Abandon hope all ye who enter this immigration debate
Immigration is good for us. With every major party now promising to ‘get tough’ on immigration, it’s easy to forget that immigrants bring new skills to the country, allow for more specialization, tend to be more entrepreneurial than average, pay more in to the welfare state than they take out, and make things cheaper by doing the jobs that Britons won't.
No political figure of any stature will say any of these things. Instead, people like David Cameron and Ed Miliband and Nick Clegg focus on the two potential problems with immigration: that, other things being equal, immigrants may push down average wages, and that an unrestricted welfare state incentivises immigration by people who want to draw benefits instead of working.
These are both valid points, but insignificant ones. Ben Powell points out that the wage-depression claim ignores the fact that immigrants demand goods and services (raising wages for those things) as well as supplying them. It also assumes that immigrants always directly compete with indigenous workers for jobs. If immigrants are doing jobs that indigenous workers will not (or cannot) do, like highly unskilled service industry work, then they are not outcompeting indigenous workers.
There is quite a bit of evidence to suggest that this is the case in Britain. Fraser Nelson has shown the high effective marginal tax rates that people on welfare face if they want to enter the workforce. If these Britons are unwilling to take low-paid jobs, then there is no harm to them caused by immigrants taking these jobs. On the contrary, the fact that these jobs are being done by someone adds to the number of goods and services that everyone in Britain can take advantage of. (There is one other point: if people’s lives are getting better overall, who cares where in the world they happened to be born? Not me. But even I do not expect any politician to go so far as to say that all men are created equal.)
The second point against immigrants is usually the one focused on by politicians. The problem here is that a valid theoretical point is assumed to be a significant problem in actual fact. Here, the numbers simply do not bear the theory out.
As it happens, we don’t actually have an unrestricted welfare state – most major forms of welfare and state services are limited to UK residents. And, if anything, the evidence suggests that immigrants are less likely than Britons to draw out of work benefits – according to Jonathan Portes, “migrants represent about 13% of all workers, but only 7% percent of out-of-work claimants”. What a surprise: the people leaving behind their friends, family and communities are the ones who most want to make better lives for themselves. Again and again, empirical studies have shown that immigrants pay more in than they take out.
In any case, if we have a benefits system that is open to exploitation, why only worry about it being exploited by non-Britons? Conversely, if benefits are necessary to maintain a basic standard of welfare, why doesn't the welfare of non-Britons matter? There is a good case for reforming benefits so that they complement work instead of substituting it, but that has nothing to do with immigration.
Like most ‘major policy announcements’, the specific proposals outlined by the Prime Minister today will probably be forgotten soon enough. Even if they do end up becoming law, they will not affect many people. But what David Cameron and Ed Miliband and Nick Clegg have achieved is to throw out any chance of a policy line that, however unpopular, has the rare political virtue of being right.