The following is a commentary on the recent Economist survey of migration from MigrationwatchUK.

November 02, 2002

The main argument put forward is that, while the gaps in process of traded goods are now much smaller as a result of trade liberalisation, the gaps in wages are still very wide. This, in theory, permits large gains from liberalising immigration restrictions, particularly for unskilled labour where the gaps are widest.

However, the survey points out (Page 13) that skill levels affect costs. Migrants from poor countries are much more likely to claim benefits than migrants from rich ones; unskilled migrants are much more likely than native or skilled migrants to lose their jobs in a recession. Furthermore, the low wages that make unskilled immigrants so attractive to employers condemn their children to poverty and struggling inner city schools. In the next generation,, the children of the unskilled are not keen to work for low pay in jobs that natives shun. After all they are natives too. This can lead to alienation and, sometimes, criminal behaviour.

The survey comments (page 10) that Europe took an unfortunate road in the 1960's, importing low wage migrants to do industrial jobs. Now these jobs have one but the migrants are still here, trapped, with difficult consequences for their children. It comments further that the biggest challenges of integration, and the highest costs, arise if the unskilled settle down and have children. If society fails to integrate the next generations, these costs may stretch far into the future.

The survey points out that a report by DFID and the ILO last year found that some developing countries had lost around 30% of their highly educated workforce. The survey comments that, to minimise harm to sending countries, migration should be temporary. It does not explain how this can be achieved. As regards the impact on rich countries, the survey states that migration probably raises the living standard of the rich and increases returns to capital (page 14). The mobility of immigrants may also help the economy to run at a higher speed than might otherwise be possible thus counteracting some of the inflexibility of job markets, especially in Europe.

Against that, unskilled immigration may discourage investment. It may also reduce the pay of the unskilled natives. The survey concludes (page 14) that the overall benefits of immigration may be modest and unevenly distributed. An America National Research Council (NRC) a study estimated the benefits to be up to $10 billion a year - chicken feed in an economy of $10 trillion. It quoted the Rand Corporation as saying that 'The economic pluses and minuses are much smaller than the political and emotional salience.'

In its concluding section, the survey suggests that the challenge is to manage the labour market not to shut down migration. It suggests that winning a political consensus for an orderly policy might mean picking the migrants - for example the skilled and those whose culture has prepared them for European society. It also suggests that there should be insistence upon a working knowledge of the host country's language.

The survey suggests that policy should be drawn up in consultation with the sending countries, that it should apply economic instruments, and that it should encourage temporary rather than permanent movement.

It suggests that there should be no controls at all on the movement of labour among countries with similar levels of income per had. For others, it suggests that a visa fee should be set somewhat below the cost of paying a trafficker. In addition, all employers might be asked to pay a levy - perhaps in the form of a higher rate of pay roll tax - to employ foreign born workers. The survey does not address the question as to whether the attraction of a welfare state might not lead to overwhelming demand for such visas.

The survey suggests that there should be temporary visa available for skilled worker which should run for a 2 -r 3 year period. In fact, this system has existed in Britain for 80 years in the shape of the work permit scheme, now being enormously expanded.

A further idea is that immigrants should but a bond, priced slightly above the smugglers going rate, to enter legally. The bond would be repaid to the migrant on return to hi own country.

These are interesting idea but they cannot be combined with the present legal framework. It is already proving almost impossible to return those
who have no right to be in Britain. For example 9 out of 10 asylum applicants remain in Britain whether or not their case is accepted. Furthermore, present legislation will permit migrants to bring their relatives to join them, thus greatly increasing the numbers. Indeed a move to an entirely economic framework whereby workers came and returned home (as, for example,
in Saudi Arabia) would fall foul of European Human Rights legislation.

That said, the editorial in the same edition, makes very interesting reading. It recognises that immigration is disruptive to neighbourhoods, that an economic slowdown could breed greater resentment and that there are concerns about security and health implication.

It argue that 'The first essential is to accept voters' right to a say about who and how many can enter must take precedence over the rights of those unlucky enough to be born in poorer parts of the world.' The task of politicians is to persuade voters that immigration is not only inevitable but also in their long-term interests. That will only be possible if migration is managed carefully.

The editorial continues that illegal immigration currently running at about 500,000 a year into both the United States and the European Union, indicated a breakdown of Government control. Even some legal routes have become particularly prone to abuse. The include two that are especially sensitive in liberal democracies; asylum claims and family reunion. In particular, a United Nations convention (on refugees) more than half a century old is surely no longer a strong enough basis for deciding whether to admit ten of thousands of people each year. The editorial calls for a more selective policy, not a more restrictive one. This would mean favouring not just the skilled but those from culturally similar backgrounds and insisting that migrants learn the local language quickly. Race and religion must be a part of the public discussion of migration. Rich countries need unskilled workers and should create legal ways for them to enter. There should also be measures to encourage their return home.

The final sentence is rather inconsistent with the rest of the editorial and the survey; 'Open the door, and let in new idea, new foods, new businesses and a new buzz along with those eager new faces.'

The editorial and survey usefully advance the debate but neither bring out the current scale of immigration - about ¼ million per hear. This must be tackled a part of a more selective approach with the magazine advocates.

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