High migration can suppress wages … in some places, some jobs

November 23, 2017

By Douglas Todd, Vancouver Sun |

The boosters of high migration to Canada claim it’s the key to economic salvation.

Critics counter that large numbers of immigrants and temporary workers “steal jobs” and reduce the wages of the host population.

The truth, it is turning out, is somewhere in the middle.

The answer to one of the most controversial political questions in Canada — does high in-migration depress wages? ­— is complicated.

There is little doubt that Canadian politicians’ decision to create arguably the most open border in the world increases Canada’s gross domestic product, the total volume of goods and services.

But economists are also finding some wages in some regions can be reduced by new immigrants and non-permanent workers. And Ottawa has been allowing in more of both in the past three years.

There is relatively little data on the effect on wages.

One complication is that migration affects incomes only in some regions. Most migrants go to Canada’s largest cities, such as Vancouver and Toronto, both of which have tepid wages despite astronomical housing prices.

Migration’s influence also varies by job sector. Canadian-born and recent-immigrant workers in low-wage jobs tend to suffer disproportionally from strong inflows of people, say economists.

Across occupations, wages also generally go down in the short term. They’re inclined to level out over time.

And immigrants from some countries do better than others.

University of B.C. economists Craig Riddell and David Green, and Carleton University’s Christopher Worswick, caution both boosters and critics of high in-migration to temper their rhetoric.

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