Ireland is not full, it’s a myth
Ireland is not full. We don’t have an immigration problem. We have a capacity problem.
And that’s because of a decade of enforced austerity and low public investment after our financial crisis. We have chronic housing shortages, critical infrastructure gaps and public services near breaking point.
Rightly, Ireland has acted in solidarity with Ukrainians fleeing war. In addition, the number of people seeking asylum in Ireland hit a record in 2022. Arrivals from both sources have slowed in 2023, but together amount to a 2% jump in our population in just 18 months. Yes, this exacerbates our capacity problem. But, Ireland is not full.
We have one of the lowest population densities in Europe. If anything, Ireland needs more immigration, not less. Right now, the labour market is near what economists call ‘full employment’.
The good news is that workers have more bargaining power, and wage growth is starting to claw back some of the cost-of-living losses of recent years.
In the short term, the bad news is that there are not enough construction workers to build anything like the number of homes we need, never mind deliver on our ambitious retrofitting targets. In the longer term, like most advanced economies, we are going to need more workers than natural population growth is likely to generate if we are going to support our welfare state, such as it is, as our population continues to age.
Workers and their representatives can be forgiven for wanting a tight labour market if it means higher wages and more job security. Understandably, this motive has given rise to a degree of reticence about permissive immigration policies in labour movements over the years. But, the economic evidence doesn’t stack up.
It is not at all clear that immigration leads to lower wages or less job security for indigenous workers.
Just look at recent Irish history: 2007 and 2022 are the two years in which the highest numbers of immigrants entered Ireland.
In both years, unemployment was less than 5% and near ‘full employment’. Wages kept growing. Immigrants added to economic demand as well as to labour supply.
Turning to solutions, there is an argument for expanding the range of occupations eligible for the critical skills employment permit to attract workers in construction and related sectors. In the longer term, we will likely need more workers than we produce in care sectors.
These measures can help address our shortage in skilled migration. Of course, without investment in housing and critical infrastructure, an increased population would make other capacity problems worse. We need more of everything. More houses, more schools, more hospitals, more public transport, and more public servants to run it all.
Ireland still has a relatively small public sector by international standards, and it hasn’t kept pace with population growth.
Despite what one might think from the broad media coverage of a narrow minority of malcontents in recent times, Ireland has been, and continues to be, a welcoming place for migrants. For this to continue, we need sustained investment to address our very real capacity constraints.
But, we also need to reform our asylum system to make it fairer on applicants and less open to abuse.
Waiting times — through final appeal — can and should be slashed. Deportation is not realistic if an application has taken many years before reaching a negative conclusion, the applicant having meanwhile built a life in Ireland.
Of course, the corollary is that reaching rapid decisions could result in more deportations. This would be the upshot of a system working properly.
As set out above, channels for legitimate economic migration should be widened in parallel. Another upshot would be an immigration system that is fairer, more humane, and that can win broad support among those who are already here. This is how to neutralise the small minority of far right malcontents.
This article was written by Vic Duggan, freelance economist and public policy specialist for Liberty Newspaper. Download the paper here.