Natives Do Benefit From Immigration Too

The public perception of immigrants is often negative, linking them almost exclusively to poverty and security risks. Despite this conventional wisdom, which materializes during elections, there is no proof that immigration has a negative effect on natives. The opposite, in fact, may be true. Immigration may well affect natives positively. That is what some economic empirical studies have recently shown.

If common sense commands us to believe that more immigrant workers should put downward pressure on the wages and employment of native workers, economic reality refutes it. Indeed, a recent analysis, conducted in 14 European countries from 1996 to 2007, emphasizes the existence of positive effects of immigrants on the employment of native workers. For instance, for most companies the supply of more workers performing manual tasks generates the need for more technicians and engineers who typically perform more complex tasks. As, generally speaking, migrants tend to occupy low-skilled jobs while natives hold supervising positions, the result of this specialisation is that, outside time of crisis, more immigrants can generate a higher demand for native workforce.

Tasks, not native workers, are replaced by immigrants in the production process. Natives may thus have an opportunity to move into tasks, which pay better and that are complementary to manual jobs, for which they compete among each other and not with immigrants. Immigrants boost native workers' employment only if the latter are flexible enough to adjust to new labour organizations.

Inflows of immigrants tend to boost the supply of jobs for the natives who benefit from a comparative skills advantage. And when it comes to wages, due to the complementarity between these migrants and natives' skills, a raised supply of manual tasks tend to increase the relative compensation for skilled workers, making them better paid. In addition, migrants help reducing the prices in some industries where they are predominantly employed, thus increasing the purchasing power of the natives.

A recent study shows that immigrants are beneficial to the French economy: if they receive 47.9 billion euros from the State, they pay 60.3 billion to it. In other words, the balance is 12.4 billion euros positive for the state budget. The taxes paid by the migrants are much higher than what it actually costs to the State in terms of social transfers, thus sweeping aside the idea that immigrants are a burden to the social budgets. Given the characteristics of France's economy, one should not be surprised if the figures turned to be positive if a similar study was to be done for the United Kingdom.

The economic case for labour migration is likely to become more urgent in the coming decades. As human capital has become the most crucial economic determinant in an increasingly knowledge-based world, European governments are increasingly recognizing the importance of skills in generating productivity and growth. Highly skilled workers are vital for ensuring innovation and improving economic efficiency, and therefore for creating new jobs. A study on the impact of the Green Card programme for foreign IT workers, for example, estimated that each highly skilled migrant created on average 2.5 new jobs in Germany. If attracting skilled immigrants becomes key to national competitiveness, there are serious concerns about whether Europe is attractive enough in comparison to North America.

Despite substantial structural unemployment in many European countries, native workers are often selective in their choice of occupations and locations. So although the portion of low and semi-skilled jobs is declining, there are substantial gaps in a number of these occupations. Natives' increasing skills over the decades associated with inadequate remuneration and low status explains why these gaps are increasingly filled by labour migrants. One just needs to open his eyes to observe that immigrants tend to work the jobs that natives do not want to take.

Moreover, ageing populations imply a higher ratio of economically inactive to active populations, thus placing a strain on welfare systems. Migrant workers are likely to be the ones paying the health and pensions bills, which are to become more expensive in the future.

American and European publics have recently demonstrated a certain propensity to channel their anxieties into migration issues. These anxieties are more the result of deep socio-economic changes that occurred during the last few decades -- which make native citizens feel stranger in their own country -- than rational responses to the impact of immigration which, as seen, tend in fact to be good for them.

Despite the demands of increasingly numerous populist voices to stop immigration, migration can't be closed down because migrants are part of how modern economies are managed. Simply speaking, immigration is part of national economic policy and needs to be viewed as such by the citizens.

In most countries, the migration debate turns to be rather demagogic, mainly because political decision-makers assess this issue through voters' perceptions rather than through demographic and economic realities. Migration policy is a dilemma stemming from tension between economic and electoral considerations that our uninspired representatives seem unwilling to reconcile. Our leaders should certainly remember that when governing a nation, pragmatism and truthfulness are required, virtues which, when it comes to immigration, unfortunately give way to demagogy and even xenophobia.