Benefit of East European immigration challenged

May 01, 2005

A report out today casts doubt on the benefits of immigration from Eastern Europe and elsewhere.

Government claims that the existence of 600,000 job vacancies justifies the highest levels of immigration in our history do not stand up to serious scrutiny says a new report. (Read report)

The report, from think-tank Migrationwatch, says that importing labour is self-defeating because it generates more demand leading to further “shortages” of labour – in effect an insatiable demand for immigration.

Said Migrationwatch chairman, Sir Andrew Green: ‘The fact is that, between 2001 and 2004 the number of vacancies actually increased despite net immigration totalling nearly half a million in the same period. This confirms the view that, in an economy operating close to capacity, there will always be some labour shortages. They will not be “filled” by East Europeans as the new immigrants will also add to demand.’

‘600,000 people represent just over 2% of the workforce. Some vacancies are to be expected in a dynamic economy. Indeed it is essential if people are to be able to change jobs.

‘But only a quarter of the vacancies are for skilled workers. Furthermore, as migrant workers are nearly twice as likely to be unemployed as indigenous workers, it seems that there is a mismatch between immigrants and vacancies’.

This view was further supported by the experience in London where there is a high concentration of immigrants – but similar skill shortages to the rest of the UK.

‘This indicates that immigration is helping to fill some unskilled jobs, but having little effect on skills shortages,’ he said. ‘Indeed higher skilled vacancies are more difficult to fill in London. The government’s own report shows that 80% of the East Europeans who have registered are earning less than £5.99 per hour.’

The new evidence supports the view expressed by Martin Wolf, the Chief Economic Commentator at the Financial Times (article dated 27 January 2005):

“This is a self-defeating policy: if the response to “shortages” is to import labour, additional demand for goods and services and further shortages of labour will emerge. The argument from shortages creates an open-ended demand for more immigration: if the UK had a population of 120m it would still have job shortages and so a demand for yet more immigration. The demand could never be satisfied.”

Sir Andrew said, 'It is no surprise that employers are glad to recruit overseas as it avoids both higher wages and training costs but overseas recruitment is a disincentive to training and re-training British workers – and to labour saving investment.’

‘Employers are laughing all the way to the bank but it is the tax payer who foots the bill for the additional infrastructure required for the extra population as large scale immigration has a substantial impact of population growth and congestion. Now that East Europeans have a right to come and work in Britain, it is essential to make a compensating reduction in immigration from elsewhere.’

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