Richard Boyd Barrett on Migration Data and AI's Productivity Risk

Apologies, I wasn't here for your initial contributions, but I was over in the Dáil speaking, so apologies. So therefore, if I repeat questions or issues that have already been dealt with, I apologise in advance. I know the Future 40, and we've discussed this, one of the things that you're concerned about is the demographic changes and essentially a reduction, I think, I understand, a reduction in the number of the working population proportionate to the dependent population, and particularly an ageing population. I asked some of our previous contributors on this subject about migration, inward migration, and how that can help ameliorate that problem. Because it seems to me that, you know, by and large, inward migration, or migration anywhere, tends to be the younger people, tends to be the more productive people. That was true of the Irish going abroad, and it's true of the people coming in here. But I wonder, is your department, and I ask this, and I think our committee should look at it, is it quantifying the contribution, the additional contribution, economic contribution, and sort of the tax contribution, and so on, of those who are coming into the country? Because, of course, we know it's a very controversial subject. Certain people are gaining political mileage by targeting migrants, I think in a disgraceful way, frankly, given our own history of migration, drawing distinctions between Irish migration elsewhere and migration to this country, as if there's much difference. In fact, there's no difference. There's no difference. Most Irish people went abroad, they worked, they contributed massively to the countries they went to, and the vast majority of migrants coming to this country work and make a massive contribution. There's always a few bad apples, there are a few bad Irish apples, there's a few bad apples coming to this country, but by in large, migration adds, not subtracts. But my question is, are you quantifying that? Are you looking at the figures, should you be, if you're not, so that we have an evidence base for the discussion about the impact of migration? So that's my first question. I have some more, but yeah, maybe start with that. Answer is yes. What? Answer is yes. We are working on it. The document is not finished yet, but we are doing analysis, as you said, the fiscal tax and expenditure of sort of migrants and different migrant categories. It is building on the work done by, I think the Danes did it, I think the Dutch have done it, and maybe one or two other countries. Australians have done it as well. So it follows a similar type of empirical approach. We're not there yet, Deputy, but it is work in progress, and once we have done it, we'll make it public. Yeah. One question, and you're probably going to laugh at this, but I'm going to say it anyway, right, is the boosting productivity gains will be critical for addressing the problems. And I ask this in all seriousness, as an economist, have you ever looked at Marx's theory of the tendency of the rate of profit to fall because of the rise, the changes in the organic composition of capital, right? And I say this in all seriousness because, you see, the thing about productivity, and I think this is going to become apparent with AI, potentially at least, is that you raise productivity by getting ahead of your competitors with the latest technology, okay? But the problem is, when everybody does the same thing, that's cancelled out, but you've now raised your costs, right? And you've reduced labour as a proportion of the equation. And as is now becoming very apparent, I think, globally, we're scrambling for labour, right? We've just said in the previous discussion how important labour is for actually addressing our problems. But simultaneously, there's a push, productivity push, to increase the proportion of technology and investment in technology, not labour. Right? His assertion was that this creates a long-term tendency for profit rates to fall. And I think there's some significant evidence to back that up. So, and if you look at AI, we could see this really coming through in a fairly dramatic way, right? In a fairly dramatic way, the replacement of labour with machines that cost a lot of money. If everybody has to do it, you've got to put a lot of money into this stuff, right? And when everybody does it, the first few in get ahead, maybe get ahead in the market. But when everybody has to fork out huge amounts of investment in this area, it's actually just becomes a massive additional cost, whereas it's impacting on those who are working, and indeed the amount of labour generally in the economy. So, it's a serious point, I think. I mean, whatever you think about Marx, he was a serious economist. So, what do you say to that? Well, I mean, I suppose my overall view would be that AI is certainly potentially transformative. Transformative, we need to think about, you know, it's going to complement labour in many people's view. In other words, it will boost productivity. But there is a view that it might substitute for labour, okay? So, there are concerns there. I don't fully subscribe to them myself. But if you look at previous industrial revolutions, I mean, there's a view that, you know, AI is industrial revolution number four. If you look at the first three, they were all really about boosting productivity. Everybody gained. Now, everybody didn't gain straight away. You know, the destination was good, but getting there was bumpy as people lost jobs, et cetera. So, there's a role for policy in kind of smoothing the transition, you know, the digital transition, et cetera. Where I think AI is maybe different to previous industrial waves is in the sort of its ability to do cognitive tasks and who might be exposed, okay? So, you know, you think of the spinning wheel, the computer. It was all really about automating sort of, you know, unskilled or semi-skilled type jobs. AI, I think, maybe is more about automating skilled jobs. So, there's no doubt it is going to be transformative for the labour market. But I do think there is a key role for policy in ensuring that there's reskilling, that there's upskilling, and addressing whatever sort of inequality disparities that might arise from that. So, I mean, to summarise, I think it's probably a good technology, but there are certainly some downsides, and we need to be conscious of the downsides. I do think you made a good point about some firms can, you know, there's sunk costs, the heavy costs, the high costs. You might have smaller SMEs under-adopting, and hence you might have winner-takes-all dynamics. But I think you can put in place guardrails to prevent that. It comes back to sort of competition policy, et cetera. So, that's why I do think it can be a force for good, but it needs to be done within sort of guardrails and having, you know... Thank you. Deputy Timmons, I'll give you five minutes. I don't actually need five minutes. I made my points earlier. But that was one thing that I said at the end there, just that ratio there about the number of workers per pension age. I think it was 116 to 100 currently, and 6.5 is 98 per 100. Just thank you very much, Deputy. On that one, we can come back to that directly, but I think that's in our central scenario, so it does shift at a different rate in some of the other scenarios. Yeah, it was just in the summary, that was all, yeah. Yeah, yeah. Now, that was all I wanted to clarify. I covered everything in my earlier contribution. Thank you. Do you want to come in for another five? The housing stuff, to give your view on the housing stuff. I mean, we need... I don't know what figures you're... But 60,000, I think, is a reasonable figure, isn't it? A year to meet housing demand. I mean, we have a particular view, which is we need a state construction company because we can't rely solely, let's put it that way, private operators are going to be in the market, right, or in the sector. I prefer sector, actually, to market. But to deliver the level of housing we need and the infrastructure to support the housing that we need, and if we don't do it, the stakes are very high, not just do we have a housing crisis, but also potential for investment, economic investment, so on, could be seriously, seriously challenged if we don't deliver on this front. I mean, do you think... Is there any consideration being given to the fact that if we rely to the extent that we are on the private sector to do this, where we could have big problems, because the private sector... It's just, apart from anything, it's cyclical in this area. We've seen it in the past. The boom and then the slump, the only investing when they're guaranteed to make money, and then even when they do deliver housing, huge amounts of it is totally unaffordable. I mean, a lot of the housing... In my area, almost everything that is delivered by the market is unaffordable for the people that actually need it. It's 600,000 to 700,000 average house prices now. So unless the state intervenes to address that, about 60% to 70% of the population in my area are excluded from being able to ever be able to buy on the private market. So I just wonder, have you had anything to say about that? I mean, just on state construction, I don't want to go into too much in policy. I mean, policy is not for a civil servant. It is for the minister and it's for government. But, I mean, I think it's clear that a combination of public and private investment is required. You know, I mean, it cannot be all undertaken by the public sector. At the moment, something like 2.25% of national income is being devoted to the housing side. And, you know, I think it's important to mobilise private investment as well. I think, and there are people who know more about this than I do and may be sitting at this table, but it's important to recognise that margins within the private sector are still very, very low. And that's one of the reasons why the VAT measure was so important in the recent budget. So, addressing the housing shortage, I mean, our numbers are based on, as you say, 60,000 units per annum by 2030 and staying there right out to 2040. Just one observation, and it's, again, not into the policy space. State construction company, I mean, there's a fixed amount of construction workers right now. I think it's 160,000. I mean, you need the workers to build the houses. Does it really matter if they're in the private sector or in the public sector? So, that just, that constraint needs to be borne in mind as well. And it's one of the reasons why I think productivity and modern methods of construction are so crucial in the delivery of the house. Well, I might just make the observation, because that is true, and if you don't have the workers, you know, it's absolutely true, but it is worth observing that we had 300,000 people working in the construction sector in 2008. Correct. And now it's down to, what did you say? I think it's 160,000. 160. So, there's been a collapse, which we've never recovered from, and if you talk to half the taxi drivers in this country, and I talk quite a lot to taxi drivers, on issues affecting them, a lot of them are ex-construction workers. And there's a lot of ex-construction workers out there, generally speaking, who've, you know, fled the housing sector because of the precarity of it, right? And, you know, that it was that cyclical thing. So, to me, that's the argument for having construction being a secure employment for people, for the state to take a lead in developing enough apprentices, but if you're going to encourage young people to go into it, then they have to know there's a secure, sustainable career path. And if they think it's going to go boom, slump, boom, slump, it's not exactly a very attractive option. So, it seems to me the state has to be aware of that. I would, and again, I don't want to go beyond my remit, but actually, I mean, if you're looking at construction now, I think you can reasonably say the government is going to be producing, at some stage, 60,000 units, and it will stay at that level for a very long time. So, it's much less precarious now, I would have thought, given the pent-up demand and given the actual demand for housing over the next 10, 15, 20 years. So, it's much less precarious, I think, Deputy, than it would have been, you know, at the peak of the previous cycle. Thank you. Thank you. Thank you. Thank you. You