Saturday, 1 October 2016

Where’s the allegedly “huge” economic contribution made by immigrants?

There’s no question but that the ability to import skilled labour which is in short supply in the recipient country is of great value, which is not an excuse for grotesque and deliberate failure to train enough people as has happened with the UK’s health service over the last few decades. In contrast, there’s the question as to whether MASS immigration serves any purpose. Seems not to judge from the figures below.

Figures and charts, unless otherwise stated, come from “Characteristics and Outcomes of Migrants in the UK Labour Market” published by Oxford University’s “Migration Observatory”.

Employment rates for male immigrants in 2014 were 79% as compared 77% for male natives. Employment rates for female immigrants were 62% and 72% for natives (p.3).

Hourly rates of pay.

According to the above chart, there is little difference between immigrants and natives when it comes to hourly rates of pay (though there WAS a significant difference a decade ago). To be exact (according to p.7) there was no significant difference for females as between immigrants and natives in 2014. As for males, the hourly rate for migrants was £14.6 and £15.2 for natives.

Incidentally, the above mentioned higher earnings of immigrants up to a decade ago doesn't prove immigrants were making a big contribution in that period since employment rates among natives were well ahead of employment rates among immigrants up to about a decade ago (see above chart).

To summarise so far, employment rates for natives are about 5% higher than for immigrants, a difference almost entirely attributable to females. And hourly rates of pay for natives are slightly ahead of rates for migrants. So the claim that immigrants make a particularly big economic contribution is starting to look like nonsense.

The only saving grace could be that migrants work much longer hours than natives, but that doesn’t seem to be the case. The “Observatory” work does not give any figures for hours worked. However, a Channel 4 / IPPR work ("Britain's immigrants: an economic profile") gives some figures (for 2005/6). See table 5.5 reproduced below which is entitled “Average weekly hours worked, economically-active working-age population, by country of birth, 2005/06.”

Average hours worked for natives is 36.5 according the above table. As for migrants, no average figure is given, but I get the average for the six largest immigrant groups (table 4.1) to 37.6 hours.

Thus the slightly longer hours worked by migrants approximately cancels out their slighly lower hourly pay. So on that basis immigrants make no net contribution.

But that all leaves out an elephant in the room: one left out by almost every study of the economics of migration. That’s the fact that given NET immigration (numbers arriving in a country exceeding numbers leaving), the country has to create extra infrastructre. The cost of that infrastructure (roads, hospitals, etc) comes to several tens of thousands of pounds per person.

The cost of that new infrastructure is not of course charged specifically to the new arrivals: the country as a whole bears the cost. Thus the idea that there is anything to be gained from MASS immigration is nonsense.

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