The British Government is running a programme of mass immigration into the UK. In response to criticisms of this policy, the Government claimed that immigration boosted the economy by $13 billion a year. It turns out, though, that the boost is only because of the overall increase in population. Per capita there was no economic gain, but considerable costs in terms of infrastructure.
From a report in the Daily Mail:
"One of Labour's key economic justifications for mass immigration is to be rejected by a major inquiry.
The headline figure used by Ministers against critics of the unprecedented influx of foreign workers to the UK is that they boost the economy by £6billion every year.
But the most in-depth study of its kind by a parliamentary committee will conclude this is not the best measure of the policy's success or failure.
In a blow to the Government, the House of Lords Economic Affairs Committee will say on Tuesday that the amount migrants boost the economy per person - rather than overall - is far more relevant.
Experts say this shows only a tiny net contribution to gross domestic product, worth as little as 28p per week.
This has to be balanced against the enormous strain they place on schools, hospitals and other series - valued at almost £9billion ...
The Treasury says immigrants supported 0.5 per cent of growth in the economy - worth £6billion in 2006. But, at the same time, they have added around 0.5 per cent to the total population ...
This means the contribution per person is roughly the same. But, at the same time, by adding to the number of immigrants in the country, there is more strain on public services.
The committee has also heard the costs to wider society of immigration could easily outstrip the economic benefits.
David Coleman, an Oxford University academic, puts the total annual bill to the taxpayer at almost £8.8 billion.
In a submission to peers, he said there had been an "absent-minded commitment" to increase the population by one million every five years.
Professor Coleman said the costs to the public sector include £1.5billion to run the asylum system, £280million to teach English to migrants and at least £330million to treat illnesses such as HIV.
Immigrant communities are overrepresented in the criminal justice system, he added.
Mass immigration also imposes "congestion costs, diverts investment to new infrastructure and housing, impinges on space and amenity and accelerates the output of waste and greenhouse gas emissions."
One of the Government's own advisers concluded Britain does not need any more immigrants.
Predicting unaffordable house prices and a risk of overcrowding, Lord Turner attacked Labour's "economically illiterate" case for mass migration.
He accused ministers of using arguments, knowing they do not stack up, to justify the influx of newcomers.
Lord Turner, a former CBI director, said: "In general, the language of an absolute 'shortage' of workers, of a 'need' for immigrants to fill gaps in the labour market, plays little useful role in the immigration debate and in most cases is simply economically illiterate." "
So it has taken them this long to realise that immigration is really just increasing the population, in a more costly way than breeding your own.
ReplyDeleteQuick on the uptake aren't they?
Then again, at least they are starting to discuss it, so I'll give them some credit.
Hey Mark,
ReplyDeletethought u might be interested in this story: http://www.news.com.au/story/0,23599,23446822-5007146,00.html
"In a blow to the Government, the House of Lords Economic Affairs Committee will say on Tuesday that the amount migrants boost the economy per person - rather than overall - is far more relevant.
ReplyDeleteExperts say this shows only a tiny net contribution to gross domestic product, worth as little as 28p per week.
This has to be balanced against the enormous strain they place on schools, hospitals and other series - valued at almost £9billion."
You may be interested to learn that the Australia's very own Immigration Department has just released a new propaganda paper extolling the economic 'benefits' of mass immigration. It cites a study claiming that a continuation of the 2002-03 Immigration Program would result in a GDP per capita increase of $852 ($16.38 per week) by 2021-22. Needless to say, the enormous strain placed on housing, infrastructure, services, the environment and social cohesion by admitting 100,000+ immigrants every year for a two decade period isn't taken into consideration.
Curiously, the Immigration Department's paper contains no mention of more recent economic research by the Productivity Commission, which showed that immigration would increase GDP per capita by only about 0.71% or $383 per capita by 2024-2025 (a paltry $7.36 per week). The Productivity Commission also noted that average hours worked per capita would increase by 1.18% by 2024-2025 as a result of immigration. That means that Australians would be working 1.18% more hours to earn 0.71% more money - a decrease in the hourly wage.
Perhaps the Immigration Department would like to explain how lower hourly wages will deliver an increase in living standards for native-born Australians. I guess they can't, and that's why they've chosen to completely ignore the Productivity Commission's less than flattering findings.
The Immi Department's propaganda piece can be found here:
http://www.immi.gov.au/media/publications/statistics/index.htm
Look at: http://ft.onet.pl/0,8176,uk_labour_fears_as_migrants_go_home,artykul_ft.html
ReplyDeleteDear Vanishingwhite Australian,
ReplyDeleteProductivity is the output of workers per unit of time. Therefore, Australian workers would not be working more to earn th extra 0.71%, they would be earning that extra working the same hours.
Also, an increase in working hours per capita does not necessarily mean that only those already working would be working longer hours. A large part of it would be unemployed people finding work, or people who want full time hours getting them.
Mass immigration does two things that are good from the point of view of some people. Firstly it inflates the labour market, and therefore helps to keep wages down. Secondly it increases demands for infrastructure and housing. This tends to suit those who own property - particularly investment property - as it means the value of their properties will rise, but labour costs will not rise, or at least not rise as fast. If the ALP were really the "Labour" Party, they would view mass immigration in an era of relatively high unemployment (compared with the post war) and high housing prices as being "reverse welfare", in that it enriches property owners at the expense (literally, through higher rents, and the necessity to take out enormous mortgages) "the workers" (or "working families" to use K.Rudd's overworked phrase).
ReplyDeleteThere is the "cultural" issue as well, but I'm leaving this aside for the moment.
To take the example of WA. The State government deliberately held up land releases in the first few years they were in office. This was supposedly for "environmental reasons". Their aim was to "promote" "higher density living". This meant that the old quarter acre blocks in some of the suburbs closer into the city would have a unit built at the back, or that several old houses would be bulldozed, and a set of units built on the old two or three blocks.
Obviously this sort of development wasn't going to put a lot of accommodation onto the market quickly, and is a piecemeal approach suited for times of small to moderate population growth. The trouble was at the same time, this same state government was doing all it could to encourage more people to move to WA, even to the point of lobbying the Commonwealth Government to ease immigration rules. Where did they think all these people were going to live? Tent cities in the public parks? Even when housing prices first started to take off in 2003, they held up new land releases, and it wasn’t until the start of 2006 (I think) that they made an announcement of 20,000 lots in a development in the south of the city. Up until then, they’d been chanting how wonderful it was for everyone (echoed by RIEWA, who definitely had a vested interest) that average housing prices were going up by 40% per year! Those on lower incomes are now really feeling the squeeze, and many who’ve bought houses are close to being over capitalised, and so feel the pinch at what is historically still a relatively modest rate of interest. It isn’t all their fault, of course. They aren’t responsible for the Sydney investors buying established homes in Perth (investors accounted for 60% or more of sales during the “boom”), nor are they responsible for the “skills shortage” nor the fact that in 2004 Midland brick shutdown all three kilns for maintenance exacerbating the “brick shortage”. However they could have released more land earlier, and thus tried to slow the market, and inhibit some of the speculative investment. However this is a case where a supposed “Labor” government has now developed a situation where lower paid workers now struggle to keep a roof over their heads, in a time of “boom”, and where this property price hike has spilled over into inflating other prices as well.
I suspect that much of this is wilful blindness, as many of these people have investment properties, and thus benefit from the boom. Cries such as “anti-racism” and “multiculturalism”, and “environmentalism” as well as the smug moralisation that accompanies them is a convenient smokescreen for pursuing these policies but still appearing to be “left wing” and “supporting” those “down the social scale”.
As far as Britain is concerned. They’ve “imported” a workforce. There has been a lot of jobs growth in the UK, but most of these have been taken up with immigrant workers. It has been claimed that this also suits a political agenda of having a greater constituency of voters dependent upon welfare, as this makes the welfare state difficult if not impossible to cut due to the enormous political lobby dependent upon it.
I’m not opposed to all immigration, but the on going “mass immigration” as an end in itself is a policy that must stop. The government is continually claiming that they can’t afford massive new infrastructure, hence the need to privatise public utilities. Fine. But then how can they afford massively increase the population? Population growth by immigration has higher immediate demands on infrastructure than “natural” growth as adults require public transport, and above all accommodation for themselves, whilst children live with their parents until they’re of age. Furthermore, immigration does not solve the issues of an “aging” population, because this is due to a generation imbalance which immigration doesn’t actually solve. In the post war, unemployment was for the most part under 2% (and the goal posts have been moved to make current unemployment look better in comparison with these past figures than it is), but in those days the immigration rate was supposedly set by the country’s economic capacity to absorb immigrants. Since the mid to late 1980’s mass immigration has been touted as the “source” of economic growth. Some of this is due to certain political lobbies seeing immigrants as a collection of political “virgins” whom they can harness to their cause, and so boost the number of tribal supporters they have. Others seek to use immigrants to pursue policies of cultural change (if not cultural revolution). But there is also an element of economic self interest as well. Not benefits to the country as a whole, but personal benefits in making one’s self better off at the expense of many in the community. This last point is one that has to be spelled out again and again.
2008-03-27 "The French organization Contribuables Associés (Associated Taxpayers) has published a study on the real cost of immigration ...
ReplyDelete- Immigration reduces by two thirds the growth of the GNP.
- The cost of immigration in France is 71.76 billion euros.
- The revenue from immigration in France is 45.57 billion euros.
- The deficit from immigration shouldered by the taxpayers is 26.19 billion euros....."
70% of migration to Australia is skilled immigration. These people come to fill our skills shortages.
ReplyDeleteWith even less tradespeople, nurses, doctors etc, we would all suffer. We would have to pay even more for trades services and would not get adequate levels of health services, just to name two areas of skills shortages.
If you want to blame govt's in Australia, blame them for not investing enough in these areas, and for instead turning many uni's partly into worthless arts degree factories.
From what I've seen, of the UK work environment, alot of workers could be worked harder and paid more.
ReplyDeleteBritain has never really followed the Continental/Australian philosophy of a fair days work for a fair days pay.
It's productivity rates reflect this.
Note also that the immigrants of the 50s and 60s are now even less keen to do low wage jobs than the natives they supposedly replaced.
Leon Bertrand,
ReplyDeleteThe "current" intake is about 70% "skilled" (that could also include people with practically worthless degrees like "Gender Studies" - I once saw a documentary lamenting how Australia was mistreating and snobbishly refusing to recognise the qualifications of some immigrants. One of the examples was an Indonesian Law lecturer who drove taxis - except that Indonesia uses a different legal system, and his qualifications, however eminant they may be in Indonesian Law, make him about as qualified to deal in Australian law as being an automechanic makes one qualified to be a surgeon). How likely is this to continue under the "K.Rudd" Government? Howard did drive a focus on skills based immigration, and away from the more "social" based system that Keating championed.
The excessive focus on University is bad for the country, particularly as much of the increase has been in rubbish degrees. There hasn't been an uptake in geunine engineering or science courses either - the government COULD make these courses free, as this might encourage more and better students to consider them - but I suspect that Hell will freeze over first.
Allowing the old apprentaceship system to erode away was one of the worst decisions in Australian history, and we are paying for it now. However don't imagine that those Phillipino "guest workers" are exceptionally skilled - more that they're cheap.
I suspect that in Britain if pay was more based upon productivity, that there would be a lot more work done. However I wouldn't over estimate how well Australia does in this. The hardest workers in Australia tend to be self-employed people like building contractors who can move onto a new job as soon as the first is complete, however anacedotal evidence in Perth would suggest that many have slacked off completely.
As I've said, I'm not completely against immigration, but if you look at the statements of Hawke and Keating, and some of the luvvies hiding behind Rudd, you get the impression that for them immigration drives the economy, rather than the other way round, and that mass immigration is something to be pursued for its own sake.
Anon wrote: "Howard did drive a focus on skills based immigration.."
ReplyDeleteThe downside of Australia’s emphasis on skilled immigration is that East Asian immigrants are gradually pushing native-born (white) Australians out of the managerial and professional classes.
From Dr. Peter Wilkinson's The Howard Legacy:
"In selecting skilled immigrants, those who have done a degree in Australia receive bonus points in the criteria for acceptance for residency. In effect the policy selects those Asians who have higher cognitive ability, predominantly ethnic Chinese. In the ‘knowledge economy’ of today a premium is paid for qualifications and cognitive ability. They and their children (who will inherit their higher intelligence) will fill the professional and managerial ranks in Australia. They will dominate the cognitive class and hence have disproportionate influence in the country. This has important ramifications for both internal and external policies as ethnic demographic change continues."
I'd agree with that RD. We constantly hear about how well such people do, but ignore the fact that it is generally the educated elite of such societies that are able to get into Australia.
ReplyDeleteBut if you're going to have mass immigration, you have to have it in areas where the country is genuinely short of people. It isn't a real solution to the shortage, just as immigration isn't really a solution to an aging population. Immigration only really boots the overall population.
The big issue with East Asian immigration is the extent to which they tend to form cliques in parts of south east Asia which tends to dominate the economy. This can mean that once they come to predominate in the managerial sense, it may be hard to dislodge their dominance. This, however, is a social rather than an economic one. The point is that in an era where there are fewer and fewer lift and carry jobs, where most jobs growth (productive jobs anyway) requires either semi-skilled or highly skilled people, tradesmen and professionals, mass immigration of unskilled means bringing in people who are net consumers of goods and services. Basically, they consume more economic value in their demand for goods and services than they contribute to the economy (this is on average of course). We often forget that the infrastructure in a society like Australia or Britain is the cumulative effort of generations, and this includes the schools and universities. An immigrant gets the use of such things without having the cumulative effort of having to pay for them, or being the child of those who have. Hence an immigrant has to produce a greater economic return than an average "local born" to provide the same net return to society. This has been written at ad nausium, and I apologise for not being able to provide a link.
Australia has a deficit of experienced chemical engineers, piping draftsmen, piping engineers, electricians, and even bricklayers and plasterers. Hence the pay rates for these people has risen substantially, and immigrants in these fields (as well as medicine and others where there is a shortage) can produce sufficient economic value to pay the "infrastructure deficit" and still be net contributors.
This is to see things in purely economic terms. The social costs of mass immigration, of "multiculturalism" and all these other "culturally progressive" measures probably will have a significant, and negative, economic cost down the track, but this is not easy to quantify in unchallengeable terms.