No wages growth, but we keep pushing population growth

The HILDA report, released this week, showed that median disposable income in Australia dropped by $542 from 2009 to 2017, despite the fact that Australia has had the highest population growth rate in the developed world, other than tiny Luxembourg.

The Business Council of Australia (BCA) released a report in April entitled "A plan for a stronger Australia," that included statements such as:

The intake of permanent migrants should not be dramatically cut, rather it should be set to support population growth around the long-term average. The Business Council supports sustainable population growth in our cities and regions. (page 87/164)

In fact, immigration doesn't just deliver growth in an absolute sense, it also adds to growth per person. (page 86/164)

High population growth certainly hasn't delivered growth in disposable income per person, even as growth in profits has been substantial. The BCA tries to avoid the drop in disposable income, by always talking about increases in Gross Domestic Product (GDP)

They think they can fool us into thinking that if GDP goes up, we are all going to get richer. We're not.

In the past 20 years GDP has increased about 5.9% per year, but wages have increased only 1.6% per year during that time and recently not at all. Recently we've caught on that a big factor in GDP growth, was population growth. Now population growth spruikers have been using GDP/capita, which has been about 4.4% per year in the past 20 years. That still falls far short of your wages increase of 1.6% ($900 per year).

Even when their arguments are pathetically weak, the Business Council of Australia pushes GDP/capita like we are all getting rich. Their recent call for higher population says if we don't have high migration, our GDP/capita will be 7% less by 2060 ($5000), but we know that GDP/capita isn't wages. Wages are not going up.

The second reason is that inconveniences and erosions of our standard of living such as water restrictions, sitting in traffic, not finding a parking place close to the beach and waiting for service aren't included in the GDP. That is just your tough luck. Paying higher prices for housing, energy, food and metals (so most manufactured goods) actually makes the GDP higher, giving the impression that we are getting richer, when we are getting poorer. The path we are headed down is "work harder to buy less stuff," but the GDP goes up, so they think we will believe we will be better off. We won't.

The media has commented on the HILDA report in somewhat startled tones, but the Productivity Commission predicted this result in 2006. The study, Economic Impacts of Migration and Population Growth, concluded that:

Economic gains are mostly accrued to the skilled migrants and capital owners. The incomes of the existing resident workers grow more slowly than would otherwise be the case. (page 151)

The Productivity Commission also clearly explains why the BCA (read: the capital owners) are so keen to increase immigration and population.

The HILDA report highlights the state of Australian incomes and economic well-being, but doesn't cover some of the other impacts that population growth has on our standard of living. Water restrictions went into effect in Sydney on June 1^st. Make no mistake the reason is because Sydney's population has increased dramatically in the past 20 years. If Sydney's population was at its 1999 level, there would be no water restrictions.

This leads, of course, to the question: What is going to happen in another 20 years? The answer with respect to water is that we will have permanent water restrictions, much higher priced water, more energy guzzling desalinisation plants and bigger dams destroying more native habitat for our dwindling wildlife.

If that was the only erosion of our standard of living due to big business's and government's relentless pursuit of higher population, we could thank our lucky stars, but that is just the start.

First the other obvious ones:

• Housing prices will continue to climb (median house price in Sydney is up over 150% in the past 20 years) and we will be living in smaller houses with smaller yards or living in apartments with no yards, driving farther to work and spending more time on crowded roads.
• Speaking of roads, road tolls will continue to increase. Twenty years ago we squawked about a couple toll roads. Now they're everywhere. The tolls have increased far ahead of inflation and will continue to increase even as they get more congested.
• Train fares will increase. It is no surprise that the new Metro is much more expensive than the old Western Line. The Metro had to be built underground, that is a lot more expensive than above ground. Expect more of the same in the next 20 years.
• Rubbish collection and disposal costs will increase. As Landfills fill up and solid waste needs to be taken further and further from Sydney, the costs will increase.
• Sewage disposal costs will increase. As the volumes of wastewater increase, the impact on the receiving waters (the ocean and Hawkesbury Nepean River) increases, so better sewage treatment is needed. That costs money and that cost gets charged to the public.
• Congestion will be worse. Roads and trains will be more crowded. Travel times to work have increased 20% since 2002. Parks and beaches will be more crowded.
• Hospitals and Schools will be more crowded.
• Anybody remember when parking was free?

Maybe not so obvious:

• Energy prices will continue to increase. As fossil fuels become harder and harder to mine and pump out, the price to get them will increase. As the demand for energy increases with worldwide population increase, the price will increase even more. Energy prices have increased about 250% in the past 20 years, more than six times wages.
• Food prices will continue to increase. As more and more good farm land is taken for homes, roads and factories the cost of food will increase. As energy, water and fertiliser prices increase, food will be more expensive. Food prices have increased about 80% in the past 20 years, more than twice wages.
• Metals prices will continue to increase. Just like fossil fuels, metals are getting harder to dig up and there is more demand increasing the price. Metals prices have increased about 150% in the past 20 years, more than three times wages.

Often discussions of rapid population growth prioritise long term issues like koalas, melting polar ice caps, bees, refugees and whales with a belly full of plastic. Those are all very important, but maybe a bit disconnected from the day-to-day grind of the average Aussie. Every voter needs to understand that when the BCA talks about the economic benefits of high population growth, they are talking about their benefits, not the average Australian's. The average Australian is worse off with high population growth.