Friday, August 20, 2010

Economists and Immigration

There's little doubt that one of the major news topics of recent years has been immigration.  It was an election issue, and will no doubt be a recurring issue.  Ed Balls is chipping in as he bids for the Labour leadership.  Politicians are falling over themselves to sound more and more like Joe Bloggs on the street, who is very concerned about immigration.

The Coalition government has taken steps to introduce its promised cap on non-EU immigration, and would, given the opportunity, do more.

But is this good for us?  What does economics tell us here?  It can tell us many things.  First, it begs the question: Why restrict?  By restricting the free movement of factors of production to their most productive uses, we must therefore end up with a less optimal solution.  The same or inferior output at higher cost, as we throw out the non-EU worker who was selected as the best person for that particular job.

Hard headed and brutal as it is, there simply is no economic argument for restricting immigration.  Let's think a little more about the consequences of restricting.  Poor quality British workers get jobs, they're protected, and have little incentive to be anything other than mediocre - they won't be replaced by that more highly skilled Aussie or Canadian because they are now ineligible for the job.

You will probably notice during your time even as an undergraduate in Birmingham that the overseas students you see amongst you are by some distance the most hard working and keen to learn.  They emerge with the better qualifications and knowledge, and are likely the more employable people.  But they won't be employable legally in the UK.  We'll be poorer as a result.

We'll be poorer because meals in restaurants will cost more and will be delivered by unmotivated, overpaid British waitresses instead of motivated and hard working immigrants.

I could go on.  The simple fact is, there are no good reasons for restricting immigration.  What about overcrowding, you might ask?  Well, there will become a point where migrating to the UK is no longer beneficial to people elsewhere, if we left things unrestricted.  The marginal benefit of doing so would be outweighed by the marginal cost.

We'd have more things produced because the world is not a zero-sum game.  If immigrants take some jobs, there are still plenty of others out there, and those displaced should be motivated to upskill themselves and find a new job.  If they aren't prepared, I don't want to know about them and I certainly don't want to hear their moaning - the kind of moaning that has secured the current anti-immigrant sentiment in this country.

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