The Optics Trap: New Zealand Launches Investor Visa, Sunsets Entrepreneur Visa

Last week the Immigration Office for New Zealand announced the Investor Visa, a fast-track to permanent residency with a corresponding $1MM NZD (~587K USD) or $2MM NZD (~1.17MM USD) investment getting you on a 3-year or 1-year fast-track, respectively.

I think this is a great example of the optics trap that will plague pretty much every OECD government over the next 10 years.

On the one hand, New Zealand, like many other developed nations, is short on labor. It's facing demographic collapse, or as one writer put it, a hollowing out of the middle of the labor force as younger and increasingly older folks leave for greener pastures.

To mitigate this, governments will create incentives programs to attract "palatable immigrants." These are high-earning, often "culturally-aligned" foreigners. To ensure palatability, high standards will be set, like the $5MM golden visa in the States or this $2MM NZD investment visa here in NZ. While the # of people globally who this program is targeting is miniscule, that's an entirely separate issue.

The real problem is that New Zealand doesn't need high net worth individuals it needs a massive middle class. Tens of thousands of farm and dairy workers, bank tellers, and retirement home nurses, in fact. Foreign-born immigrants that are ready and willing to do these types of jobs, surprise surprise, are not high-earning -- nor are they culturally-aligned.

So now we have the optics trap. Governments will sell policies like this to address population shortages, knowing that if they import foreign-born workers that society actually needs there will be mass protests and unrest: see Japan and the UK this week. However, those very policies won't address the actual demographic issues, leading to ever worsening economic decline and stagnation.

Good luck OECD immigration ministers...you're gonna need it!