Economics And Migration

"In Britain new migrants from the EU contribute more to the exchequer than they take out." - The Economist, today.

This point is often made, especially by economic liberals. But what if we take a wider view?

That net financial balance relates to now (and by the way, it's not clear whether it factors-in HEW costs for dependents). But has anyone forecast the lifetime tax contribution of the incomer and weighed it against his lifetime claims on State expenditure? I'm asking because I don't know.

Coming back to the present, if an incomer takes work that could otherwise have been done by someone already in this country, should we include on the debit side some of the costs of keeping the latter unemployed? That calculation is not simple: there are ramifications in terms of physical and mental ill health, family breakup increasing the need for social housing and welfare payments, children requiring special educational provision, more spending on policing and the justice system, etcetera.

Also, if European-wide movement of labour is uncontrolled, the law of supply and demand means a downward pressure on wage rates. That implies less tax raised from workers overall, and following on from that (in a socially supportive economy) more financial assistance in the form of in-work benefits.

Is it that no-one has done the sums, or have they done so and are keeping quiet because it spoils the narrative for big business?

A different argument in favour of immigration is the one about demographics. I'm not saying the answers are easy. My general point is that we need a proper holistic examination of the issues.

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Kelvin Duncan 7 years ago Member's comment

Good points. It is certainly true that times of labour shortage result in higher wages and higher standards of living. One beneficial result of the huge death toll in Britain due to the Black Death was a shortage of labour. Wages rose dramatically, and serfs were able to become land owners in heir own right, so leading to the rise of the yeoman classes - land owning middle classes who spoke English, not French. Governments would be better to put their money into education and alleviating poverty than into socail services supporting migrants.

Rolf Norfolk 7 years ago Contributor's comment

Thanks for your comments, Kelvin, and the historical perspective. The argument that seems wilfully misheard, especially by the Remain camp, is that we need controlled immigration - not none, not all. The immoderate passion on both sides makes one doubt the value of direct democracy, but on the other hand our representatives appear not to represent us.

I also think that while education is important, we also need a national economic plan so that our deals are not so one-sided: we buy x from you, you buy y from us. I don't see many in Parliament who have the capacity to be deal-makers. They watch from the sidelines as iconic and strategic British businesses are broken up, sold off or off-shored; unless we stop the haemorrhage, this will not end well economically or socially.

Gary Anderson 7 years ago Contributor's comment

Open borders are just good business, not so good for the working guy.

Rolf Norfolk 7 years ago Contributor's comment

Hi Gary, thanks for commenting. I just thought the fiscal arguments might not stack up. And should a nation care for its people?

Gary Anderson 7 years ago Contributor's comment

I believe a nation should care for its people. If you don't put some controls on capitalism it will result in a weakened society, Rolf. :)