Why an immigration amnesty could benefit British workers

An amnesty for illegal immigrants can help boost their income, reducing socio-economic disparities.

One of the most depressing things about contemporary British politics is the extent to which one of the key arguments of the anti-immigrant right, that immigration increases unemployment among British-born workers, has gone unchallenged. Indeed, two years ago this capitulation reached its nadir with Gordon Brown's infamous slogan of "British jobs for British workers". This is a pity, because economists who have studied this area increasingly believe that the relationship between immigration and native-born unemployment is not straightforward. Also, there is evidence that restrictive immigration policies may make things worse for unskilled workers, not better.

Indeed a study by Harvard academics George Borjas and Lawrence Katz, found that immigration had a two-stage effect on wages and employment. Although unanticipated surges in immigration were found to depress wages in the short run, these lower wages then encouraged firms to increase investment, causing wages to rebound and unemployment to fall. Indeed, the post-war British and American labour markets have been able to deal with changes that were far more disruptive and wide-ranging than immigration, such as the simultaneous decline of manufacturing and rise of the service sector, the revolution in information technology and the breakdown of traditional gender roles.

Opponents of immigration also like to quote factoids that imply that immigrants are draining public services. For instance, Migration Watch claim that "there are more than 300 primary schools in which over 70 per cent have English as a second language; this is nearly a half million children". However, since new arrivals tend to be younger than the average Briton, and many return home during periods of unemployment, they consistently make a net contribution to the public finances. In some cases this can be substantial, with the Institute of Fiscal Studies finding that immigrants from countries that joined the EU in 2004 used £9.7bn worth of public services but paid £13.6bn in taxes between 2005/6 and 2008/9.

Paradoxically, some of the arguments made by the anti-immigration lobby inadvertently make the case for a relaxation of controls, rather than further crackdowns. Although the tendency of illegal migrants to cluster in low-paid and casual sectors of the economy contributes to increased inequality, this mostly occurs because short-sighted immigration controls restrict their opportunities to gain more productive employment. Just as the development community has gradually become aware of the importance of property rights in reducing the size of the black market in emerging economies, some far-sighted policymakers are beginning to realize that regularizing the status of illegal immigrants in the developed world may allow them to begin the process of joining the middle class.

Indeed, there is conclusive evidence that granting amnesty to illegal immigrants enables them to boost their income, reducing socio-economic disparities. As part of the last attempt at immigration reform 25 years ago, the United States granted amnesty to nearly 3 million immigrants. A study carried out last November by the American Immigration Council found that whereas their homeownership rates and skills levels lagged those of equivalent ages who had been born in the United States, this gap had almost completely disappeared by 2006. Indeed, many of those who came to the United States in their late 20s and early 30s without the equivalent of a secondary education had improved their levels of qualifications, suggesting that they had invested time and money in remedial education.

Therefore progressives need to be less apologetic about their support for immigration and more ready to confront those who use crocodile tears for working families to mask old-fashioned bigotry. Ed Miliband was correct to say in his inaugural speech as leader that, "we did not do enough to address concerns about some of the consequences of globalisation, including migration". However, addressing concerns means explaining the benefits of an open labour market and enabling illegal immigrants to work legally, not pandering to the fears and prejudices of Daily Mail leader writers or xenophobic think tanks.

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Labour trying to outdo Ukip on border control is the sure path to defeat

Only Diane Abbott has come out fighting for free movement. 

There is no point trying to deny it. Paul Nuttall’s election as Ukip leader is dangerous for Labour. Yes, Nuttall may not be a credible voice for working-class people – he ran as a Tory councillor in 2002 and has said that “the very existence of the NHS stifles competition”. Yes, he may be leader of a party which has (for now) haemorrhaged donors and supporters. But what Nuttall’s election represents is the coming of age for a form of right-wing populism which is pointed directly at Labour’s base. Along with the likes of Ukip's major donor Arron Banks, Nuttall will open up a second front against Labour – focused on blaming migrants for falling wages and crumbling services.

In the face of this danger, and the burning need to create a narrative of its own about the neglect of the communities it represents, Labour’s main response has been confusion. Barely a week has gone by without a major Labour figure repeating the touchstone myths on which Ukip has built its working class roots. Speaking on the Andrew Marr Show, Emily Thornberry openly backed the idea that migration has dragged down wages. “Do I think that at the moment too many people come into this country? Yes I do”, she said.

Another response has been to look for policies that transcend the debate altogether, while giving a nod to the perceived “concerns” that voters harbour about immigration. When Clive Lewis spoke to the Guardian some weeks ago, he also repeated the idea that free movement “hasn’t worked for many of the people in this country, where they’ve been undercut” and coupled this with compulsory trade union membership for those coming to Britain to work – a closed shop for migrant workers.

It is unsurprising that MPs on the right of the party – many of whom had much to say about the benefits of migration during the EU referendum – have retreated into support for immigration controls. This kind of triangulation and retreat – the opposite of the insurgent leftwing populism that Labour needs to win elections – is the hallmark of Labour’s establishment politics. Those who want to stand and fight on the issue should be concerned that, for now, only Diane Abbott has come out fighting for continued free movement.

At the moment, Labour is chasing the narrative on immigration – and that has to stop. The process that is shifting the debate on migration is Brexit, the British franchise of a global nationalist resurgence that is sweeping the far right to power across the western world. Attempt to negotiate a compromise on migration in the face of that wave, or try to claim it as an “opportunity”, and there is simply no limit to how far Labour will be pushed. What is needed is an ideological counter-attack, which tells a different story about why living standards have deteriorated and offers real solutions.

The reason why wages have stagnated and in recent decades is not immigration. Among the very few studies which find that migration has caused a fall in wages, most conclude that the fall is marginal. The Bank of England’s study, cited by Boris Johnson in the heat of the EU referendum campaign, put the average figure at 0.3 per cent for every ten percentage point rise in migrants in a given sector of work. That rises to 1.8 per cent in some areas.

Median earnings fell by 10.4 per cent between 2007 and 2015, and by 2021 are forecast to be lower in real terms than they were in 2008. For many communities, that fall in wages comes on top of the destruction of industry; the defeat of the trade union movement; the fire sale of Britain’s social housing stock; and years of gruelling Tory austerity. Nuttall’s Ukip will argue that economic and social insecurity are the result of uncontrolled immigration. To give an inch to that claim is to abandon reality.

Labour cannot win against Ukip by playing around with new and innovative border controls – it has to put forward a vision for a radically different kind of society. Under Jeremy Corbyn, Labour is closer than it ever has been to the kind of radical social and economic platform that it will need to regain power - £500bn of investment, building a million new homes a year, raising minimum wage and reinstating proper collective bargaining and trade union rights. What it needs now is clarity – a message about who to blame and what to do, which can cut through the dust kicked up by the Brexit vote.