Economic Migration: Immigration Undercuts Workers
… argues James Wickham.
People who oppose racism and discrimination often feel the need to oppose restrictions on immigration. In doing these various arguments are advanced.
It is sometimes claimed that immigration increases GDP and is therefore ipso facto beneficial. for members of the existing society, the economy of which is being discussed, what matters is not the total size of the economy (the aggregate GDP) but the GDP per capita. The total size of an economy is not an index of prosperity. The focus of analysis should rather be on the effects of immigration on income per head of the resident population.
It is quite clear that the early mass immigration to Western Europe in the ‘trente glorieuse’ of the long post World War II ‘Fordist’ boom occurred when overall living standards were rising and income differentials were narrowing. The situation today is very different. Since the 1970s income inequality has been increasing in virtually all western societies. This is the crucial context for discussion of the economic consequences of immigration.
Initially at least, immigrants compare their wages and their working conditions with what they could have received ‘at home’ rather than with wages and conditions of native workers in their new country. Furthermore, they often see their stay in the new country as temporary, so issues like job security, promotion etc. are of less importance. This ‘dual frame of reference’ means that immigrants are prepared to accept wages and conditions that might be unacceptable to natives.
Mass immigration of unskilled workers undermines wages
In the current context the mass immigration of unskilled workers (or more precisely, of immigrants taking unskilled jobs) undermines wages at the bottom of the income distribution. The available evidence suggests that immigration has had a small negative impact on the lowestpaid workers in the UK, and a small positive impact on the earnings of higher-paid workers.
Skilled immigration is also a policy option for both employers and governments, a choice to ‘buy not make’. Despite all the rhetoric of the knowledge society, countries such as the USA, the UK and even Ireland can become dependent on the importation of skilled labour in the IT sector. Even more problematic is the dependence of the health systems of such societies on the importation of expensively-trained medical professionals from poorer countries.
Mass immigration may well also function to reduce the pressure for investment in education, training or other inclusive labour market policies. Most European countries have faced the paradox of high unemployment, especially youth unemployment, and mass immigration into low paid jobs. Immigration can allow governments to forgo labour activation policies to support groups who traditionally are most likely to become detache from the labour market – the disabled, the less educated, etc.
There is also evidence that immigration may undermine the social contract which has underpinned the European welfare state. It is plausible to argue that the more diverse – the more not like me fellow citizens are – then there is a corresponding increasing unwillingness to fund welfare which involves no only redistribution from rich to poor but also transfers to the young and old.
Furthermore, where integration occurs through the recognition of difference (multiculturalism) rather than through assimilation, this can further weaken this readiness to fund one’s fellow citizens now and in the future.
On this basis, it’s hardly surprising that among the most explicit advocates of continued extensive mass immigration are advocates of the deregulated free market.
Studies have shown that the economic or social benefits of diversity are probably restricted to specific situations and immigrant groups rather than an automatic consequence of all immigration. Any ‘objective’ economic justification for mass immigration thus turns out to be very, very debatable. The problem arguing that immigration is a “good thing” dependent on claims about evidence of its economic or social benefits is that if the empirical case collapses, then so too does the argument. However, this cannot happen if the argument is confined to the moral case.
Civil violence, war, ethnic cleansing, even genocide happen in countries just outside the European Union. In Syria, Islamic fundamentalists – facilitated by citizens from European countries – are now openly committing genocide.
These conflicts can hardly be ‘solved’ by migration. But when the victims and the refugees beg to be allowed to enter our zone of security, we should be proudly opening the gates – not because we think the immigrants will make us marginally richer but because it is the least that we as human beings can do.
James Wickham is a former Jean Monnet Professor of European Labour Market Studies and a Professor in Trinity College Dublin.