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National Data | The U.K.`s Immigration Disaster—And Ours
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April 21, 2010, 05:00 AM
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A U.K. General Election has been called for May 6. All the major parties desperately want to keep immigration out of it. But the fact is that, after 1997, Tony Blair`s "New" Labor deliberately triggered a massive influx very comparable to America`s post-1965 immigration disaster—after a generation in which immigration had been (comparatively) restrained, probably because of the lingering effects of Enoch Powell`s famous speeches.

Net legal immigration—the difference between the number of people arriving and leaving—was 48,000 when Labor took power in 1997. By 2004 it reached a record 244,000; in 2007 it was 237,000. Relative to population, that`s the equivalent of 1,185,000 in US terms.

By comparison, immigration to the U.S. was high but relatively stable over this period. In 2008, we admitted 1.1 million legal permanent residents, up from 800,000 in 1997. (The 2008 net U.S.  figure, deducting emigrants, was 862,955 [PDF])

As the recession hit the U.K., net immigration began to fall. Yet the total still stood at 163,000 in 2008—more than three-times the level attained in the booming late 1990s. (Similarly, as VDARE.COM has just reported, U.S. legal immigration increased during the recent recession).

Result: Just-released figures show total U.K. employment rose from around 25.7 million in 1997 to 27.4 million at the end of last year, an increase of 1.67 million. But immigrants took an amazing 98.5% of those new jobs.

Conservative opposition immigration critic Damian Green, citing unpublished data, reports the number of British-born workers employed at the end of last year was just 25,000 more than when Labor came to power. In the private sector, the number of British workers actually fell by 726,000—from 18.4 million to 17.7 million. Last year, the Organization for Economic Cooperation and Development (OECD) said that over ten years only Luxembourg had seen a larger share of new jobs taken by immigrants than Britain.

 

Observing that `British workers have been betrayed," Mr. Green claims that a Conservative government would "…reduce net immigration to the levels of the 1980s and 90s—tens of thousands a year, not the hundreds of thousands we have seen under Labor.` [So Much For British Jobs For British Workers, Daily Express, February 8, 2010]

 

As VDARE.COM has repeatedly pointed out, most jobs created in the U.S. during this period also went to foreign-born workers. But our displacement rate was still not as amazing as the U.K.`s under Labor: unpublished BLS statistics reveal that some 63% of jobs created since 1997 went to foreign-born workers—just two-thirds of new jobs, as opposed to essentially all of them.

 

The U.K. may presage what the future holds for the U.S. in other ways. Obama-style national health care has long been part of the U.K.`s socialist life style. And, coupled with generous retirement benefits and below-replacement native population growth, it has for years pushed British liberals to beat the drums in favor of mass immigration.

Their reasoning: Young immigrants pay taxes on their earnings, thereby helping to: expand the tax base, keep tax rates low, and defray the cost of providing health and retirement benefits to natives. In this feel-good scenario, immigrants create jobs for natives.

That was the thinking of PM Gordon Brown when he rejected the idea of an immigration quota, which he said would do "great damage to British business".

But can immigration help pay for the welfare state? No way. Immigrants are poorer, pay less tax, and are more likely to receive public services than natives. In its path breaking study of the fiscal impact of U.S. immigration, the National Research Council found that an immigrant without a high-school education imposed a net fiscal drain (taxes paid minus services used) of $89,000 over his lifetime. For those with only a high-school degree, the net fiscal drain was $31,000. (That`s in 1997 dollars—about one-third more in 2010 dollars.)

Only immigrants at the high end of the educational spectrum—with more than a high-school degree—paid more tax than they used in government services.

These figures pertain to foreign-born individuals. They do not reflect the costs of educating, providing health care, and other services for their U.S.-born children.

While details may vary, the same conclusion undoubtedly applies to the U.K.:  immigration increases government deficits.

At best, the fiscal benefits of young, unskilled immigrants are limited to pay-as-you-go retirement systems such as Social Security. Young immigrants pay retirement system taxes long before they receive benefits.

But this merely postpones the day of reckoning. When immigrants retire  they create the need for ever larger immigrant cohorts to defray their retirement costs. In this context immigration is a Ponzi scheme, not a panacea.

And while immigrants in both the U.S. and U.K. are generally younger than natives, they also have less education and higher fertility rates that the native-born. At best this foreign influx can temporarily ease the shortfalls of national retirement systems in these countries. In other parts of government their net fiscal impact is negative—i.e., they pay less in tax than they receive in benefits.

 

But while the fantasy that immigration can mitigate fiscal deficits reigns supreme among liberals in both the U.S. and Britain, the two countries` immigration policies differ significantly. Labor supports a points-based system that gives priority to skilled entrants who enter legally. Under the points system the door is currently closed to unskilled workers from outside the EU. Rules are also being tightened in foreign students working part time. [Labour`s betrayal of British workers: Nearly every one of 1.67m jobs created since 1997 has gone to a foreigner, by James Chapman, Daily Mail, April 8, 2010]

Ironically, this more selective approach, albeit no doubt good for overall economic output, seems to have made immigrants to Britain even better at taking jobs from natives.

 

In the U.S., Democrats are counting on "Comprehensive Immigration Reform" a.k.a. amnesty to confer citizenship (and the right to vote, for Democrats) on millions of unskilled illegal immigrants. Neither party will discuss the anti-skills, pro-"family unification" tilt to legal immigration policy.

 

An immigration moratorium is still off the agenda of the Beltway Establishment, liberal and "conservative" alike—even with unemployment in double digits.

Edwin S. Rubenstein (email him) is President of ESR Research Economic Consultants in Indianapolis.