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August 11, 2006

Polly on Immigration!

Quite breathtaking today, really.

He said he wanted to limit immigration to balance "enhancing the economy of this country commensurate with our social stability". That is indeed the dilemma - more GDP v social justice for the low paid.

Social justice for the low paid. Yes, and who are the largest group of low paid people, people paid very much at the low end of the scale? Why, all those foreigners wanting to immigrate. So, if social justice is actually your bag you should therefore be in favour of immigration. It is increasing the pay of the low paid and thus aiding that social justice.

The only way that this could not be true is if, unlike I am sure a liberal internationalist like Polly, there is some way in which "not-Britons" are less valuable, less worthy of concern, than "Britons". If you did hold such views of course it is all entirely logical. You might even then go on to say that we owe no duty to those "not-Britons" in such things as foreign aid, climate change, war, famine and pestilence.

Either we are all human beings in this together, in which case purely nationalistic demarkations should play no part, or we are indeed nationalists and we should only consider our own. Which side of that argument you or I are on is not my point. Rather, that you cannot be on both sides at the same time.

Near-full employment should mean pay rises - but cheap imported labour helps keep it low. Studies purporting to prove immigration has had no such effect simply don't capture this invisible power.

The consensus opinion is roughly as Alex Tabarrok puts it here.

Immigrants do not take American jobs. The American economy can create as many jobs as there are workers willing to work so long as labor markets remain free, flexible and open to all workers on an equal basis.

Immigration in recent decades of low-skilled workers may have lowered the wages of domestic low-skilled workers, but the effect is likely to be small, with estimates of wage reductions for high-school dropouts ranging from eight percent to as little as zero percent.

As above,this is outweighed by the huge positive effect upon those who have immigrated.

Social democracy needs enough social cohesion to persuade people that everyone benefits when resources are more fairly distributed.

Oh, very much so. Which is why "We must be more like Sweden" is not really an appropriate political policy for the UK. We are hugely more diverse culturally and therefore do not have exactly that social cohesion necessary to make such a project work. We also attempt to make such things work on a national scale, in a centralized manner, which is really not how they do it there. Their version of State supplied health care is, for example, run by the counties, with taxes raised within an area paying for health care in that area.

Now, one thing that might make such a hugely more paternal (or matriarchal if you prefer) State work for us is localism. Devolve all of that welfare state stuff down to the level of the community and we might be willing to pay for more of it as we might indeed have enough social cohesion at that level to provide political support for it.

Or we might not of course, in whch case the people, the bastards, will have spoken. But it might work, for one interesting little fact is that Sweden has a higher ratio of immigrants to population than the UK does.

Really. 5.4 % to 4%.

Just for laughs:

John Salt of University College London measures the pull factor: there is a precise correlation between the number of people migrating and the difference between wages at home and wages in their destination country.

That has to be the most obvious research result ever. You mean to say, shock horror, that economic migration is driven by economic factors? Ooooh, say it isn’t so Missus!

Update: Chris Dillow points out that, according to the HOS model, immigration is near irrelevant. Trade has exactly the same efect on wages.

August 11, 2006 in Idiotarians | Permalink

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» Immigration: more confusion from New Economist
One or two government leaks, public ignorance, and the usual tabloid hysteria have ratcheted Britain's migration debate up a few notches in recent weeks. There have been a few voices of reason, but even those who ought to know better seem to be writing... [Read More]

Tracked on Aug 11, 2006 10:52:50 PM

Comments

Tim,

You describe Tabarrok as delivering the consensus opinion - that isn't actually so.

Those who did not sign his 'Open letter on Immigration' included Milton Friedman, Paul Samuelson, George Borjas, Stephen Roach and Thomas Sowell.

That's rather a lot of economic brain power.

And let's not even mention Paul Craig Roberts.

Posted by: Martin | Aug 11, 2006 8:53:30 AM

Martin, I've discovered that when people say "consensus" they often mean "consensus among the select group of people who agree with me".

Posted by: Jim | Aug 11, 2006 10:17:37 AM

Would-be serious contributors to the debate over immigration in Britain really do have to address the thoughtful commentaries of Frank Field MP and Professor Robert Rowthorn (economics, Cambridge) since neither conveniently fits the stereotpical pigeon hole for typical xenophobes. Try:

"The injection of large numbers of unskilled workers into the economy does not benefit the bulk of the population to any great extent. It benefits the nanny-and housecleaner-using classes; it benefits employers who want to pay low wages; but it does not benefit indigenous, unskilled Britons, who have to compete with immigrants willing to work hard for very low wages in unpleasant working conditions. . .

"In 2004, the most recent year for which statistics are available, 223,000 more people migrated into the UK than left it. Before Labour came to power, the number of people leaving Britain roughly balanced the number arriving, so the net contribution of immigration to population growth was modest. The total population of Britain was expected to remain roughly constant.

"At the present rate of 223,000 additional immigrants every year, though, and adding the children that they will produce, the population of Britain will grow by more than 12 million to reach 73.2 million by 2046. There is no parallel for such a huge influx over a mere 40 years in our recorded history.

"Most of the immigrants will settle in London and the South-East, because that is where the jobs are. There is already a chronic housing shortage in that part of England, a large portion of which is due to immigration. . . "
http://www.telegraph.co.uk/opinion/main.jhtml?xml=/opinion/2006/07/02/do0202.xml
http://www.civitas.org.uk/pdf/Rowthorn_Immigration.pdf

"'UK politicians are living on borrowed time' on immigration, a former Labour minister has said. Frank Field questioned whether current record levels of migration into Britain were 'sustainable'. And he told the BBC News website the UK was in danger of becoming a 'global traffic station' for migrant workers. He urged politicians on all sides to stop ignoring public concern on the issue before the BNP found a leader with the 'talent' to exploit it."
http://news.bbc.co.uk/1/hi/uk_politics/5119892.stm

"The UK should restrict the right of Bulgarians and Romanians to work in the UK when they join the EU, ex-Labour minister Frank Field has warned. He said the UK must 'impose barriers' until there was an EU-wide policy."
http://news.bbc.co.uk/1/hi/uk_politics/5231768.stm

Posted by: Bob B | Aug 11, 2006 10:30:53 AM

Tim,

Your ads still provide endless sources of amusement. In the midst of a(nother) rant directed at La Polla, what book do we see advertised in the sidebar?

"Hard Work", by .....

Polly Toynbee

Snerk!

Tim adds: I know, I saw that as I was proofing it.

Posted by: The Pedant-General | Aug 11, 2006 10:31:18 AM

Tim,

Glad to see that Dillow is honest enough to admit that the globalisation project's effects include making 'British wages converge towards third-world levels.'

The problem, of course, is that the economic model he's describing is not any form of free trade based on comparative advantage but one based on absolute corporate advantage, of the kind specifically critiqued by Stephen Roach.

Personally, I call it treason.

Posted by: Martin | Aug 11, 2006 12:47:44 PM

To address some of the quotes posted by Bob B:

"At the present rate of 223,000 additional immigrants every year, though, and adding the children that they will produce, the population of Britain will grow by more than 12 million to reach 73.2 million by 2046. There is no parallel for such a huge influx over a mere 40 years in our recorded history." Pure speculation. Why should the current rate of immigration continue? There are only so many Poles, Lithuanians etc. who want to emigrate and many of them are probably in the UK already. And, drawing a parallel with Spanish emigration to Germany in the 1970s, most of them will probably return to their home countries well before they retire.

"Most of the immigrants will settle in London and the South-East, because that is where the jobs are" Not true. Most of the immigrants are taking low-paid jobs in factories, hotels, bars etc. These jobs exist all over the UK.

Posted by: Scott | Aug 11, 2006 1:40:52 PM



The normal framework for a discussion of a UK economic policy is to consider the costs and benefits to the UK and ignore other countries.

So why criticize your favourite lady when she does just that in her piece on immigration?

James C

Posted by: james C | Aug 11, 2006 1:52:19 PM

Scott,

The immigration pattern you describe might play out in the way you suggest - on the other hand, it might not. I don't think you can disagree with Rowthorn's assertion about the scale of the current migration. Given the factors at work here such as the migration's scale, the decrepitude of the Polish economy and the unwillingness of the British government to mandate selection and then ensure that the less academically able can gain prtactical skills for their benefit, then there is no reason to assume that it will not continue.

His speculation is as valid as yours that they will return.

You are correct, however, in your assertion that migration's effect are felt across the country, not merely in the South East. In addition to the well known examples of Slough and Crewe, in the last two years the populations of Wrexham and Inverness have also increased radically through migration.

Posted by: Martin | Aug 11, 2006 3:02:13 PM

Re: Sweden

I don't know if you've seen it, but the Mises Institute has a good article on Sweden: http://www.mises.org/story/2259

I think we can learn from Sweden, but the lessons aren't the ones Polly draws...

Posted by: Tristan | Aug 11, 2006 4:42:00 PM

Re: Sweden

I don't know if you've seen it, but the Mises Institute has a good article on Sweden: http://www.mises.org/story/2259

I think we can learn from Sweden, but the lessons aren't the ones Polly draws...

Posted by: Tristan | Aug 11, 2006 4:49:54 PM

Scott: "'Most of the immigrants will settle in London and the South-East, because that is where the jobs are' Not true. Most of the immigrants are taking low-paid jobs in factories, hotels, bars etc. These jobs exist all over the UK."

Ahem. Compare:

"In 2001 minority ethnic groups were more likely to live in England than in the other countries of the UK. In England, they made up 9 per cent of the total population compared with only 2 per cent in both Scotland and Wales and less than 1 per cent in Northern Ireland. The minority ethnic populations were concentrated in the large urban centres. Nearly half (45 per cent) of the total minority ethnic population lived in the London region, where they comprised 29 per cent of all residents."
http://www.statistics.gov.uk/cci/nugget.asp?id=263

"45 per cent of the entire minority ethnic population lives in London. The area of the country with the second largest proportion of the minority ethnic population is the West Midlands (with 13 per cent). This is followed by the South East (8 per cent), the North West (8 per cent), and Yorkshire and the Humber (7 per cent)."
http://www.esrc.ac.uk/ESRCInfoCentre/facts/UK/index39.aspx?ComponentId=12534&SourcePageId=14975

According to the 2001 Census, 24.81% of London residents were born abroad.
http://news.bbc.co.uk/1/shared/spl/hi/uk/05/born_abroad/around_britain/html/overview.stm

Posted by: Bob B | Aug 11, 2006 9:24:30 PM

Btw in terms of the balance between revenues collected from resident taxpayers and identifiable public expenditures in Britain, the London region makes a positive net contribution to the national exchequer:

"The net contribution which development in Greater London makes to the national exchequer—currently estimated at between £10 and £20 billion per annum."
http://www.publications.parliament.uk/pa/cm200203/cmselect/cmodpm/492/492m20.htm#n43

"London is a major net contributor to the Exchequer: Our estimates suggest that London continues to be a substantial net contributor to UK public finances, by between £6 and £18 billion in 2003-04, despite the deterioration in public finances at a national level, with the mid-point of the range of estimates implying a net contribution of £12.1 billion."
London's Place in the UK Economy 2005-6
http://www.oef.com/On-Line%20Services/ClientsTriallists/LPUK05FULL.pdf

"London contributes upwards of £20 billion net each year to the national exchequer."
http://www.london.gov.uk/mayor/case_for_london2001/mayor_intro.jsp

"Twenty million people live within an hour and a half of central London. Its economy is bigger than those of Austria, Sweden or Russia."
Tony Travers of the LSE
http://www.newstatesman.com/200004100061

Anyone for joining the London Independence Party - better known as LIP?

Posted by: Bob B | Aug 11, 2006 9:59:32 PM

Tim

1. Mentioning that Polly is a 'liberal internationalist' is a means of saying she is confused on the issue; if she is so liberal and/or internationalist, why does she seem
overly-concerned with poor BRITONS at the
expense of non-Britons? This conclusion may come - perhaps inadvertently, I'll give you the benefit of the doubt - from one article she has written. However, she has written
consistently in other articles about GLOBAL justice, as opposed to justice for low-paid Britons. The article needs to be put in context (perhaps she should have put it in context herself).

2. I never cease to be amazed when free-marketeers spout compassion for the global
masses in their support for open immigration.
Are we supposed to believe that lower wages for working class Britons is the lesser of 2 evils (the other evil being keeping immigrants out in order to maintain higher wages for natives)?

Immgration flows need to be seen as part of a bigger picture - why are so many Mexicans desperate to risk their lives making the hazardous journey to the USA? Is it anything
to do with what free markets have wrought on Mexico's rural economy in the first place?
And what about the 'brain-drain' from developing countries - is this healthy for the long-term development of these countries?

The reason you support immigration is not out
of compassion but fear - fear of tightening labour markets and the increased strength of labour which goes with it.

Posted by: David | Aug 12, 2006 5:46:15 PM