Immigration Could Fix Ireland's Housing Crisis Not Worsen It

With little breakthrough in peace talks between Russia and Ukraine, and fresh restrictions in major cities across China, the inflationary pressures worldwide are likely to get worse before they get better.
 
Clogged supply chains and growing geopolitical tensions are leading some countries to reconsider their borders and trade policies. Many economists believe, a period of de-globalisation could follow.
 
Being less dependent on others for energy, food or medical equipment might circumvent future supply shocks and lessen the risks of inflation. But such protectionist policies may also reduce incomes worldwide and embolden populism.

As France goes to the polls, far-right leader of the National Rally party, Marine Le Pen will be hoping her ‘France first’ and anti-immigrant policies can gain enough support to defeat the incumbent and centrist president Emmanuel Macron. One would hope given the atrocities in Ukraine and the resulting humanitarian crisis, that the French far-right might soften their stance on immigration. Polls show, however, Macron has just a slim 2 or 3% margin over Le Pen heading into the second and final stage of the presidential election on April 24th.
 
Immigration and housing
 
Closer to home, Ireland may face political challenges of its own with regard to immigration policy. The so-called “prefab villages” being discussed by government to house Ukrainian refugees are likely to cause controversy given, among other things, the cost to the state of over €2 billion.
 
While it’s clear an increase in immigrant population could severely worsen the current housing crisis in Ireland, policy nonetheless needs to recognise that in order to build more houses the economy needs more builders. Currently, due to acute labour shortages and high input costs for developers, Ireland’s housing crisis is at a dead-end.
 
One possible solution would be the immediate allocation of existing resources towards building major social housing schemes for immigrant workers. Workers with the required skillsets would be enticed to relocate to Ireland by paying subsidised rent to the state and very low-income tax. Such measures would also help drive down the costs of construction.
 
These programmes, radical as they might sound, have been common place throughout history. Ancient Egyptians, for instance, attracted labourers from different parts of the Middle East to help build the pyramids over 4,000 years ago.
 
Contrary to popular belief, these labourers were not used as slaves but as skilled architects, builders, painters and craftsmen according to research by BBC’s Science Focus. Animal bones found at archaeological sites show that the workers were getting the best cuts of meat while bread jars were also found, hundreds and thousands of them. Such “luxury” foods suggest that workers were very well treated by the Egyptians, the research shows.
 
In more recent times it was Irish, Italian and polish immigrants who built New York City during the early parts of the 20th century. The development of Dubai, now a global region for business, trade and tourism is another example of where immigrant workers, in return for a better life, relocated and built whole cities.
 
As it stands, the viability of the Irish government’s two flagship programmes, ‘Housing For All’ and ‘Slainte Care’ look destined for failure due to the acute lack of builders, doctors, nurses and medical staff. Indeed, the on-going staff shortages at Dublin airport, which is leading to long lines of passengers forming outside terminal buildings, is another reminder of how fractured some labour markets are in Ireland.
 
According to research by the United Nations, net migration in Ireland fell by almost 50% between 2019 and 2022. Since the pandemic, critical sectors such as housing, medical care and hospitality, have experienced the worst of the worker shortages. Policies that attract skilled labour back to Ireland are now vital to Ireland’s economic well-being.
 
Exports
 
Ireland also needs to think big with regard to its exports. While close ties to the US and Europe have benefited its export industries, Ireland should now be turning its attention to the emerging markets in Asia and South America. This is where the next economic superpowers are likely to emerge.
 
India, Vietnam, Brazil and Singapore, for instance, have been enjoying major growth in the last 10 years. New relationships within existing EU trade agreements, should be put in place between Ireland and these growing economies so Ireland benefits from their continued expansion. 
 
It’s no coincidence for example that Australia avoided the last 2 global recessions prior to the pandemic due to its close relationship with China. Australian economic policy shifted in the late 1990’s when it recognised China’s growing economic significance. In 1995 Australia’s exports to China were AUD $1 billion (or 3% of its total exports) but had grown to AUD $80 billion in 2019. Exports to China now account for over 30% of Australia’s total exports.
 
As is stands only 11% of Irish exports are sold to Asia and remarkably just 1% to Latin America. This is in contrast to 30% of exports going to the USA and 35% to Europe. There is clearly room for growth in these emerging markets especially considering that both India and Brazil are large importers of agri-goods and biomedical products - two of Ireland’s largest exports.
 
While some countries may choose to protect their borders, Ireland must do the opposite and pursue even greater openness. Over the next 5 -10 years the aim of the Irish government should be to encourage immigration and continue expanding trade routes overseas. Globalisation need not be a thing of the past.
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