Myth 4: Economic migrants take too much from rich world economies

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Myth 4: Economic migrants take too much from rich world economies


Many people say that if you move to a richer country to try to get a better life, you do not deserve a good life. But they accept the refugees if they are leaving violence and have suffered a lot (and they also say ‘but we have our own problems too’.)

In the Netherlands, where I live, people often say economic migrants are ‘gelukszoekers’ or chancers. You can translate this word as ‘happiness seekers’ – but people use it ironically, and clearly do not like the migrants. Most people agreed (in a recent poll) that there should be fewer economics immigrants – but only 26 per cent wanted fewer war refugees.

The media and politicians try to stop people thinking about the cuts. So they say economic migrants use all our public services, stealing our jobs and make our wages lower.

But research shows this is not true.

In the 34 rich countries of the OECD, on average immigrant families paid about €2,500 ($2,800) per year each in tax more than they used in public services.

In a 2014 study, researchers at University College London found that non-European immigrants to Britain (the group that most people don’t like) received state benefits less than natives. They paid £5 billion in taxes between 2000 and 2011. They did not use up public services. They paid more tax to help the rest of the population. New migrants are only two per cent of people who live in social housing. The problem here is that the government sells off social housing and does not build more houses to make housing cheaper. Only the rich benefit from housing.

People move to where there are jobs. Politicians say they will be strict. But immigration laws are now less strict for high-skilled migrants and, sometimes, even for people who don’t earn much. And there is a double standard: when people from rich countries get good jobs in other countries, others think this is normal, or that they are ‘following a dream’.

Economic migrants are usually young, they work hard and often have skills that the countries need. This is good for the older workers because they pay money into pensions and bring life to the economy. As the migrants get older, the positive impact gets less. But in Britain, the Office for Budget Responsibility says that if the country takes a lot of migrants, this could halve the government debt could be halved over 50 years with their tax.

Libertarian economists say we should take away all trade barriers. They say we should have a lot of economic migration. They think this would increase world GDP greatly. They also say that if we restrict immigration, this is the same as leaving trillion-dollar bills lying by the road. But it would need immigration on a very big scale to get these results and most people would leave the Global South. This is not going to happen.

❛In most countries, migrants pay more in taxes and social contributions than they receive, and they contribute a lot to economy of the country they move to. In advanced countries, the number of highly educated immigrants has increased very quickly in the past ten years. This has been important for productivity and innovation. Migrants send money to their home country, and this helps lift thousands out of poverty, keep children in school and build better futures. Migrants who go back to their country take back money and all they have learned.❜

International Labour Organization Director-General Guy Ryder talking to G20 Labour and Employment ministers, 3 September 2015.

But the biggest problem is if economic migrants take jobs and make people pay lower wages. Research shows that the only people who might lose jobs are migrants who arrived before. Sometimes migrants have reduced low wages a little, for a short time. One survey of OECD countries showed this was a reduction of about 0.12 per cent with a one-per-cent increase in immigrants.

And some studies that show the opposite. One study (by economists Mette Foged and Giovanni Peri) studied all workers in Denmark from 1991 to 2008. It followed how they responded to immigration, after a lot of refugees arrived from Somalia and Afghanistan. People in communities where migrants moved to had bigger wage increases than communities without migrants.

The real fight against low wages is against political policies that help the rich and create job insecurity. The ILO says that the way to strengthen growth and employment is to reduce inequality, raise minimum wages, improve unions fighting for better pay and social protections. Migration economist Michael Clemens said that immigrants with low skills take jobs and create jobs. The balance is positive even when politicians and activists say that it must be negative. But it is difficult to tell people this because people see immigrants get jobs, but they don’t see immigrants create new jobs.

Finally, migration can bring positive economic results in the short term, but in the long term over the last 50 years the impact of migration to the rich OECD countries has been about zero (almost never more than 0.5 per cent of GDP either in the positive or negative direction). In the long term, migrants are no different from other people. So what is the problem?

NOW READ THE ORIGINAL: (This article has been simplified so the words, text structure and quotes may have been changed).