Immigration
Martin Wolf makes some interesting and sensible points on immigration in today's FT (it's for subscribers only so I won't link to it).His conclusion is worth noting:
"My conclusions are these: first, the strongest economic case for liberal attitudes to migration rests on global, not national, welfare; second, a rich country wishing to maximise its own gains would focus on importing skilled workers, preferably on a temporary basis; third, immigration has sizeable distributional consequences that cannot be ignored in the debate; fourth, sizeable immigration will also have substantial indirect effects, some positive, such as greater diversity, and some negative, such as greater congestion in densely populated regions; and, fifth, whether immigration is significantly advantageous to the receiving country depends on its precise characteristics."
There are three things worth noting in more detail. His point one is that essentially immigration raises global welfare, for most immigrants produce more in their new country than their old. But most of the gains go to the immigrant, though not all. Thus GDP rises a lot, but GDP per capita only a little.
The important issue here is which matters to you. For many Europeans/the Left the issue is GDP per capita. That is what they use when they note that over the last ten years the US has not outperformed Europe. However for others what matters is GDP - that is what Americans/the Right use when they note that the EU is falling behind the US. GDP per capita is more important for living standards, GDP is more important for global power. Perhap the two sides are on the wrong side? In any case immigration doesn't lower GDP per capita.
Second, Wolf's third point is that immigrants lower wages in the areas in which they work. Thus as many are unskilled, they lower unskilled wages. The cost of plumbers (believe it or not) are kept down by immigrant plumbers. Obviously this had distributional consquences, which may not be desirable. Indeed Wolf's second point, of bring in skilled labour might have a role here -- name an expensive profession (lawyers?) and invite them to practice in Britain. Then again it doesn't seem to have worked for investment bankers, does it?
Finally, Wolf concludes, as the economics aren't decisive, it comes down to his fourth point, which is the other characteristics of immigration. I would add one point here, which is that contrary to much opinion immigration has probably saved the culture and vitality of many of our former industrial cities, which of course has an economic dimension too.
posted by Matthew @ 4/14/2004 08:46:00 AM
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