Facts? Where We’re Going We Don’t Need Facts!

So the European Commission have, for three years, been asking the Cameron government to provide evidence to substantiate his claim that the UK is suffering from a problem of “benefit tourism”. Having received nothing back in response, today they called “Shenanigans“.

As I have discussed on here before, the effects of immigration are overwhelmingly positive to the UK economy. Immigration increases economic growth. Immigration doesn’t increase unemployment. Immigrants contribute 30% more through taxes than they take through public services. In short, we would be doing significantly worse without immigrants.

You will notice that there is a marked difference between the messages I just gave you and the messages that the government sends out when discussing this subject. The biggest difference though, is that my messages are based on evidence and facts as opposed to the creation and fuelling of prejudices. (Read my earlier post, “The Immigration Fallacy” for more detail and links to comprehensive studies on the subject.)

The Daily Mail gave us a fact though, “600,000 Unemployed EU Citizens Living in Britain!” Except that it wasn’t a fact. Their definition of unemployed being different to everyone else’s by including people who weren’t seeking work such as students, retired people and spouses of employed people. The number of EU immigrants claiming job-seekers allowance, it was pointed out, was actually not 600,000 but 38,000. Now we can of course, quibble about the definition of unemployed, but if we were to use The Daily Mail’s one then overall UK unemployment, as Jonathan Portes noted, would be in excess of 15 million people, or around six times higher than our current way of measuring it.

Looking for supportive evidence was obviously a failing strategy when attempting to justify their policy of demonising immigrants, so Number 10 instead told us to forget the facts and appreciate that we needed to act due to “widespread and understandable concern” over people coming to the UK to access benefits. Well of course there is widespread concern now! The government have spent the last three and a half years trying to convince people that immigrants and benefit claimants are the root of all evil.

I’m not sure the tactic of:

  • Scare people into believing there is an immigration crisis
  • Get tough on immigration because people are now scared about an immigration crisis

…..is necessarily better than:

  • Look at the overwhelming evidence
  • Create a sensible policy based on it

The whole “benefit tourism” thing is an example of a Phantom Problem – a key tool in the government’s spin arsenal. I wrote about them in detail here, but essentially Phantom problems work like this:

  • You decide on a policy you want to implement based on your political ideals
  • Because it is based on your political ideals rather than evidence you can’t sell the policy to the public based on facts
  • You put a huge amount of effort into convincing the public that there is a crisis that can only be dealt with by implementing your tough policy
  • You implement your policy off the back of the huge public panic you have created
  • The public thank you for being tough and sorting out that crisis that was about to happen

Obviously I can understand why this disingenuous approach to policy-making is so attractive to the Conservative Party. On this, any many other issues, the evidence is simply at odds with their political ideals. I understand it but seriously, don’t we deserve a bit more than that? Ok, they have shown that using a basic framework of ignoring the facts but marketing their idealisms can be effective in molding the country as they’d like it to be, but it’s not hard to see why that is not an optimal strategy for delivering benefit to the majority.

Given that the evidence shows that immigrants contribute significantly more on average, I do see a certain irony when I see the Tories standing up behind a lectern on which is emblazoned the phrase, “For Hardworking People”.

For Hardworking People

For Hardworking People

Perhaps all they need is a wider lectern so it can say, “For Hardworking People…. As Long As You’re Not a Foreigner.”

RedEaredRabbit

The Immigration Fallacy

Immigration has been a hot topic recently. UKIP, (who seem to be founded on nothing more than the principal that British people are the best), did extremely well at the recent local elections. The Conservatives then panicked and decided that UKIP’s popularity showed that they must become even more tough on Europe and immigration themselves.

(Ed Miliband, being as always one headline behind everyone else, proposed a government subsidy for the living wage.)

I don’t think that Ed’s policy has much going for it but that’s not the subject of this blog. Today I’d like to talk about immigration – or more specifically the main arguments against it. They seem to fall into two categories:

  • Immigrants steal our jobs!
  • Immigrants just live on benefits and don’t contribute to the economy!

I’ll take each in turn…

Immigrants steal our jobs!

The arguments goes something like this.

In the UK we have net immigration – that is, we have more people arriving to live here than we have people leaving the UK to live elsewhere. The people who arrive from overseas take jobs away from those who were born here.

It’s understandable how you would draw that conclusion. Imagine a country who has a working-age population of 20 million people of whom 1 million are unemployed. Over the next five years the working age population increases by 500,000 due to immigration. At the end of the five years there will be 1.5 million unemployed people and because people move into and out of work during this time, lots of the immigrants will have jobs and those jobs will have come at the expense of a lot of the people who had jobs before those immigrants arrived.

Simple enough, right?

Wrong. Things are not that simple. It is, in fact, perfectly possible to add people to the working-age population without increasing unemployment. How? Trickery? Sleight of hand? Government statistics? No.

During the 20th Century, the UK population increased by about 21m people. We have, in fact been adding more people without increasing unemployment for a very long time. When we add more people to the economy, more goods are made and more services are provided and this leads to economic growth and to the creation of more jobs. It is easy to think of the economy as having a finite number of jobs and employment as a “one-in, one-out” market but that is not the case.

A much more useful way of looking at it would be this:

For every 100 people I add to the population, by how much does unemployment change?

Or to move the argument back to immigration:

For every 100 immigrants I add to the population, by how much does unemployment change?

It’s an intriguing question. Fortunately, NIESR has done the analysis and guess what they found out?

(UKIP, Tories, Daily Mail – you might want to look away now.)

The results show a very small negative and generally insignificant correlation between the migrant inflow rate and the change in the claimant count rate. A hypothetical example can help give a sense of how small this coefficient really is. A 2 percentage point increase in the migrant inflow rate, akin in magnitude to the large and sudden inflow of A8 migrants in the years 2004-2006, would, according to these estimates, be associated with a fall in the claimant count rate in the order of only 0.02 percentage points.

I don’t think I am doing them a disservice here if I summarise that if we are worried about unemployment, we can quickly exclude immigration as a significant factor. The effect is nigh on nothing.

(UKIP, Tories, Daily Mail – you can look again now, it’s gone.)

Let’s look at the second argument.

Immigrants just live on benefits and don’t contribute to the economy!

Well that would account for the fact that immigrants don’t take people’s jobs. Perhaps they just turn up, don’t attempt to get a job and just claim benefits?

You might believe that if you base your beliefs on what you read in certain newspapers but the reality is clearly going to be more complicated. A better way of looking at this question would be:

Is the overall contribution of immigrants to the economy positive or negative?

Fortunately the Centre for Research and Analysis of Migration have done a comprehensive study that answers this question.

(UKIP, Tories, Daily Mail – you might want to look away now.)

Yes, it’s positive. They found that immigrants on average paid 30% more into the economy via taxes than they took out through public services. But not only was it positive – the analysis found that on average, immigrants contribute more and take away less than non-immigrants. Jonathan Portes discusses it very well here.

Conclusion

So what can we conclude? Firstly, we have very good data that shows that not only does immigration not increase unemployment but also that immigration does boost the UK economy. Although the UK economy is doing badly at the moment it isn’t the fault of immigrants – we would actually be doing even worse if it weren’t for them.

Given this, it’s bizarre that these days we always seem to find ourselves surrounded by politicians wanting to show how “tough” they are on immigration. Given the facts it’s hard to understand – but when were politicians ever concerned by those?

The UK economy is in the longest depression in living memory, longer by far than The Great Depression of the 1930s and throughout it, unemployment has remained stubbornly high.

When such a situation occurs people naturally want to look around for someone to blame and, shameful as it is, politicians have done their upmost to direct that rage onto immigrants (and the recipients of benefits). But why would they do that, given that such a campaign is completely contradicted by the facts?

To win votes by explaining the benefits of immigration takes more time and effort than it does to win votes by saying that immigrants are job-stealers and benefit scroungers.

Politicians care far less about doing the right thing and far more about winning easy votes

Oh, and regarding why they want to blame these easy targets specifically for the depression? Well that one’s easy – the depression was created by the politicians themselves.

RedEaredRabbit