Is immigration affecting the economy in a negative way?”Immigration is the international movement of people into adestination country of which they are not natives or where they do not possesscitizenship in order to settle or reside there, especially as permanentresidents or naturalised citizens, or to take-up employment as a migrantworker.” by wiki immigration. Byexploring the positives and negatives of immigration this essay will enquirehow immigration contributes the economy.
In this case, negative refers to thedecrease in economic growth due to migration, whereas positive refers to theemployment of migrants, contributing to an increase in the economic growth.Economic growth is an increase in the capacity of an economy to produce goodsand services, compared from one period of time to another. On a global scale,the consequences for the economy due to immigration includes things such asthem claiming welfare benefits. Conversely, immigrants show an increase in thelabour force; they are more likely to be of working age. Some would argue thatimmigration benefits the consumers as immigrants tend to take on the lower paidjobs that many citizens are not interested in. However, countless immigrantsface language barriers and therefore are less likely to be accepted into a job,leading them to depend on government paid housing and money, especially if theyare classed as illegal immigrants. It is argued that immigrationcontributes to the growth of the economy through paying more in taxes than theyreceive in benefits and other state assistance, since 2000 immigrants wereestimated to have contributed £1.
34 for every £1 the government took out in theEU alone. Furthermore, outside of the EU, immigrants contribute £1.02 for every£1 received, therefore these contributions increase economic profits as manyimmigrants are giving more than they are receiving. As the majority ofimmigrants are of the working-age, they are likely to be putting in more thanthey are receiving through the hard labour of low-paid work. The net fiscalimpact of immigration is the difference between taxes and other contributionsimmigrants make to public finances, and the cost of the benefits and publicservices they receive (there is no “correct” estimate of this). Studiessuggests the fiscal impact in the UK is relatively small, with it contributingto 1% of the countries Gross Domestic Products. Depending on how young, skilledand high-paid work the immigrants contribute to will mean that they produce apositive fiscal impact, whereas unemployed immigrants or those working inlow-paid jobs produce the opposite.
Internationally, studies have been carriedout resulting in the findings of the net fiscal being better in the UK thanmany other countries. However, the positive fiscal impact of immigration wasshown to be better in 10 countries than that of the UK, including; Switzerland,Belgium, Portugal and Spain. In 2008, the University of Cambridge carried out astudy which showed that the immigrant population contribution in 2003-4 wouldhave been about +0.6 billion if the UK had been balancing their budget. On the contrary, if immigrants have family still living intheir original country, they are likely to send money over to them in the hope ofgiving them a better quality of life. Although this positively increases theflow of foreign currencies and their economy, it affects the host countynegatively. In America alone, according to the country’s central bank, $27billion in remittances was sent to Mexico, however Mexican president EnriquePena Nieto quoted “remittances are an invaluable contribution to nationaldevelopment and indispensable for millions of Mexican families.” A remittanceis a transfer of money by a foreign worker to an individual in his or her homecountry.
Money sent home by immigrants competes with international aid as oneof the largest financial inflows to developing countries. On a global scale,remittances have grown from $296 billion in 2007 to $445 billion in 2016,therefore Mexico is not the only country relying on remittances, as countriessuch as Asia and Latin America also receive money from the U.S. immigrants around the world.. MarketplaceMoney from wealthier European countries is usually sent to East and CentralEurope and to Africa, which doesn’t come as a shock due to the average wage ofwealthier countries will be able to accommodate for this.
Overall, the impact of remittances on the growth of theeconomy for host countries is drastically negative due to the mass amount ofmoney leaving their economy annually. In contrast, many are of the opinionthat immigration is a burden on the growth of the economy due to theunemployment of immigrants, outside and inside of the EU there are 5,309,580number of claimants receiving benefits (by Telegraph, how much do immigrantsclaim? article). However, this article does state that this figure onlyincludes people who were non-UK nationals at the time, but they could now beclassified as a British citizen and it also excludes illegal immigrants. Themain reason presented for this substantial figure incorporates immigrants inlow-paid work ‘settling down’ and having children, which then leads to thembeing unable to afford the expenses of childcare and in the worst cases,necessities. Due to this, many immigrants are unwillingly forced to work alimited number of hours for low-paid labour. Welfare is undoubtedly animportant factor when it comes to jobs, as the withdrawal of the benefitsleaves individuals facing significant marginal effective tax rates, reducingthe incentive to take the work. This becomes even more of a problem when the systemis geared towards people finding full-time work (which is what the majority ofimmigrants cannot do due to childcare costs), making coming off and on benefitsmore difficult.
Due to this the governments have suggested that welfare reformwill encourage more national citizens to take up work on places such as farms,where immigrants are stereotyped to work in this sector. Numerous farmers statethat immigrants from developing countries such as; Romania and Bulgaria aremore flexible, more hardworking and more productive, because of theconsequences of the wage difference between their developing country and thenative country. Ababi Mircea, a Romanian worker who immigrated to the UK gaveevidence of the wage difference when he expressed that ‘the money I make herein one week I make in one month in Romania’ (presented by the BBC). Because ofthis, it is no wonder that immigrants do low-paid labour as to them it is worththe work they put in issues onlinewebsite. Furthermore, at the end of2010 2.
1 million additional jobs were created, with 53% (1.1 million) of thembeing taken by non-UK born workers. For some immigrants, this would have beenbeneficial as this would have allowed them to make an earning and provide fortheir families, while also being able to contribute to taxes improving theeconomy. Extensive academic evidence shows that immigration does not harmnative employment or wages, although there can be short-term negative effectsif there is a large inflow of immigrants to a small region, if immigrants areclose substitutes for native workers, or if the destination economy isexperiencing a downturn. A native worker means that two individuals do notcompete for the same type of job, for instance, immigrants may be lessproductive or educated than some share of the native workers, making them fitparticularly at some types of labour intensive jobs. Realising the benefits ofimmigration hinges on how well new arrivals are integrated into theirdestination country’s labour market and into society.
Today immigrants tend toearn 20 to 30 percent less than native-born workers. But if countries narrowthat wage gap to just 5 to 10 percent by integrating immigrants moreeffectively across various aspects of education, housing, health, and communityengagement, they could generate an additional boost of $800 billion to $1trillion to worldwide economic output annually. This is a relativelyconservative goal, but it can nevertheless produce broader positive effects,including lower poverty rates and higher overall productivity in destinationeconomies the guardian, jobs and wages.