Immigration And The British Economy

[richc]

Yes I don't disagree with you, I was arguing against this idea that 1 immigrant in work = 1 native out of work. That's just wrong. As I said myself it's more complicated. Re stagnant wages, I would argue that this is less because unskilled people can easily come to work in the USA, more that someone working in China can buy ship their goods to the USA for pennies. Globalisation, not immigration, is the more powerful force. Western countries with low migration (e.g. Italy, Japan) have seen their workers' wages stagnate too.

OK, fine, 1 immigrant in work = 1 native out of work is not true.

Is 1 immigrant in work = 0 natives out of work true? And specifically is 1 low-skilled immigrant in work = 0 low-skilled natives out of work also true, because that's really what's at issue here and the idea that it holds true is practically laughable given the 2.5 million people who are unemployed in the UK.

And, sure, globalisation is a problem when it comes to wage stagnation, but if wages are stagnating in the tradables sector due to competition from China, doing the same thing in the non-tradables sector through competition with immigrant labour hardly seems like a good idea.

Edited June 18, 2013 by richc

[TheCountOfNowhere]

OK, fine 1 immigrant in work = 1 native out of work is not true.

It is true when there are 7,000,000 natives in the queue for a job already.

[billybong]

One into work = one out of work is true at the point in time that the immigrant takes the job especially for low skilled work.

In time it's possible that more work might be created and likely that's true in the US as it's supposed to have more of a dynamic economy than the UK- although that dynamism seems to be declining.

In the UK however the opportunity to create more real work via a boost from new incomers has been completely wasted as in general UK job creation is based on non-jobs created by bureaucratic rule making and subsidized by massive and growing debt with the tax system used to redistribute and to fund it all and including new settlers/immigrants. Even then real unemployment numbers (not the bogus unemployment figures) have been rising rapidly for decades.

As new settlers have been coming to the UK in increasing numbers for some time now the general economy should be seeing the improvements already and be less reliant on debt - but it''s not it's getting worse as well as more and more congested.

Edited June 18, 2013 by billybong

[goldbug9999]

It is true when there are 7,000,000 natives in the queue for a job already.

Exactly. The elastic labour market theory claiming that the immigrant creates a new job is entirely bogus. If the labour market is so elastic then why isnt it already creating jobs for the millions of unemployed we already have ?.

In other words how does importing a low skilled worker magically manage to create a new job where the presence of one already here did not ?.

Edited June 18, 2013 by goldbug9999

[EUBanana]

Doh, point already made. Deleted!

Edited June 18, 2013 by EUBanana

[Tired of Waiting]

Exactly. The elastic labour market theory claiming that the immigrant creates a new job is entirely bogus. If the labour market is so elastic then why isnt it already creating jobs for the millions of unemployed we already have ?.

(...)

Because the natives would not be "better off" taking that job, considering our benefits system, including housing benefits.

BTW, that is also why we had so many vacancies back in May 2004 - when the Eastern Europeans were allowed to come.

BTW 2: It's our benefits system and high housing costs that create job vacancies that attract immigrants, and not the other way round.

[goldbug9999]

Because the natives would not be "better off" taking that job, considering our benefits system, including housing benefits.

In which case the extra "job" is a net loss to our economy.

[DabHand]

In which case the extra "job" is a net loss to our economy.

ls the increase in GDP per immie greater than the current GDP share per existing inhabitant? If it is not, then GDP may well be going up but we're all still getting poorer as the pie fails to keep up with pop growth. This wasn't clear from the op or discussion.

also nice one with the whole immigration can be good, therefore all immigration is good angle.

[Cardigan]

How many of those Muslim taxi drivers parked at the arrivals terminal at Mamchester airport paying tax. How many of those Pakistani taxi drivers (who are taking the jobs of Brits who could be driving those taxis) claiming welfare benefits, free education, free healthcare etc., Identify that cost and multiply it by a million and factor that into the equation! Then identify the negative impact their cultural values have on the cultital values of our forefathers whose blood sweat and tears built the country that give free welfare etc., and factor that into the equation!

[Tired of Waiting]

ls the increase in GDP per immie greater than the current GDP share per existing inhabitant? If it is not, then GDP may well be going up but we're all still getting poorer as the pie fails to keep up with pop growth. This wasn't clear from the op or discussion.

also nice one with the whole immigration can be good, therefore all immigration is good angle.

As I've posted before elsewhere, some data from the Department of Economics at University College London, about the immigration from the A8 accession countries pos 2004:

"in 2008-09 they totalled 0.91% of the population, and accounted for 0.96% of total government revenues."

"Immigrants accounted for a smaller share in government spending than their share of the population (for example 0.6% in 2008-09, which is far below their share in the overall population of 0.91%). Therefore, overall A8 immigrants made a net contribution to public finances."

The researchers think that the main cause is that these immigrants...

"have a higher labour market attachment than natives with a labour market participation rate of 95% for men (83% among natives) and 80% for women (75% among natives)."

And they think that the deeper reason is that this immigrant population has higher average education than the native population:

"We assign to the category "low education" all individuals who left full time education at 16 or earlier, the category "intermediate education" to all individuals who left full time education between the age of 17 and 20, and finally "high education" to all individuals who left full time education aged 21 or over. According to this classification, 32% of A8 men and 40% of A8 women are highly educated, while only 18% of native men and 16% of native women fall in this category. Conversely, the share of A8 migrants with a low education is around five times smaller than that of natives."

http://www.cream-migration.org/publ_uploads/CDP_18_09.pdf

Another interesting point is that all these numbers are actually quite small, around 1% or less. To much ado about very little really. Immigration is much more a red herring and/or scapegoat than a real problem.

.

Edited June 18, 2013 by Tired of Waiting

[Take Me Back To London!]

Russia Today. Migrant Migraine? 'London will look like Islamabad in 50 years'

Edited June 18, 2013 by Take Me Back To London!

[richc]

As I've posted before elsewhere, some data from the Department of Economics at University College London, about the immigration from the A8 accession countries pos 2004:

"in 2008-09 they totalled 0.91% of the population, and accounted for 0.96% of total government revenues."

"Immigrants accounted for a smaller share in government spending than their share of the population (for example 0.6% in 2008-09, which is far below their share in the overall population of 0.91%). Therefore, overall A8 immigrants made a net contribution to public finances."

The researchers think that the main cause is that these immigrants...

"have a higher labour market attachment than natives with a labour market participation rate of 95% for men (83% among natives) and 80% for women (75% among natives)."

And they think that the deeper reason is that this immigrant population has higher average education than the native population:

"We assign to the category "low education" all individuals who left full time education at 16 or earlier, the category "intermediate education" to all individuals who left full time education between the age of 17 and 20, and finally "high education" to all individuals who left full time education aged 21 or over. According to this classification, 32% of A8 men and 40% of A8 women are highly educated, while only 18% of native men and 16% of native women fall in this category. Conversely, the share of A8 migrants with a low education is around five times smaller than that of natives."

www.econ.ucl.ac.uk/cream/pages/CDP/CDP_18_09.pdf

Another interesting point is that all these numbers are actually quite small, around 1% or less. To much ado about very little really. Immigration is much more a red herring and/or scapegoat than a real problem.

.

Sorry, but, first, do you know anything whatsoever about CReAM, the source for your stats? Maybe you should have a look at their website.

Funding for CReAM research comes from a variety of sources, including the EC under FP6 and the Anglo-German Foundation.

Yeah, they're really going to publish research that contradicts one of the main policy planks of the EU.

Second, Christian Dustmann, the director of CReAM, was the source of the forecast that a grand total of 13,000 people would migrate from the A8 countries to the UK when New Labour dropped all limits on immigration in 2004.

It's hard to imagine how they could possibly have less credibility on this issue. I'm not a huge fan of ad hominem attacks on arguments, but these people aren't even trying to approach migration issues with an open mind. They're nothing more than a propaganda unit.

Lastly, on the point you bring up, go read the report issued by the OECD on the fiscal impact of immigrants. A8 immigrants might very well have a higher labour force participation rate than UK natives, but that's only because they're more likely (for the moment) to be working age. When they start to retire, the fiscal impact will be sharply negative because such immigrants generally earn far less (and pay far less in taxes) than native-born workers. Further, the following statement doesn't even make sense:

Immigrants accounted for a smaller share in government spending than their share of the population (for example 0.6% in 2008-09, which is far below their share in the overall population of 0.91%). Therefore, overall A8 immigrants made a net contribution to public finances.

Immigrants might account for a smaller share of spending, but it is a logical fallacy to claim that they're net contributors without comparing what their tax contribution is as well.

Edited June 18, 2013 by richc

[easy2012]

This is a bad myth, it's much more complicated than that. When an immigrant takes a job they also spend (most of) their wages into the economy, which generates an equivalent amount of economic demand and, in aggregate more jobs are created. There isn't a fixed amount of economic activity or a fixed amount of jobs. To give you another example, the population of the USA in 1900 was 76 million. It is now 300 million. Most of this rise is due to immigration - so how come the USA doesn't have 100 million unemployed?

Welfare state and open border/mass immigration are incompatible.

On its own, immigration with cultural integration is most likely to be a good thing, but throw in a welfare state and human rights where there are rights but no obligations then things get rather muddy.

[juvenal]

Ate lunch the other day at The Jailhouse Cafe, an eaterie run by prisoners at the Verne Prison on Portland, Dorset. Good food, service and fantastic views.

Looked up the prison (pop 600 inmates) on Wikipaedia on my return...

The Verne is a Category C prison for adult males. The population consists of life sentence prisoners and determinate sentenced prisoners, many serving four years or over. About sixty per cent of the prisoners are foreign nationals, with over fifty different nationalities represented.

I'm not aware that there is any specific policy to house non-Brits at the Verne....

Edited June 18, 2013 by juvenal

[Tired of Waiting]

(...)

Second, Christian Dustmann, the director of CReAM, was the source of the forecast that a grand total of 13,000 people would migrate from the A8 countries to the UK when New Labour dropped all limits on immigration in 2004.

Interesting. Link?

Immigrants might account for a smaller share of spending, but it is a logical fallacy to claim that they're net contributors without comparing what their tax contribution is as well.

You've missed the sentence just above that one. The full quote was:

"in 2008-09 they totalled 0.91% of the population, and accounted for 0.96% of total government revenues."

"Immigrants accounted for a smaller share in government spending than their share of the population (for example 0.6% in 2008-09, which is far below their share in the overall population of 0.91%). Therefore, overall A8 immigrants made a net contribution to public finances."

[easy2012]

It is not quite true when there are 7,000,000 natives in the queue for a job paying far more than UC already.

Corrected.

Edited June 18, 2013 by easy2012

[Tired of Waiting]

Ate lunch the other day at The Jailhouse Cafe, an eaterie run by prisoners at the Verne Prison on Portland, Dorset. Good food, service and fantastic views.

Looked up the prison (pop 600 inmates) on Wikipaedia on my return...

The Verne is a Category C prison for adult males. The population consists of life sentence prisoners and determinate sentenced prisoners, many serving four years or over. About sixty per cent of the prisoners are foreign nationals, with over fifty different nationalities represented.

I'm not aware that there is any specific policy to house non-Brits at the Verne....

I heard on Radio 4 that when adjusted by age group immigrants don't have a higher rate of imprisonment than natives. But I don't remember if they've quoted the original source though.

And in your example the "catchment" area is probably playing a role as well.

[gimble]

Exactly. The elastic labour market theory claiming that the immigrant creates a new job is entirely bogus. If the labour market is so elastic then why isnt it already creating jobs for the millions of unemployed we already have ?.

In other words how does importing a low skilled worker magically manage to create a new job where the presence of one already here did not ?.

The population of Sweden is 9 million, and about 4.5 million Swedes are in employment.

The population of the UK is 60 million, and about 30 million Brits are in employment.

The population of the USA is 300 million, and about 150 million yanks are in employment.

hmmm ... looks like the number of jobs is correlated with the population.

In your world there is a fixed number of jobs, which is a shame as, since there were no jobs in the UK in the year 10,000BC, there would be no jobs now and we'd all be unemployed.

Or consider this:

A UK couple have 9 kids. When those kids enter the workforce they are 'taking' jobs, creating unemployment. Doesn't sound right? It's no different to 7 immigrants (netting off mum and dad) from arriving and entering the workforce, except in the case of the immigrants the UK taxpayer hasn't paid for their education, we've got it for free.

The USA has had a population boom - there are about 200 million more in the USA than there were 100 years ago. With all those new people entering the workforce during this population boom, 'taking' the jobs of people already in the workforce, how come there isn't 75% unemployment in the USA?

[easy2012]

Ate lunch the other day at The Jailhouse Cafe, an eaterie run by prisoners at the Verne Prison on Portland, Dorset. Good food, service and fantastic views.

Looked up the prison (pop 600 inmates) on Wikipaedia on my return...

The Verne is a Category C prison for adult males. The population consists of life sentence prisoners and determinate sentenced prisoners, many serving four years or over. About sixty per cent of the prisoners are foreign nationals, with over fifty different nationalities represented.

I'm not aware that there is any specific policy to house non-Brits at the Verne....

I think you happened to go to the wrong prison. Overall, it is about 12%

http://www.parliament.uk/briefing-papers/sn04334.pdf‎

[Tired of Waiting]

Welfare state and open border/mass immigration are incompatible.

On its own, immigration with cultural integration is most likely to be a good thing, but throw in a welfare state and human rights where there are rights but no obligations then things get rather muddy.

Good point. I think it's even broader than that. A welfare state that pays more than our economy can afford is incompatible with ... reality! Without immigration we would just have more vacancies, and still millions would be better off on the dole and on housing benefits. We need cheaper housing, better education and a welfare state that doesn't pervert behaviour. Immigration is a consequence of these problems, not a cause.

[richc]

Interesting. Link?

http://news.bbc.co.uk/1/hi/uk_politics/2967318.stm

You've missed the sentence just above that one. The full quote was:

Yes, I did, but the point still stands that this isn't comparing apples to apples. The age profile of current immigrants is not the same as native Brits. When those immigrants retire, the fiscal impact will be sharply negative (even when using such a narrow definition of the fiscal impact of immigration). See the recent OECD report for the details.

[richc]

Good point. I think it's even broader than that. A welfare state that pays more than our economy can afford is incompatible with ... reality! Without immigration we would just have more vacancies, and still millions would be better off on the dole and on housing benefits. We need cheaper housing, better education and a welfare state that doesn't pervert behaviour. Immigration is a consequence of these problems, not a cause.

Without low skill immigration, wages for low skilled jobs would rise. The relative attraction of benefits would fall. Taxes would go down. The economy would be better off.

Just as the Lump of Labour Fallacy says that there aren't a pre-determined number of jobs in the economy, it's equally fallacious to argue that the number of vacancies would rise if immigration was limited.

Placing the blame on either immigration or the benefits system is irrelevant because it's the combination of the two that's creating the problem, but maybe it should be pointed out that the benefits system was in place first before immigration controls were significantly relaxed under Labour.

[richc]

Or consider this:

A UK couple have 9 kids. When those kids enter the workforce they are 'taking' jobs, creating unemployment. Doesn't sound right? It's no different to 7 immigrants (netting off mum and dad) from arriving and entering the workforce, except in the case of the immigrants the UK taxpayer hasn't paid for their education, we've got it for free.

7 immigrants joining the labour force is not the same as 7 young people educated in the UK joining the labour force. On the one hard, if they were 7 immigrants with PhDs moving from the Netherlands (somewhat unlikely), they'd have more of a positive impact. If (as is more likely) they were 7 recent graduates from a madrassa in a rural community in Pakistan, they'd probably have more of a negative impact.

Immigration of highly-skilled, easily-integrated workers is probably a benefit to the UK economy. The immigration of low-skilled, not-so-easily integrated workers isn't. When you add in the fact that the UK spends billions on topping up the incomes of the native-born low-skilled workers who are already here, adding to their numbers is mind-bogglingly stupid.

[tomandlu]

I think you happened to go to the wrong prison. Overall, it is about 12%

http://www.parliament.uk/briefing-papers/sn04334.pdf‎

Self-selecting. The prison with a high foreign population was the only one with a decent restaurant...

[Goat]

Immigration is bad news for people who are competing with the immigrants but good news for those who are not. If you're a journalist and large numbers of low skilled workers arrive it's great news because your morning latte is cheaper as is anything else that relies upon low wage labour. If you're a UK born low skilled worker it's not such good news.

It'd be interesting to see how the media would react if 100,000 journalists suddenly arrived in the UK and started pushing them out of jobs.