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Seven Facts Everyone Should Know About Immigration

Posted: 21/12/2012 23:00

Immigration is in the news once again. Not that it ever leaves it. A complex issue made harder by distortions, stereotypes, and populism. One could argue that its social and cultural effects are the trickiest to articulate and hardest to pin down. Certainly not easy to capture in a dry opinion poll.

Its economic effects are somewhat easier to measure, as I intend to demonstrate. More often than not, we're dealing with hard facts, not feelings. Assertions that can be backed up with evidence, and not based on gut instinct or prejudice. Below are seven facts that everyone should know, but often don't, about immigration. No doubt politicians of all stripes are aware of them. But, selective amnesia means conveniently dropping stats in favour of rhetoric.

1. Effect on wages:

The Migration Observatory, an independent organisation based at Oxford University, found the effect of immigration on overall wages at specific time periods to be extremely small. Between 1997-2005, a 1% increase in migration to the UK born working-age population resulted in an increase of between 0.2-0.3% in average wages. For the period 2000-2007, a similar proportion of migrants led to a 0.3% fall in average wages.

There were however wage variations between different working-age groups resulting from immigration. It found that:

"The greatest wage effects are found for low-waged workers. Each 1% increase in the share of migrants in the UK-born working age population leads to a 0.6% decline in the wages of the 5% lowest paid workers and to an increase in the wages of higher paid workers."

2. Effect on employment:

A number of empirical studies have shown there to be no significant impact in levels of unemployment from immigration to the UK. The first major study in this area, carried out between 1983-2000, did find:

"adverse effects on employment, labour market participation and unemployment of UK-born with intermediate education (defined as O level and equivalent) and a positive impact on employment outcomes of UK-born workers with advanced education (A-levels or university degrees)."

Two very recent authoritative studies, one analysing data from 1975-2010, the other 2002-2011 - thus taking into account periods of low economic growth, as well as past and present recessions - found no impact on unemployment from immigration.

3. Youth Unemployment:

There is no direct correlation between rising youth unemployment and Eastern European immigration to the UK since 2004, contrary to what certain reports have said. Jonathan Portes, director of the highly respected National Institute of Economic and Social Research (NIESR), disputes the findings of a report by the think tank MigrationWatch UK. The latter noted that between 2004-2011, youth unemployment rose by around 450,000, at the same time as an extra 600,000 Eastern European workers entered the UK. But, as Portes notes:

"The vast majority of that rise in youth unemployment took place during 2008 and 2009 [during the recession caused by the financial crisis]. During that period, the number of Eastern European workers actually fell."

According to Matt Cavanagh, an associate director at IPPR:

"The countries in the 'old' EU which have seen the steepest rises in youth unemployment since 2004, including Spain and Greece, have not had very high levels of migration from Eastern Europe; while Germany, which has had relatively high migration from Poland (despite maintaining transitional controls for the longest possible period), has relatively low youth unemployment."

4. Work-related benefits :

371,000 migrants claimed benefits in 2011. That's 7% of the total migrant workforce, classified as non-UK nationals when they first arrived in the UK. This compares to a figure of almost 17% for all British nationals. According to Jonathan Portes, the figures on migrants and benefits can be summed up thus:

• migrants represent about 13% of all workers, but only 7% percent of out-of-work claimants;
• migrants from outside the EEA represent about 9-10% of all workers, but about 5% of out-of-work claimants
• foreign nationals from outside the EEA represent about 4.5% of all workers, but a little over 2% of out-of-work benefit claimants.

A Department for Work and Pensions sample of 9,000 non-EU migrants found just 2% had made false benefit claims.

5. Impact on public services:

An NIESR report on non-European economic and student migrants in January of this year concluded that they:

"impose costs on UK public services that are small both relative to the total cost of these services and to the share of these groups in the population as a whole."

It goes on to state that:

"The literature review indicates non-European economic migrants are likely to be comparatively light users of health and social care services due to their relatively young age profile, good health, their status as employees and presence in professional occupations."

"In addition, the professional status and educational attainment of non-European economic migrants make it more likely that they will be consumers of private health and education in comparison to the population as a whole and so make fewer demands on public services."

"Total expenditure on state education, health and personal social services accounts for 44 per cent of public services expenditure. The average expenditure per adult migrant for these services is estimated to be significantly lower than for non-migrants: expenditure per non-European economic migrant is estimated at between 16 and 23 per cent less than for non-migrants and for student migrants, between 41 and 49 per cent less."

6. Fiscal impact:

According to the Migration Observatory, the fiscal impact of migrants largely depends on their characteristics (age, skills, length of stay). A Home Office report in 2002 estimated that for the 1999/2000 financial year, migrants' made a net fiscal contribution (what they paid in taxes versus what they used in benefits and state services) of about £2.5 billion.

In 2005, and covering five years of data, the IPPR think tank found that during the period when the government began to run a budget deficit, migrants were less of a drain on the public purse than the UK born population:

"In 2003-04, when the government ran a budget deficit such that all taxpayers on average consumed more public benefits and services than they paid in taxes, the IPPR study found that the average immigrant cost the exchequer £74 in net terms compared to a net cost of £892 per UK-born person."

In the four fiscal years following EU enlargement in May 2004 and the migration that followed, figures shows that:

"Migrants from the A8 countries made a positive contribution to public finance, despite the UK running a budget deficit."

7. Public opinion:

The public overwhelmingly disapprove of levels of immigration over the last decade, with 67% believing it's been a bad thing for Britain. They support the government's attempts to reduce net migration from hundreds of thousands a year to tens of thousands. However, over three-quarters of them doubt this will happen.

But, according to Peter Kellner, president of YouGov:

"There is a huge gulf between people's perception of immigration as a national issue, and one that affects their own lives."

Whilst immigration comes second (behind the economy) in terms of national importance, as viewed by voters, when people are asked to comment on issues which directly affect them, its level of importance shrinks from 45% to just 12%.

Kellner believes the best solution is for politicians to stop worrying about what voters tell them on this subject:

"Instead, they should work out what is right for Britain: for its economy and its society. They should do this honestly and openly, admitting that the task is complex, and that the problems are real and will take time to solve."

Now that really would be a novel idea.

 

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