The Home Secretary announced a strict migration cap on non-EU citizens. It is supposedly to help slim the deficit. Three points come to mind:
First, immigration into a country is good for the economy. Economies are not static but grow and diminish by sector disproportionately. One migrant’s job gained is not necessarily a local’s job lost. Also, immigration is a transaction between a foreigner and the economy. The individual will incur the cost of not finding work, not the country. If the worker is successful, wealth is disseminated throughout the economy and indirectly creates jobs. The economy also flourishes because of the added diversity.
Second, immigration is mostly costly because of welfare. Instead of limiting the number migrants, the government should restrict access to public programs. Then the government will run profits from the worker’s tax revenue.
Third, Chicago economist Gary Becker recently argued a price system for migration would be more efficient than a cap. True, although that considers only nominal price. The risk, opportunity cost, and social costs associated with migrating should not be assumed away. A high priced visa could be too high if these factors are not considered.
Although these prices and the economic benefits of immigration are tempting, it’s politically impractical to assume complete open borders would be accepted. A marginally more welcoming border is almost as good. As long as competitor economies don’t receive workers that would have come to the UK.
My only concession: it takes time. Benefits will not show instantly and will not be clearly contained.