants to those two countries, respectively, gained permanent status through family connections.  Comparing the composition of the immigrant flow obscures important differences in immigration policy: Canada and Australia allow in many more immigrants than the United States does as a percentage of the population.

The United States allows in about a million lawful permanent residents a year, the largest number of any country, but that is a small percentage of the almost 325 million people who already live in the United States – about 0.3 percent annually.  By comparison, Australia Canada each allow in about 250,000 immigrants a year but they are much smaller countries with about 23 million and 35 million residents, respectively.  Thus, as a percentage of their populations, the annual inflow of immigrants into Canada and Australia is significantly larger than in the United States.  The annual number of immigrants to Australia is equal to 1.1 percent of the Australian population while the annual number to Canada is equal to about 0.7 percent of the Canadian population, which makes them 3.5 and 2.4 times as open to immigration as the United States, respectively (Figure 1).  If the United States were to copy Australia or Canada’s merit-based immigration policies, our government would admit about 2.3 million to 3.5 million immigrants annually.     

Figure 1

Immigrant Inflow as a Percent of Population, 2013

 

Sources: OECD, EuroStat, E-Stat, Citizenship and Immigration Canada

A Century of Precipitation Trends in Victoria, Australia

In the debate over CO2-induced global warming, projected impacts on various weather and climate-related phenomena can only be adjudicated with observed data. Even before the specter of dreaded global warming arose, scientists studied historical databases looking for secular changes or stability. With the advent of general circulation climate models, using historical data, scientists can determine whether any observed changes are consistent with the predictions of these models as atmospheric carbon dioxide increases. An example of the pitfalls in such work was recently presented by Rahmat et al. (2015), who set out to analyze precipitation trends over the past century at five locations in Victoria, Australia. More specifically, the authors subjected each data set to a series of statistical tests to “analyze the temporal changes in historic rainfall variability at a given location and to gain insight into the importance of the length of data record” on the outcome of those tests. And what did their analyses reveal?

When examining the rainfall data over the period 1949-2011 it was found that all series had a decreasing trend (toward less rainfall), though the trends were significant for only two of the five stations. Such negative trends, however, were reversed to positive in three of the five stations when the trend analyses were expanded over a longer time domain that encompassed the whole of the 20th century (1900-2011 for four stations and 1909-2011 for the fifth one). In addition, the two stations with statistically significant negative trends during the shorter time period were also affected by the longer analysis. Though their trends remained negative, they were no longer statistically significant when calculated over the expanded 112 years of analysis. In summation, in the expanded analysis the “annual rainfall time series showed no significant trends for any of the five stations.”

In light of the above findings, Rahmat et al. write that “conclusions drawn from this paper point to the importance of selecting the time series data length in identifying trends and abrupt changes,” adding that due to climate variability, “trend testing results might be biased and strongly dependent on the data period selected.” Indeed they can be; and this analysis shows the absolute importance of evaluating climate model projections using data sets that have been in existence for sufficiently long periods of time (century-long or more) that are capable of capturing the variability of climate that occurs naturally. And when such data sets are used, as in the case of the study examined here, it appears that the modern rise in CO2 has had no measurable impact on rainfall trends in Victoria, Australia.

 

Reference

Rahmat, S.N., Jayasuriya, N. and Bhuiyan, M.A. 2015. Precipitation trends in Victoria, Australia. Journal of Water and Climate Change 6: 278-287.

A 1,000-Year History of Eastern Australia Megadroughts: How Do They Compare with the Recent Occurrence of the “Big Dry”?

Drought is a common feature of climate; but every so often when a longer-lasting or somewhat severe drought occurs, it is not long before someone, somewhere, makes the claim that that drought was either caused or made worse by CO2-induced global warming. A simple test of this thesis can be conducted by examining the historic record of drought for the location in question. If it can be shown that similar (or greater) frequencies or magnitudes of drought have occurred in the past, prior to the modern increase in CO2, then it cannot be definitively concluded that the current drought is the product of anything other than natural climate variability.

Unfortunately, long-term historical drought records covering more than a few decades of time are lacking for most locations across the planet. As a result, scientists have sought to augment these short-term instrumental drought histories with much longer proxy records, records that will sometimes extend back in time several centuries to millennia. Such is the case in the recent study of Vance et al. (2015), who derived a 1,003-year proxy of historical drought in eastern Australia.

Sugar and the TPP

How much Australian sugar should be allowed to enter the U.S. market?  That’s a key question the U.S. government must answer prior to concluding the Trans-Pacific Partnership (TPP) negotiations.  The United States is the largest sugar market in the TPP, consuming about 11 million metric tons (MMT) per year.  It also is the largest producer (7-8 MMT) and importer (3 MMT) in the group.  Australia generally is believed to be the most cost-competitive sugar producer among the12 TPP nations.  It also is the largest exporter, annually shipping 3-4 MMT to other countries. 

To complicate matters further, sugar liberalization was explicitly excluded from the 2004 Australia-United States Free Trade Agreement (AUSFTA) due to U.S. political sensitivities.  Australian sugar producers understandably want to redress that omission.  Failure to obtain commercially meaningful access to the U.S. sugar market could lead to rejection of the pact by the Australian parliament.

The U.S. sugar program includes a price-support level for raw cane sugar of 22.25 cents per pound ($490/MT), with refined sugar supported at 26 cents.  Those levels effectively have been raised more than 10 percent to around 24.7 cents ($545/MT) and 30-32 cents, respectively, under the trade-restricting terms of the recent settlement agreement in the antidumping/countervailing-duty (AD/CVD) dispute involving imports from Mexico. (For more on U.S.-Mexico sugar issues, see here and here.)  Mexico is the largest supplier of U.S. sugar imports, generally providing between 1.0-1.5 MMT per year.  Suffice it to say that the agreement between the U.S. and Mexican governments will limit the amount of sugar Mexican producers can export to the United States, and also force that sugar to be sold at higher prices. 

With global raw sugar prices currently at relatively low levels of around 12 cents, Australian cane growers find the possibility of selling more sugar to the United States at high prices to be quite intriguing.  However, those sales currently are limited to the amount allocated to Australia under the U.S. tariff-rate quota (TRQ) regime – a modest quantity of only 87,000 MT.  Australia is asking that the TRQ be boosted by 750,000 MT, an increase of more than nine times.  The United States apparently has offered an additional 65,000 MT (official figure not disclosed), which would not even double Australia’s current access. 

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Government Officials Praising Unilateral Trade Liberalization

It doesn’t happen often, so I like to highlight it when it does.  Here is Australian trade minister Andrew Robb:

We’ve seen over the last thirty years in Australia that tariffs are down on average 2.7 per cent across the economy.  A lot of that was done unilaterally – we didn’t wait for the rest of the world and it’s one of the reasons that we’ve had uninterrupted growth for 23 years, because we are a very open economy. We’ve got to drive it further, we’ve got to be more competitive but so does the rest of the world.

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Unexpected Praise for Australia’s Private Social Security System

As part of my “Question of the Week” series, I said that Australia probably would be the best option if the United States suffered some sort of Greek-style fiscal meltdown that led to a societal collapse.*

One reason I’m so bullish on Australia is that the nation has a privatized Social Security system called “Superannuation,” with workers setting aside 9 percent of their income in personal retirement accounts (rising to 12 percent by 2020).

Established almost 30 years ago, and made virtually universal about 20 years ago, this system is far superior to the actuarially bankrupt Social Security system in the United States.

Probably the most sobering comparison is to look at a chart of how much private wealth has been created in Superannuation accounts and then look at a chart of the debt that we face for Social Security.

To be blunt, the Aussies are kicking our butts. Their system gets stronger every day and our system generates more red ink every day.

And their system is earning praise from unexpected places. The Center for Retirement Research at Boston College, led by a former Clinton Administration official, is not a bastion of laissez-faire thinking. So it’s noteworthy when it publishes a study praising Superannuation.

Australia’s retirement income system is regarded by some as among the best in the world. It has achieved high individual saving rates and broad coverage at reasonably low cost to the government.

Since I wrote my dissertation on Australia’s system, I can say with confidence that the author is not exaggerating. It’s a very good role model, for reasons I’ve previously discussed.

Here’s more from the Boston College study.

The program requires employers to contribute 9 percent of earnings, rising to 12 percent by 2020, to a tax-advantaged retirement plan for each employee age 18 to 70 who earns more than a specified minimum amount. …Over 90 percent of employed Australians have savings in a Superannuation account, and the total assets in these accounts now exceed Australia’s Gross Domestic Product. …Australia has been extremely effective in achieving key goals of any retirement income system. …Its Superannuation Guarantee program has generated high and rising levels of saving by essentially the entire active workforce.

The study does include some criticisms, some of which are warranted. The system can be gamed by those who want to take advantage of the safety net retirement system maintained by the government.

Australia’s means-tested Age Pension creates incentives to reduce one’s “means” in order to collect a higher means-tested benefit. This can be done by spending down one’s savings and/or investing these savings in assets excluded from the Age Pension means test. What makes this situation especially problematic is that workers can currently access their Superannuation savings at age 55, ten years before becoming eligible for Age Pension benefits at 65. This ability creates an incentive to retire early, live on these savings until eligible for an Age Pension, and collect a higher benefit, sometimes referred to as “double dipping.”

Though I admit dealing with this issue may require a bit of paternalism. Should individuals be forced to turn their retirement accounts into an income stream (called annuitization) once they reach retirement age?