British prime minister Mrs May and Amber Rudd’s commitment
to reduce net migration to “ten of thousands” can only be realized at a
significant economic cost. Net immigration to Britain was a record high of almost 300,000 in
2016 and it was made up mainly of skilled workers. So, it is impossible to
reach the target without banning some of the skilled workers to enter country. Since
25% of the scientific researchers are foreigners, lower immigration of skilled
workers would be problematic for skilled industries. Reducing entrance to foreign workers will also be significant on the unskilled industry such as food
manufacturing. Food manufacturers rely heavily on non-British unskilled
workers. If the supply of cheap labor diminishes, it could pose a big threat to
the survival of many firms.
Britain has a huge aging population and higher tax income is
needed to accommodate spending on growing pension and health care. Foreign workers are subject
of tax and limiting their presence would put more burden on Britain. There are
some arguments saying that reduction to net annual migration of 100,000 would increase the wages
by 0.2-0.6% by 2018. However, According to research by Katerina Lisenkova of
Stratchclyde University, this wage boost will be offset by decline in GDP per
person by 1% in long term.
http://www.economist.com/news/britain/21717418-annual-net-migration-amounts-about-three-times-attendance-manchester-united-football
1 comment:
It is unfortunate how labor mobility has been demonized by political rhetoric to the point where long-term economic benefits are forsaken just to garner votes. Clearly, the same sentiment is gaining widespread support throughout Western Europe and the United States (especially in light of the refugee crisis) and politicians are taking advantage of peoples' economic insecurities to regulate the labor market when it is almost certainly going to lead to inefficiencies in economic growth.
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