Tuesday , September 26 2017
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Immigration Makes Us More Prosperous

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This is a really important fact that people don’t talk about enough: McK & IMF: #immigrants (living not where born) account for 3.4% of world pop but produce 9.4% of world output/.7tn https://t.co/tcFELcPYid — Linda Yueh (@lindayueh) December 1, 2016 That is a huge gap. Immigrants’ economic output is almost three times their weight as a proportion of the population, a difference that adds up to trillion annually. Why would this be the case? Well, immigrants are typically pretty motivated people. Packing everything up and moving out of the country and into a completely new environment is a very motivated and committed thing to do. It is a signal that says “I want to do something really worthwhile with my life.” Migration also takes lots of different skills such as the ability to navigate bureaucracy and different legal and cultural frameworks, the ability to learn a foreign language, and the ability to do in-demand work in the destination country. And while there may be bad apples who go abroad to commit crimes, or leech off welfare, or engage in terrorism—just as there are some native individuals who engage in crime, and terrorism, and welfare fraud—the bigger picture detailed in the McKinsey/IMF study is one of migrants making the world much richer. Indeed, immigrants commit a disproportionately low amount of crime per person.

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This is a really important fact that people don’t talk about enough:

That is a huge gap. Immigrants’ economic output is almost three times their weight as a proportion of the population, a difference that adds up to $3 trillion annually.

Why would this be the case? Well, immigrants are typically pretty motivated people. Packing everything up and moving out of the country and into a completely new environment is a very motivated and committed thing to do. It is a signal that says “I want to do something really worthwhile with my life.”

Migration also takes lots of different skills such as the ability to navigate bureaucracy and different legal and cultural frameworks, the ability to learn a foreign language, and the ability to do in-demand work in the destination country.

And while there may be bad apples who go abroad to commit crimes, or leech off welfare, or engage in terrorism—just as there are some native individuals who engage in crime, and terrorism, and welfare fraud—the bigger picture detailed in the McKinsey/IMF study is one of migrants making the world much richer.

Indeed, immigrants commit a disproportionately low amount of crime per person. Skilled and highly-motivated migrants probably have less time or reason to engage in criminal activities.

And, as the FT notes: “The study also cites widespread academic work indicating that migration does not harm domestic employment or wages despite short-term negative effects in limited areas. Instead it emphasises a wage gap of 20-30 per cent between immigrant and native workers, adding that bringing immigrants’ pay closer to national averages would also boost output.”

Of course, these facts do not take away the cultural distress of people who voted for Brexit and Trump, people who may feel left behind by globalization.

But immigration restrictionism to appease these people is throwing the golden goose out with the bathwater. Immigration makes us as a whole much richer. A much more sensible answer than immigration restrictionism is to use public funds derived from the benefits of immigration to address some of these concerns. Such programs should include job retraining programs for factory workers displaced by job migration, providing language and assimilation classes for new immigrants, and screening measures to prevent the movement of people who might intend to commit acts of terrorism.

According to some theories, completely open borders would be even more beneficial, doubling global GDP.

In practice, that may not work, but a sensible migration policy would be to seek to move closer to the paradigm of open borders, to see if the theory holds up. Unfortunately, in the post-Brexit, post-Trump, post-fact world, we see no such sensible policy. And we probably won’t for a long while yet.

About John Aziz
John Aziz
I am interested in global trade dynamics, debt dynamics and the flow of credit, moneyness and currencies, unclearing markets, futurology, civil libertarianism, drone warfare, market democracy, solar technology, ecology, the psychology of bubbles, behaviourism, Bayesian statistics, subjectivism and a whole load of other stuff.

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