Friday, 13 May 2016

Immigration, wages and the EU debate.


Both sides in the EU debate are, sadly, relying on their own versions of "project fear."  Remainers predict economic disaster if we leave, which is a  gross exaggeration. Leaving will be economically damaging, but will not be a disaster - we shall survive.  Brexiters play hard on a populist, and in my view unsubstantiated, fear of immigration.

In an earlier post I have described how my own life is both enriched and made much more comfortable by immigrants and their offspring.. Yesterday a  researchers at the London School  of Economics released a report on the effect of immigration on domestic wages.  I have not read the report but have no reason to doubt Larry Elliott's summary of their conclusions, viz

  • areas of Britain with the biggest  rises in workers from the rest of Europe had not seen sharper falls in pay  or a bigger reduction in job opportunities  than other parts of the country;
  • goods and services consumed by immigrants raise demand in the British economy and create opportunities for UK-born workers;
  • the fall in real wages over the past decade is caused by the deep recession which began in 2008 rather than the numbers of immigrants from other European countries;
  • for the most part [immigration] has likely made us better off;
  • EU immigrant pay more in taxes than they use public services and therefore they help to reduce the budget deficit.
That does not, of course, alter the fact that many immigrant workers are wickedly exploited by gangmasters, as Felicity Lawrence so vividly describes in this Guardian "long read."  This should not be possible in a modern and well-regulated developed country. Something should be done and presumably it would be if there were the will.

Of course it will be difficult to convince those against immigration of its economic benefits  since people on all sides tend to believeonly the evidence that supports their prejudices (me included,)  Nor will determined Brexiteers believe the plethora of economic predictions from most respected economic sources - the IMF, Governor of the Bank, the Treasury et al  - that leaving the EU will be damaging to our standard of living and quality of life.  This is partly human nature and and partly distrust of government figures.  This distrust has probably always been the case but has, I believe, become much worse since the Thatcher era, when manipulation of official figures to suit the purposes of successive governments has become more common.

I regret that a mature democracy such as ours seems incapable of conducting a civilised
debate based on agreed facts

4 comments:

  1. How can there be 'agreed facts' about questions that are inherently counterfactual?

    No one can know what would have happened to wagres, demand, taxes, public services, or whatever had there been less immigration, or more immigration, than there actually was, so all these figures are by their very nature speculative.

    There can be no such thing as a 'fact' when you are comparing what actually happened with what might have, but in fact did not, happen; any more than there can be 'agreed facts' about the future.

    ReplyDelete
    Replies
    1. True we can't have agreed "facts" about the future, but we can base our speculation on hard evidence from the past.

      Delete
    2. But the point is we can't even have hard evidence from the past, at least when it comes to things like how immigration has affected, say, wages; we can find out that, say, there was X amount of immigration and wages grew or fell by Y, but we cannot know whether, without that immigration, wages would have changed by more, less or the same.

      You can't re-run history with a different set of starting conditions, as an experiment, to see what effect a given factor has. So any conclusions drawn about how much or how little effect a given factor had, and in what direction, are necessarily merely guesses. Informed guesses, but guesses nonetheless — or to put it another way, speculation.

      Delete
  2. How depressing is the level of 'debate' on the EU?
    Both Cameron and Johnson treat the electorate as fools with their false historical fantasies. Both sides use propaganda rather than reason in their 'arguments'. Dr Johnson said that @Patriotism was the last refuge of the scoundrel'.
    One now sees what he meant.

    ReplyDelete