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Immigration skews the UK economy

I hope that policymakers will be reading the report from Ernst and Young's ITEM Club this morning.

According to the Telegraph,

"The study found that although the recent influx has boosted Britain's economy and kept inflation low, it may have increased unemployment for younger Britons and reduced pay increases for all. Since 1997, 1.5 million foreign workers have entered the British workplace, with many of these arriving from Eastern Europe in the past three years since the European Union expansion. This new group typically earns 40 per cent less than British workers.

Since 2004, the number of unemployed British 18 to 24 year olds has increased by 100,000, according to the study. "There is some evidence that the growth of immigrant employment seen in the last few years may have come at the expense of the domestic workforce," the report concludes. "Given the age and skill profile of many of the new immigrants, it is possible that 'native' youngsters may have been losing out in the battle for entry-level jobs.""

However, it also points out the following 'benefits' to the UK economy:
  • The typical British family has saved thousands of pounds a year in mortgage repayments as interest rates are calculated to be up to 1.5 percentage points lower than they would have been without immigration.
  • New immigrants have pushed down inflation, staving off Bank of England increases in interest rates.
  • If immigration continues at the same rate as the past two years -190,000 net immigration a year - the economy will grow by about three per cent annually. Without immigration this would fall to 2.2 per cent, knocking £10 billion off the growth in the economy.
So much for the Brown economic miracle under Labour, which seems to be largely dependent on the role of immigrants in taking jobs at a lower wage than the UK worker.

This economic cushion has also stopped the Government from making hard decisions over the development of the economy, especially in terms of skills.

At a time when education is more important than anything to a knowledge-based future, we are experiencing a growing underclass of young people who cannot get jobs because they are being undercut in the marketplace by literate, talented immigrants who are prepared to work long hours for less money.

Immigration has been a blessing for the UK economy in the short term, although it may be a curse in the long term if we continue to ignore the plight of young people who clearly need training and education to develop the skills needed by businesses across the UK.

Comments

Anonymous said…
how refreshing to hear someone with the guts to tell the truth that immigration is only a short term fix because as a nation we couldn't be bothered to invest in our young people's future because we are more interest in short term gain.

Well done Dylan keep up the good work.
Anonymous said…
Dylan, your cringeworthy use of you economic 'expertise' has reached a new low - this really is the scraping of the barrel. People don't want to do the jobs that these immigrants do, and that's why immigrants are 'stealing' these jobs. Unskilled and low-skilled work is low paid, and that won't change by throwing out any immigrant.

You know very well that this is how the economy works to find an equilibrium. A carefully structured argument about upskilling and more guidance from schools to the job market in this country would be something I could respect. Your racist cod-economics about undercutting the British worker disgust me.

If you spent less time building shoddy xenophobic arguments on faulty economics, and more time working on you bona fide academic research, it would be no bad thing.
Like any academic, I am happy to discuss the economy with any individual but Rhydian has gone too far this time.

However, in the spirit of Christmas, I am kindly going to give him the opportunity to withdraw his defamatory comments that I am a racist and a xenophobe.

As he ponders this, he may also wish to read the following quote:

“Because they work for lower wages, a Home Office study in 2003 anticipated that between 25 and 60 local workers would lose their jobs for every 100 migrant workers coming. That’s exactly what has happened: in the two years since spring 2005, 540,000 foreign people have taken up jobs while 270,000 local people have lost their jobs.

“According to a recent study for the Organisation for Economic Co-operation and Development, this effect on unemployment can continue for between five and 10 years. But who fares badly from this?

“With any mass immigration – be that the rich to the countryside or cheap labour to Llanelli – it’s the people at the bottom who suffer.

"Somebody, somewhere must speak out for them. The point is, this is an economic issue, not one of racism or xenophobia. Of all the people I have spoken to on the doorsteps in Carmarthenshire, none of their comments have been xenophobic towards the Poles who have come to live locally".

That was Adam Price writing in Golwg in November 2007 and making exactly the same points that I did in this article. If he wants to send similar libellous remarks to Adam, then I am happy to pass on his email address.
Anonymous said…
Well Dylan, I would hasten to point out that I did not call you a racist or a xenophobe - as someone who does not know you, I am not in a position to make such a judgement. I sincerely apologize if you feel that this did paint you in that light.

What I did point out was that this blog entry had racist and xenophobic overtones. As a staunch enemy of racism, I felt that it was a democratic duty to call you on this - even if you had no racist intent, which I am sure that you did not, this is an issue that the BNP and their like have thrived upon, and your language in this piece does not help.

You point to Adam's recent article - and yes, you are right to do so. This article pointed out the economic dangers of immigration, and there are many - and this is an issue on which we should not remain silent, as this encourages the far-right to take advantage of the issue.

However, when you talk about 'undercutting', a long-term 'curse', and the resulting 'plight' of UK youngsters, this will only encourage the far-right. And when you quote an article bemoaning the recent 'influx', what more is there to say.

So, yes, I apologize if I have inadvertently painted you as racist. I also encourage you to continue writing on the issue of economic migration - it is important that politicians and economists reclaim the issue from the far right.

However, I urge you to choose your language more carefully in future. I also ask that when you do use your undoubted economic expertise to analyze a situation, you do not quote reams from the Telegraph to support your point, but that you use real evidence from more than one source, as you would in an academic paper.

Lastly, I apologize again for being so virulent in my article - I had not meant to sound so angry, although my central point still stand. As the son of an immigrant South Africa apartheid, I get quite wound up when reading about an influx!
Anonymous said…
correction: immigrant from South Africa under apartheid
Apology accepted.

Nadolig Llawen from another staunch enemy of racism.
Anonymous said…
Thank you, and for giving me the opportunity. I have the bad habit of taking issues to heart - as an aspiring politician, I should probably learn to keep the passion in check! Ah well, with age comes wisdom...

By the way, do not let this come between you and writing more on economic migration - I enjoy reading your blog and economic analysis most of the time, I urge you to confront immigration in economic terms. Just steer clear of terms such as 'influx' or 'flood' and you'll be fine. ;-)

Nadolig Llawen i ti a'th deulu, a phob dymuniad da am 2008 llewyrchus!
Anonymous said…
God help us if Rhydian ever gets elected. Still, look how Hain turned out !
Anonymous said…
Prof - you are far too nice.

If anyone had implied that I was racist, I would have sued him and the Party he represents. Still, spriti of Xmas and all that...
Anonymous said…
Aww give him a break he lost the X factor
Anonymous said…
I suppose we shouldn't mock the affected at Christmas. Happy Cymuned Rhydian, long may you and your mate Aran remain rank outsiders. One South African and one Englishman stiring the guano in Wales. Perhaps in the New Year, you both may have something positive to put in place of the constant sniping of other people's ideas you maintain as a norm. I doubt it however.
Anonymous said…
The government have been recklessly allowing all into the country in a desperate attempt to prop up the economy for years. It works in the short term but will be a disaster in the long term. Greedy British employers are shunning British workers for cheaper immigrant labour.
I am a printer by trade and cannot find work I used to earn 38k a year, the print industry is struggling and now I find myself in competition with immigrants for every job. I have my forklift licence which I have fallen back on for employment in the past. But now this pays minimum wage.
The cost of living has gone through the roof; add that to my maintenance payments and an income of £10,800 plus tax credits is just not enough to live on. I have worked all my life but am now unemployed and cannot find a job that pays enough. I am starting to feel that if nothing changes soon I may as well consider myself retired at 37.

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