Monday, 19 April 2010

Panorama and migration

Vaguely watching this dull Panorama, sensationalised and tabloid as all Parorama documentaries have become, about population pressures in the UK, concentrating, it will not surprise you, on blaming it all on immigrants: "there's a widespread belief that migrants get preferential access to housing...[insert glaring lack of any attempt to actually answer whether this is the case or not]"

But I was struck by the figure of immigration benefiting the UK by "only 60p per person per week" (contrast this with Migration Watch's previous figure of 4p) apparently sourced from this Lords report (although I can't find that specific figure), and contrasted with the 'misleading' government use of the benefit to GDP of immigration.:
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.

The report makes an interesting point about how while in the short term migrants fill vacancies in he economy but in the long term the economy proportionately expands (increasing vacancies again). But in emphasising the raw monetary figure of per capita increase in GDP I think it is equally if not more misleading than the government approach. In particular I take issue with their rejection of the argument that a large proportion of the UK population are not of working age, whereas new immigrants are largely young or working age such that they swell the (shrinking) working age population which contributes (proportionately) the majority to the economy and state coffers - so that dividing immigrant contributions over the whole population is unfair because they are largely not addding to the dead wood of the non-working populace (who actually cause most of the costs to the state). The report says:
Arguments in favour of high immigration to defuse the “pensions time bomb” do not stand up to scrutiny as they are based on the unreasonable assumption of a static retirement age as people live longer and ignore the fact that, in time, immigrants too will grow old and draw pensions. Increasing the retirement age, as the Government has done, is the only viable approach to resolving this issue...
 Lord Turner argued that as people live longer, it is reasonable to assume that the extra years of life are divided between working years and retirement so as to keep roughly stable the proportions of life spent working and retired. Under this assumption, half of the projected increase in the dependency ratio disappears, when compared with the simplistic case in which the retirement age stays unchanged.
First of all I'd like to make clear that it is generally considered that for every additional year of life expectancy you can expect at best 6 months of relative health and 6 months of ill-health such that the policy of incrementally increasing the retirement age with life expectancy is basically aiming to work the populace until they are sick and to erode the few years of healthy retirement they might otherwise have expected*. It is also worth noting that immigrants can have a tendency to return to their country of origin after a few years. So while it is true that increasing the working age population will increase the number of retired people eventually (although to a lesser extent in the first generation due to decreased life expectancy compared to the UK population as a whole) it is still more sustainable in the short term than increasing the retirement age until people are being worked right to their death beds (in order to pay for the current older generation's nice early retirements at 60-65yrs old with over 10 yrs of life expectancy). 

In this vein, if we're going to talk about how much immigrants add in 'per capita GDP' we have to compare them to other members of the population - old people or the unemployed for instance - what do they cost in per capita GDP?  Averaging over a homogeneous UK 'indigenous' population is completely misleading because compared to significant proportions of the UK population immigrants use much lower poroportions of national expenditure.  The question should be how many 'indigenous' people does each immigrant support? And 'per capita GDP' can't answer this.

To look at it another way, if we consider a British person who contributes exactly the average per capita GDP to the country, are they having zero effect on the country or a net benefit? According to the 'per capita GDP' measure of economic contribution they are giving nothing to the country - despite working, paying taxes etc. - whereas common sense shows that they are helping to pay for those people who are a net cost to GDP (the economically inactive like the old, the young, the sick, the unemployed).

* Another gift from 'The Most Selfish Generation'


John said...

Most countries have a work permit system to cope with transient labour shortages. If work permits are included in the analysis then immigration has a massive negative effect on the economy. Work permits also encourage workers to return home so that they provide a return on the investment that was made in them by their own countries. It must make third world governments sick to see their training programmes doing no more than providing students with tickets to first world countries. See The benefits of immigration to the UK economy.

pj said...

I don't understand what you are saying about work permits, that they particularly cause negative economic effects or that allowing work permits would have a greater economic benefit than permanent migration?

Anyhow, I disagree with your post. For a start you have just defined wealth in terms that make immigration make the economy poorer, but that is entirely circular and a priori reasoning - you need then to explain why GDP, or even GDP per capita, doesn't have any relationship with population density - why are the UK and the Netherlands considered poor countries and Greenland and Kazakhstan are wealthy ones?

And your conspiracy theory is pretty bizarre too:

"The high house prices redistribute money to the rich and cannot be a 'benefit' and do not fit with left wing agendas. Only the left wing desire to recruit a tractable population can explain why immigration has been allowed to occur on the epic scale of immigration into the UK during the rule by the Labour Party. Overall there can be no doubt that the large-scale immigration into the UK over the past 15 years is social engineering by centre and left of centre parties.

So immigration into England is social engineering, but why do centre and left of centre parties wish to engineer English society so that it has large numbers of people from overseas? Apart from the fact that the newcomers do not vote "nationalist", they are also instinctively internationalist, they will favour the EU, globalization and the left of centre agenda. The destruction of the English national culture will also aid this process. The centre and left of centre elite in politics are convinced that these are "good things"."

John said...

You yourself report that immigration is of little economic benefit to the existing population of England, even the more optimistic studies showing the economic benefit in pence per head of population.

Your closing paragraph is an argument for an infinite population density and so false. There is obviously a population density at which the amenity of a country and its cities begins to decrease and there is also a sustainability limit on population. At much less than an acre a person, including mountains and motorways, England has passed this density already.

It is also the case that government policy should be made for the electorate, the people already resident in a country. The great majority of the English do not want any more migration. It is also the case that being pro-immigration is inherently racist - see Is the pro-immigration lobby racist...

Turning to your responses to my own article, it is fairly clear that the article describes work permits with subsequent repatriation as a preferred option: "The possibility of issuing work permits means that if there were any benefit from using foreign labour it could be obtained without any of the longer term issues consequent upon immigration such as overpopulation etc."

You criticise my article on the grounds that: " have just defined wealth in terms that make immigration make the economy poorer, but that is entirely circular and a priori reasoning"

My argument was in terms of optimum population density, I said that:

"Unlike GDP and other crude measures of "national wealth", individual wealth in wealthy countries can be roughly measured by the amount of space occupied by a person. A rich person has a large house, large garden and big car, a poor person lives in a bedsit and has a bike. This means that increasing the population density of a country beyond a certain level makes everyone individually poorer. "

Notice that this argument is about a decent quality of life for the entire population in a relatively wealthy country. Certainly, if we start the discussion of immigration from the assumption that the existing population of the UK should have a decent quality of life then immigration is absurd. The argument is not circular, it is just obvious and overwhelmingly true.

As for "conspiracy theories", this is not true, there is no conspiracy, Blair and others have been quite open about their desire to simply fill the country with people. See:
Tony Blair defends open door policy on immigration.

Labour wanted mass migration