Some people are fond of telling us that the problems of Britain are down to the many immigrants that arrive here, for example The Daily Fascist (aka The Daily Mail and The Daily Express).
Recently 'Migration Watch' blamed youth unemployment on migrants. And the Migration Advisory Committee, the governments own advisers, have today claimed that for every 100 non-EU immigrants 23 jobs are lost to UK residents. But can such views be justified?
Increasing the labour force by migration raises the capacity of the economy (the PPF/Long Run AS curve shifts right). Skilled migration will also improve productivity. Of course if the migrants are not of working age these advantages are not gained.
The National Institute of Economic and Social Research (NIESR) have simultaneously declared that there is no harm to jobs from immigration. Personally I am with them on this issue. The need to expand the supply side of the economy is most important and good immigrants provide a skilled workforce far faster than the education and training system.
Politically this one will not go away while unemployment remains high.
However much the labour force from immigrants helps our economy by shifting the PPF curve right we also need to think about where the money is going. Many immigrants come over in order to exploit the exchange rates and send their money home, increasing their purchasing power in whatever country they have traveled from, this creates leakages in our economy. These jobs in which most of the money is being sent to Poland in a brown envelope could be given to British workers who would consume in their home country and encourage British firms stimulating our economy.
ReplyDeleteOr the Poles could buy British goods boosting exports?
ReplyDeletebuy the British goods with a small portion of their income, they also may buy from polish shops, such as polish supermarkets and corner shops, hence adding the the cycle.
ReplyDeleteThey certainly will and you highlight an important point about migrant workers and the outflow of income.
ReplyDeleteAnother thing worth noting is that for non-EU migrants, the entry requirements are quite high, specifically designed to ensure that such migrants are of a quality necessary to ensure that their migration is beneficial to our economy. Something else mentioned in the BBC article is that for those migrants which have been here for five years there is no effect on unemployment, meaning that the labour market, despite an apparent outflow of income has adjusted to account for this immigration.
ReplyDeleteAs for the immigration from within the EU, although uncertain, the number of UK citizens living abroad is thought to be similar to the number of non-UK EU citizens living in Europe.
Another article by the Independent (found here: http://www.independent.co.uk/news/uk/politics/government-admits-eu-migrants-do-not-hurt-british-jobs-market-6287850.html ) reports that the same body (The Migration Advisory Committee) found that immigration from within the EU had a negligible, if any, effect on unemployment, which suggests that far from sending money home straight home, out of the UK economy, no noticeable change of outflow of income occurs, although it is likely that there were other factors.
The sentence in the article: "good immigrants provide a skilled workforce far faster than the education and training system." is ridiculous.
ReplyDeleteYes, immigration overall is good for our economy, but to suggest that we should basically ignore our education system in the hope that some immigrants will come and help us out is just lazy, and will not work in the long-term. What happens if a change in our exchange rate suddenly means all of our immigrants leave? Where would we get the skilled workers from to fill their roles, if we haven't put effort into our education and training system?
Nobody is suggesting that we abandon the education system, just that short term bottlenecks can be relieved by skilled migration.
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