Discussion thread: Impact of immigration on UK wages

Interesting comments yesterday sparked by BE, so more on the topic for today is in order.


Economics is hard and open to interpretation. However, since 2010 there have been around1.5 million new UK jobs created. At around 250,000 a year, more than the EU combined, albeit less than Germany and but Spain and Greece have seen big declines to the net is greater in the UK. Osborne's boast was technically true.


During that time the population has increased by just over 2.4 million (crazy eh!).


A proportion of the population 'growth' is really due to ageing of the population over pure immigration.


According to ONS date, net migration has been just over 1.25 million during this time. Which is why overall the UK unemployment rate has fallen - as job growth has been stronger than immigration (some immigration is for students too rather than pure job-seeking immigration, then again, official stats do not account for the black economy, which probably invalidates much of the data!)


Of course, immigrants doing jobs adds to GDP, so more jobs will beget more jobs to some extent. Economists calculations around this concept though are a severe overstretch of credibility however and they arrive a wildly varying conclusions, unsurprisingly aligned on the starting political viewpoint.


As ever though, nobody accounts for the fact that new jobs are increasingly lower paying than previously - this is the car washer effect. At the bottom of the wage stack, study after study shows wages being held down, even when the gaurdianistas are trying to prove otherwise.


Still too nobody has worked out how to account for the impact on the welfare state. As a proxy I can see the NHS spending is going up over 8% and yet the whole service is in crisis and the social welfare bill goes up even as the Tories are accused of hideous bedroom taxes etc.


Additionally, the tax income for the Government has grown at a far slower rate than the economic expansion would expect (i.e. below the expected net increase in GDP).


All this circumstantially points to the conclusion that overly open borders promote low-wage immigration which on balance detracts more than benefits the country as a whole; this is before we get to any social cohesion aspects.


Where the balance is, is hard to know and worse, because we can only ever look at historical data, we will never be able to get it right, Brexit or no Brexit.


What do you think?

Why is research so partial - EU Immigration report

If you had the time you could read the report for yourself, here it is. But the BBC, Robert Peston and the usual crew of lefty fellow-travellers are happy disseminating this fiction as the whole truth.

The soundbite being used is thus:

"the big point is that without the immigrants, our taxes or public sector borrowing would be measurably higher. Which, at a time when the government is failing to reduce the UK's unsustainable large public sector deficit at the speed it would like, seems of some relevance."
Robert Peston, BBC

Why is this so partial? Well the study is on a specific time period that ended 3 years ago for a start. In effect, it is measuring not quite the first 6 years on labour increase. Migration Watch have countered that if you use the information that is up to date, all of their conclusions change - the overall net cost if much higher and there is no net benefit.

Worse though is that EU immigrants are of course only half the of the issue. Non EU immigrants in this time period are 40% of the total. These immigrants are ignored, but their employment levels are lower and they have more dependents - so its is inevitable that they will cost more. Plus the more EU immigrants there are, the less chance other immigrants will have of getting the jobs generated by the economy.

This single fact is enough to discredit the report entirely. using only half the pool for analysis and then selecting specific time periods to fit your own narrative is very shoddy work. It's helpful anti-UKIP conclusion suits many of a certain view to jump on; but really, what is the point of such partial analysis?

Passports: Worse Than It Seems

The passports thing is an amazing nonsense, and symptomatic of worse.  Let's start with the present furore.  Isn't Teresa May on serious manoeuvres to be next leader of the Tory Party ?  Doesn't every ambitious minister ask their Permanent Secretary to keep them fully apprised on all the known bear-traps that can swallow them up out of a clear blue sky** ?  Doesn't everyone over the age of (say) 35 recall the previous passport chaos which came to a head in (IIRC) 2001-ish ?

For the record, that previous episode was solved comprehensively - presumably by the application of an appropriate amount of political will and, yes, resources (of whch a good project manager was probably the most important).  I had to renew mine in late 2001, by which time the system was working brilliantly; and then again in 2011, when I renewed by post and it came back so quickly I could scarcely believe it.  So it's been working fine until quite recently, at least as a mechanistic process.

We therefore conclude that, as well as May taking her eye off the ball, some idiot civil servant has taken resources off the job.  I'm guessing that demand for passports has increased steadily with the decade's worth of massive immigration; though it's not obvious to me why this should have mushroomed since my good experience in 2011.  We can't rule out dumb-insolent sabotage by the Yes-Minister brigade, of course (you want cuts, Home Secretary?  Leave it to us.)  Though that still doesn't explain May's indolence in her own cause.

But there's a bigger point, signalled by the important (though hardly surprising) Grauniad revelation that staff processing passport applications were told to relax checks in order to speed the plough.  

We know that's also how lengthening airport queues have been handled in the past: and from my vantage point of local politics (with the biggest Home Office processing unit based in the centre of my manor), I can assure you it's par for the course.  Other examples:  staff in many parts of the civil service that need to deal with passports and other forms of ID are left completely up in the air when dealing with documents not written in Roman script (which is of course rather a lot of the world's itinerant population these days) so they just nod them through none the wiser;  occasional spot-checks reveal there is rampant personation in citizenship exams, many of which are written papers or computer-based tests.

But nobody cares enough to put two and two together.  A big chunk of unwanted immigration (see all main political parties) could be switched off at the drop of a hat by simple attention to these details.  Are minor budgetary savings more important than this ?  I'd have thought this was 'flagship policy' stuff: Labour, yes Labour, are making hay with the Tories' failed promise to reduce immigration substantially. 

One way and the other, Teresa May has really screwed up.  Doubtless, Genius Osborne thinks this is all just fine and dandy, and his path to the top is all the clearer.   I'd say it disqualifies both of them.

ND

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** yeah, mixed metaphors, I know 

Anecdotal migration changes to the UK; Holiday edition

As the very eagle-eyed of you will have noticed, I have been away for a couple of weeks. Surveying new found lands and seeking to assist in creating property bubbles in new markets and economies. All in all, pretty good fun.

As a tiny aside I was waiting at the airport to return to the UK and as ever, the flight was slightly delayed. All around me I found myself half-listening to various conversations of those catching the flight back to Blighty. From a pure holiday destination I may add.

There were (and for this part of the flight, there were only about 30 people boarding) -

 - Two set of banker families from JP Morgan London who realised they sort of recognised each other. One was a chinese family and the other a US family. Both had sprogs and their conversation was around what part of Kent to move out to to try to find better schools than in the Isle of Dogs where they had been living until now.
- A striking Russian woman struggling with her elderly parents on her way back to Chelsea.
- A few Caribbean locals heading back to UK for work, seemingly to Birmingham where they congregate
- A polish (?) family heading back from a holiday
- A couple of elderly English couples heading home
- My family.

One can be proud of our multi-cultural enigma that is London and its economy, or marvel at how the UK is such an attractive place that people from across the world are so keen to make it home.

Where were the young English families though?  It was Easter, surely some had gone away for some Winter sun too?

The main thing that stuck me was just how different an experience that was from say 10 years again even, when that plane was filled with English people returning to London from holiday (I know, I was there too then!) with maybe a few locals scattered in. It's amazing how much has changed culturally in one decade.

CU