The Myths of Immigration Just Don’t Add Up
Jonathan Portes, Professor of economics and public policy at King’s College London, on why the UK has long been a country shaped by immigration and immigrants – and how the reality of this is not as bad as the rhetoric portrays.
Cheap labour from Eastern Europe pushes down wages, increases rents, and takes jobs away from British workers. Vote Conservative! Not Theresa May, but the MP for Bethnal North-East, Mancherjee Bhownaggree, an Indian immigrant himself, in 1895. The “foreign pauper aliens” he spoke of were mostly Jews.
Although recent immigration levels are unprecedented, in my new book, What Do We Know and What Should We Do About Immigration, I explain why the UK has long been a country shaped in many ways by immigration and immigrants, and that political controversy over – and hostility to – immigration is anything but new.
In 1955, Winston Churchill wanted to fight the upcoming election on the slogan “Keep England White”. And, while the right’s favourite “intellectuals” of today, like Roger Scruton and Douglas Murray, prefer to target Muslims rather than Carribbeans when they claim that immigrants and their children will never be really “British”, the continuity between Enoch Powell’s ‘Rivers of Blood’ speech and contemporary Islamophobia is obvious.
The Myth of Stealing Jobs and Lowering Wages
In the book, I look back over the economics, history and politics of immigration to the UK – but focus on the last 20 years, and how recent immigration has shaped our economy and society.
About one in seven of us were born abroad, up from less than half that at the turn of the century. So, does immigration reduce job opportunities for those of us who were born here? Push down wages? What is the impact of immigration on public finances and public services?
It is easy to make a simple, indeed simplistic, argument of ‘more workers mean lower wages. It’s just supply and demand’.
It seems obvious that, if an immigrant takes a job in the UK, there is one less job for a British worker. And in one sense this is true. But, that doesn’t mean that the overall level of unemployment goes up – that would only follow if the number of jobs was fixed. This is the so-called ‘lump of labour fallacy’. The same logic implies that encouraging women to enter the workforce would push up unemployment or that the Government could reduce unemployment by forcing people to retire early.
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Immigration adds to both supply and demand. If an immigrant gets a job, they will earn money, most of which will be spent. The business they work for may see its profits rise; that money has to go somewhere. The result is higher demand for goods and services in the economy, and hence higher demand for labour. Over the medium-to-long-run then, almost all economists think that the labour market will adjust. And a quick glance at the UK data confirms this. Over the period 1997 to 2017, the proportion of the UK workforce born abroad rose steadily to about 17%, but the unemployment rate is now about 4% – the lowest since the mid-1970s.
What about wages? Again, it is easy to make a simple, indeed simplistic, argument of ‘more workers mean lower wages. It’s just supply and demand’. Looked at in isolation, more workers might reduce wages, but immigration will also increase labour demand.
While immigration did not in itself ‘cause’ Brexit, it is difficult to imagine that the UK would have voted to leave the EU without it.
Overall, recent immigration may have depressed wages slightly for some workers, particularly lower paid or low-skilled ones, but not by much. One analysis found that a 1% rise in the proportion of migrant workers in the low-skilled service sector led to a fall in wages for UK-born workers in that sector of a little more than a tenth of 1%. While this was often cited during the Brexit campaign as proof that freedom of movement was indeed hurting low-paid British workers, the author himself, eminent economist Professor Steve Nickell, dismissed it as “infinitesimal”.
The Myth of Division
But while it is reasonably clear that the net impacts of migration are broadly positive, it is impossible simply to add up all the evidence on social impacts and come to a clear-cut conclusion, both because those impacts are more diverse and harder to measure and because some of them are subjective. But, equally we do have some evidence, both quantitative and qualitative, and it does suggest that some of the rhetoric is, at the very least, grossly exaggerated.
Most importantly, there is very little to substantiate the claim that the UK is becoming more segregated or more divided on ethnic grounds – overall, the opposite appears to be the case – or that groups are choosing to form self-perpetuating enclaves, physical, social or attitudinal. Fears about the wider impact of immigration – on public services, crime or ‘cohesion’ – are overstated. The UK has coped with the challenges of integrating large numbers of migrants reasonably well, and not just people coming here to work, but refugees and others. The UK is far from perfect, but from my perspective, the glass is (at least) half-full, rather than half-empty.
Nevertheless, the political backlash has been severe. While immigration did not in itself ‘cause’ Brexit and the UK’s current slow-motion political crisis, it is difficult to imagine that the UK would have voted to leave the EU without it. This also has parallels elsewhere, in the United States and in continental Europe.
The continuity between Enoch Powell’s ‘Rivers of Blood’ speech and contemporary Islamophobia is obvious.
Perhaps most worryingly, the backlash against immigration has both been exacerbated by and, in turn, worsened a general sense of alienation among large sections of the UK population. This, in part, was driven by economics, made worse by austerity, but perhaps even more so by cultural concerns, driven by geography, class and age. This is not just or even mainly about immigration, but it makes it far more difficult for politicians to formulate or implement sensible immigration policies.
But, I remain optimistic. Partly because I believe that, despite everything – xenophobic newspapers, cynical politicians and ‘respectable’ intellectuals and commentators who are quite happy to legitimise racism – the experience of the last two decades has been hugely positive overall, both for the UK and for immigrants who have made the UK their home.
Indeed, despite everything, public attitudes to immigration in the UK are at their most positive in decades. There is a window of opportunity to reset, not just immigration policy, but our broader perspective. This will take courage and initiative, not just from politicians but from the rest of us. It will be contested, messy and imperfect, just as in every previous historical episode. Nevertheless, I am hopeful that, if I come to revise my book in five or 10 years from now, I will still be able to paint a positive picture.