Impact of Immigration on UK

Keywords: immigration benefits, immigration impact on economy

The general public are highly affected by immigration in positive and negative ways. An increase in highly skilled immigrant workers, for example doctors, can cause a positive effect for hospitals and the public as more staff are available with no training needed. However, an increase in less skilled workers could cause the public to become uneasy with the quality of the workforce as they are not familiar with British health and safety laws and quality controls. On the contrary, this will make costs cheaper as wages will decrease due to the lack of skill involved. Another advantage to the public is that new skills and processes may be bought in by immigrants which the public want or need. There are many examples of this in the food industry, e.g. Chinese, Indian and Thai food outlets.

It is often said that Britain has an aging population. As people get older they can no longer work and need support to live. It is suggested that an increase in young immigrants will help pay for these costs by taxation. To an extent this is true in the short term. However, as more and more young immigrant families start to form in Britain people will seek permanent immigration. In turn this will lead to another increase in aging population as the original immigrants grow old. Therefore, new immigrants would be needed to combat the aging population. This cycle would continue until it leads to a completely unsustainable population. In conclusion to this, immigration should not be sought after to deal with aging population as it has only short term relief.

C. Shaw , “United Kingdom Population Trends in the 21st Century”, Population Trends, no 103, Spring 2001.

A home office study in 2000 on the yearly contribution immigrants give to the economy showed they paid £31.2 billion in taxes and received £28.8 billion in government expenditure. Resulting in a contribution of £2.5 billion, it was then suggested that Britain benefits from large scale immigration. (The Migrant Population in the UK: fiscal effects, Ceri Gott and Karl Johnston, RDS Occasional Paper No 77, Home Office, 2002, p 11.)

A similar report was published in 2004 which presented similar findings. However, this report showed that when the government had excess expenses, immigrant’s contribution was higher, but when the governments expenses were lower, so was the immigrants contribution. This shows that immigrants contribution is not consistent and in the current economic climate it is more likes to have a negative contribution. Therefore, this should not be a suggested benefit to the economy.

Paying Their Way: the fiscal contribution of immigrants in the UK, D Sriskandarajah, L Cooley and H Reed, IPPR, 2005, downloaded from www.ippr.org.uk/members/download.asp?f=/ecomm/files/Paying%20Their%20Way.pdf&a=skip

It has been suggested that current employees may feel unsettled or lose their jobs due to immigrants being taken on as they only require cheap wages. This can lead to an increase in unemployment. This theory is very generalised and in some cases it is true. However, various researchers have found that there is no direct link to the labour market and unemployment. Meaning the increase in immigrants does not always cause an increase in unemployment.

The local labour market effects of immigration in the UK, C Dustmann et al, Home Office Online Report 06/03, 2003, p 9.

However, a recent report has shown that for every 100 immigrants joining the labour marker, 83 local workers become lose their jobs. This is most common in countries where local workers have greater job protection. This means that it is more difficult to sack local workers. Therefore, companies in these countries may decide to employ immigrant workers as they are easier to dismiss and this can save the company time and money if these circumstances are needed.

J. D. Angrist and A. D. Kugler, “Protective or Counter-Productive? Labour Market Institutions and the Effect of Immigration on EU Natives”, Economic Journal, vol. 113, no. 488, June 2003, p. F332.

In Britain, there is a higher population of immigrant workers in the south. This does not mean that it only affects the employment of natives in these areas. It also affects the locals in the north, this is because there are more locals from the south migrating north due to increase in labour market and costs of living. This forces the competition for jobs in the north to increase. And in turn the locals in the north will be deterred from migrating south for the same reasons some have moved north.

Many believe that immigration causes wages to decrease. This is only apparent in low skilled jobs where unskilled immigrants are willing to work for less than natives. However, a recent Home Office study in 2003 has shown that there is no strong evidence of existing workers wages to decrease due to immigration. In fact, it suggests immigration may increase wages. Another report by Christian Dustmann shows that in areas of high inflow of immigrants, some natives may lose their jobs. However, the ones who manage to keep their jobs have an increase in their wages. This is because the cost of living in that area has increased as there is a high inflow of immigrants. This can be seen as a positive and negative effect for the locals. Not all people living in the area will have a pay increase which could lead to them not being able to afford to live in the area. The people who do receive a pay increase will be able to continue to live in the area and are likely to be better off. Potentially, the area could become nicer as there is more local money flowing. On the other hand, if the higher wages that the locals are receiving does not match the increase in living costs then they would be worse off than before. This shows that immigrants can have bad and good effects on the local workforce. However, this evidence suggests the negatives outweigh the positive.

Christian Dustmann, Francesca Fabbri, Ian Preston, Jonathan Wadsworth, “The local labour market effects of immigration in the UK”, Home Office Online Report 06/03.

Many people believe that Britain needs immigrants to do the jobs that the natives do not wish to do. For example, cleaning. This is untrue as local workers are willing to do these sorts of jobs but believe they deserve better pay and conditions than the immigration workers settle for. Britain’s high inflow of immigrants means that there won’t be a shortage for these sorts of jobs. However, if the inflow was decreased then it would force wages to increase and therefore local workers would accept the pay. This shows that high flow of immigration can lead to unemployment in the local workers.