Financial Times Editorial - Migrants mean money
Financial Times Editorial - Migrants mean money
Copyright The Financial Times Limited 2006
Published: July 31 2006 03:00 | Last updated: July 31 2006 03:00
Pity the immigrant. On both sides of the Atlantic opponents of immigration are gaining strength. They have learnt to avoid the rhetorical heavy artillery of history, culture and race but have turned instead to economics to argue that migrants make natives worse off. The evidence does not match their claims.
One age-old argument is that with 7m unemployed in the US and 1.6m in the UK, migrants stop natives getting jobs. Of those natives, though, some are in the wrong place, some have the wrong skills, and others are simply between jobs. Academic studies suggest, if anything, that countries where migrants are welcome have fewer people out of work.
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Nor do migrants necessarily cut wages for the locals. True, if every arrival is a doctor, oversupply will lower pay for medics, and if every arrival is uneducated, natives without skills will earn less. But there is no academic consensus on the characteristics of immigrants and their effects: professors George Borjas of Harvard, and David Card of the University of California, Berkeley, have produced conflicting data, one suggesting that immigration is hurting the American poor, and the other that there is little effect.
A straw man much loved by the anti-migration lobby is the scrounger. Immigrants, we are told, come for health benefits and social security. Yet a study for Britain's Home Office found that migrants pay £2.5bn more in taxes than is paid to them in ÂÂbenefits.
One reason that immigrants arenet contributors is pensions. Most migrants are of working age and, in aging western economies, do much to support creaky public pension systems. Critics argue that migrants merely delay the problem until they need pensions themselves but this holds true only if developed country birth rates remain at their present lows; if they rise, as has happened in France, migration need only fill a temporary gap. Even if birth rates remain low, immigration buys time to reform pension systems.
Immigration does put pressure on transport and housing: it can cause congestion and push up house prices. The same is true, however, when the native populace has more children. Some population growth is valuable even if it does not increase income per head: Japan and Italy show what  happens if you try to maintain stable economic growth with a declining  population.
All of this said, the real economic value of migrants lies in the dynamism, innovation and drive they bring to an economy.
From Indian entrepreneurs in Silicon Valley to hard-working east Europeans in London, immigrants bring new ideas and a competitive edge. It is a hard effect to measure. But it tips the economic balance in favour of  immigration.
Copyright The Financial Times Limited 2006
Published: July 31 2006 03:00 | Last updated: July 31 2006 03:00
Pity the immigrant. On both sides of the Atlantic opponents of immigration are gaining strength. They have learnt to avoid the rhetorical heavy artillery of history, culture and race but have turned instead to economics to argue that migrants make natives worse off. The evidence does not match their claims.
One age-old argument is that with 7m unemployed in the US and 1.6m in the UK, migrants stop natives getting jobs. Of those natives, though, some are in the wrong place, some have the wrong skills, and others are simply between jobs. Academic studies suggest, if anything, that countries where migrants are welcome have fewer people out of work.
]
Nor do migrants necessarily cut wages for the locals. True, if every arrival is a doctor, oversupply will lower pay for medics, and if every arrival is uneducated, natives without skills will earn less. But there is no academic consensus on the characteristics of immigrants and their effects: professors George Borjas of Harvard, and David Card of the University of California, Berkeley, have produced conflicting data, one suggesting that immigration is hurting the American poor, and the other that there is little effect.
A straw man much loved by the anti-migration lobby is the scrounger. Immigrants, we are told, come for health benefits and social security. Yet a study for Britain's Home Office found that migrants pay £2.5bn more in taxes than is paid to them in ÂÂbenefits.
One reason that immigrants arenet contributors is pensions. Most migrants are of working age and, in aging western economies, do much to support creaky public pension systems. Critics argue that migrants merely delay the problem until they need pensions themselves but this holds true only if developed country birth rates remain at their present lows; if they rise, as has happened in France, migration need only fill a temporary gap. Even if birth rates remain low, immigration buys time to reform pension systems.
Immigration does put pressure on transport and housing: it can cause congestion and push up house prices. The same is true, however, when the native populace has more children. Some population growth is valuable even if it does not increase income per head: Japan and Italy show what  happens if you try to maintain stable economic growth with a declining  population.
All of this said, the real economic value of migrants lies in the dynamism, innovation and drive they bring to an economy.
From Indian entrepreneurs in Silicon Valley to hard-working east Europeans in London, immigrants bring new ideas and a competitive edge. It is a hard effect to measure. But it tips the economic balance in favour of  immigration.
posted by Carlos T Mock at 10:48 AM
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