The Truth About Immigration #2 – The Economic Impact of Immigration

Whenever immigration is debated in the mass media we are told that irrespective of our views on this subject, we must acknowledge that immigration is of economic benefit to us as a nation and that we will suffer economically if we were to halt all further immigration. This is of course an assertion that we all instinctively know to be false, but how do we demonstrate that fact?

Firstly we need to understand how the economic performance of a nation is measured.

Economists invariably use Gross Domestic Product (GDP) as the key measure of economic performance and this is used to indicate when an economy is booming or when it is in recession. But what is GDP and how is it measured?

If we refer to Wikipedia as a reference tool, we find that there are several different measures of GD, but in broad terms GDP is the total value of all of all the goods and services consumed with the economy each year. Therefore, if the population of a nation is 50 million people and each person consumes goods and services to the value of £20,000 each, either money they have spent on themselves or that government have spent on them, the GDP will be approximately 50 million times £20,000, which equates to £1,000 billion (£1,000,000,000,000) using the generally accepted American value for a billion.

There are many ways in which the GDP of a nation can be increased, but usually increases in GDP are assumed to come from improvements in productivity. If the example nation we have discussed above increases individual productivity by 100% over a period of time, then all things being equal each person will command a salary double that enjoyed before and the GDP will also increase by 100% also. This does not always happen of course, because sometimes the benefit of the increased productivity is enjoyed only by the owners of the large businesses employing the ordinary people, and if these corporations are multinational they may be able to take their profits out of the country, in which case an increase in productivity may not result in a proportionate increase in GDP, if any at all.

Another way in which GDP can be increased is by increasing the population of a nation.

Obviously if the population of the example nation we have discussed above was to increase by 10%, then assuming all of the additional people were able to find work and earn £20,000 each, the GDP of the nation would increase to 55 million times £20,000, which would equate to £1,100 billion, and the government could boast that their policies had resulted in a 10% increase in GDP.

Even if all the new people were not able to find work, as long as they were paid benefits with which to sustain them while they were unemployed, there would still be an increase in GDP and the government would still use this increase as a pretext to boast about the ‘efficacy’ of their economic policies, and this is where immigration comes in.

The population of a nation can be increased by a number of factors, but these effectively boil down to one of two causes; natural population increase, where births outweigh deaths each year; or by immigration, where inward migration exceeds outward migration each year.

If in the example nation of 50 million people we have discussed above there is an exact balance between births and deaths so that the size of the population is static, one way for the government to fraudulently make it appear that they have created economic growth would be to allow a net inward flow of 250,000 migrants each year.

If all of these migrants found work with pay of £20,000 per annum, then the original £1,000 billion GDP measure would be increased to 50,250,000 times £20,000, which equates to £1,005 billion. This would effectively boost GDP by half of one percent. This is not a lot, but in economic circumstances in which annual growth in GDP is often only 1% per annum, 1.5% per annum growth makes the economy look so much healthier. This is one reason why governments like net inward migration, because it artificially makes their economic policies look good, when as in this example, they have not made any of the ordinary people of the nation better off – everyone is still earning and spending £20,000 per annum.

In fact, even when the immigrants do not find work and simply sponge off the state, immigration still causes GDP to rise, because the value of goods and services being consumed increases irrespective of whether that increase is funded by earnings, where the immigrants are employed, or by benefits when they live off the state. This is why governments like immigrants to qualify for state benefits immediately they arrive, because this creates an immediate increase in GDP thereby artificially making their economic policy look good.

This is also why governments are unconcerned that in an otherwise stagnant economy, immigration causes increased competition for jobs often leading to indigenous workers being displaced and forced on to benefits, because irrespective of whether immigration leads to unemployment or not, as long as those made unemployed can claim benefits, it will lead to an increase in GDP and make government economic policy look good.

During times of economic stagnation however, such as we have been experiencing throughout most of the West for several decades now, and where there is little or no increase in capacity within the economy to employ new people, net inward migration means there is increased competition for jobs, housing and public services and the ‘national cake’ is simply divided up between more people, making everyone slightly poorer. Everyone that is except the owners of large businesses who benefit from the wage stagnation caused by increased competition for a finite number of jobs and who are therefore able to make bigger profits each year because wage stagnation creates the opportunity to increase profit margins on manufactured and agricultural goods, leading to higher profits without the need to increase the price of their produce.

As we can see from the above, governments are unconcerned by continued mass immigration, and in fact actually facilitate and in some cases promote it, because it creates the illusion of economic growth by increasing the standard measure of economic activity, the GDP, even though the economy may otherwise be stagnant or in recession. Worse still, if the unemployment caused by high levels of immigration results in either immigrants or members of the indigenous community living on benefits, despite the illusion of economic growth, the economy may actually be rendered in an even worse state if the increase in unemployment benefits paid cannot be funded from taxation and is  funded from government borrowing.

There are no real benefits to the vast majority of the population of a country from net inward migration. The overall measure of GDP increases because of it, but it is the share of GDP enjoyed by each individual person that determines whether or not they are better off, and a closer measure of this would be GDP per capita. If we made the primary measure of economic performance GDP per capita, immigration would no longer create the illusion of economic growth and in most cases would have the opposite effect, showing that the wealth generated from within our economy was simply being spread increasingly thinly between more and more people.

Only underdeveloped countries, such as the USA and Canada and Australia were during the 18th, 19th and 20th Centuries, and to some extent still are today, actually benefit from net inward migration. When the capacity of the land in terms of the space and the natural resources offered is so great that the land and its natural resources lie untapped, then and only then will net inward migration be a benefit to the existing population. In these circumstances the new immigrants will occupy unused land, and occupy genuinely new jobs exploiting those untapped natural resources. Furthermore, the economic activity generated building houses for these new immigrants and as a result of them buying goods and services once they arrive, will create a genuine increase in both GDP and GDP per capita.

Today however, Britain and Europe are full. We have no vast untapped resources and so immigration will not benefit our people one iota. Even in countries like the USA, Canada and Australia, the most easily exploitable natural resources have already been tapped and the scope to absorb new immigrants is rapidly diminishing.

Mass immigration into the West is driven primarily by population growth caused by uncontrolled birth rates in the Third World. It is claimed that the migrants are simply seeking a better life, and this is to some extent true, but they are the cause of the population growth that is creating poverty in their homelands and it is up to them to banish poverty by controlling their numbers. They need to achieve a situation in which their numbers are in balance with the capacity of their countries to support them, they should not be granted that better life at our expense — by taking what is ours — by insisting that we share what we have with them.

By Max Musson © 2017

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2 thoughts on “The Truth About Immigration #2 – The Economic Impact of Immigration

  1. They say we need immigrants which is rubbish..the more immigrants allowed in needs more people to cater for them hence more immigrants a never ending circle of mass immigration, its worth pointing out half of them never work and many live on benefits for life.

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