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Sunday, April 23, 2006



For the UK these are mostly (except for the effect on interest rates) five year old news:


"MIGRANTS, according to research published by the Home Office this week, can help boost growth, reduce inflationary pressure and fill labour-market shortages."

In the USA some studies have argued that a large part of the recorded improvement in productivity of the past decade has been a statistical effect, due to illegal immigrants: they are not fully counted in the labour force, but their output is, thus flattering the average for legal workers who do get counted.

Also, while low cost workers clearly benefit the rest of the economy in the aggregate, it would be interesting to have an idea of their distributional effect.

One effect is already obvious from the articles above: by keeping interest rates lower, immigrants have made house prices higher, never mind the direct effect on house prices due to increased demand for lodging (I guess many know someone who has made a lot of money buying dilapidated houses for renting rooms to immigrants).

For people with assets (businesses, shops or houses, or securities thereof) or with safe government or government licensed jobs the arrival of cheap immigrants is definitely a large boost.

Moreover the government itself is in that position: as ministers have stated the availability of cheap immigrants is essential to drive down salaries for the lower end NHS jobs and save money on taxes for the well off:


"The speed with which the government has executed a U-turn in its approach to immigration owes much to its need to bring in foreign workers to meet its recruitment targets for the NHS and education."

My impression is that the government fully understands that there are many millions of well off middle class middle aged people with a safe job that are just waiting to inherit their elderly parents' assets and that they will vote accordingly, and immigrants don't vote and are desperate for a job anyhow.

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