Immigration makes us richer


Much nonsense is talked about the effects of immigration: and few of the truths are well known. The greatest truth of which is that it makes us, the natives, the indigenes, richer. And no, not just because it means there is a plumber about who doesn't require a second mortgage to fix the toilet.

We've all seen the various figures bandied about: immigrants bring in new skills in short supply: ah, say Migrationwatch, but immigration only raises native incomes by £4 a year (or was it week?) each. And then the response that yes, but the incomes of the immigrants have risen tremendously, making immigration as a whole hugely an increase in general human happiness. Then someone mentions that the immigrants steal "our jobs" and then but immigrants have needs and thus create jobs....and around the whole circle we go once again.

However, there's a very Adam Smithian attempt to look at this all here. The argument is obvious (as are all good ones once they've been explained to you): average incomes depend upon average productivity in an economy. The division and specialisation of labour increases productivity thus the more people there are around the more division and specialisation there will be and the higher productivity will be.....and so average incomes. Immigrants are more people and thus.....

Combining these effects, an increase in employment in a US state of 1% due to immigrants produced an increase in income per worker of 0.5% in that state.

What is further worth noting is that this was true of low skilled immigrants: for having more low skilled labour around means that we can indeed have that greater division and specialisation of labour, between the high skilled and the low.

So it isn't just that we're doing people a favour by allowing them in to share what our forebears built: immigration really does make us richer.