The right tries to blame youth unemployment on immigration -- again

MigrationWatch has been allowed to get away with irresponsible scaremongering for too long.

Eighteen months ago, MigrationWatch published a report which attempted to show a relationship between immigration and youth unemployment in different parts of the UK. The methodology was comprehensively demolished here by my IPPR colleague Sarah Mulley -- but not before the report had generated the desired round of headlines such as "Migrants rob young Britons of jobs".

Today, as the nation worries about a "lost generation" with over a million young people unemployed, and an increasing proportion out of work for more than a year, MigrationWatch are at it again, with another report: Youth unemployment and immigration: more than a coincidence.

The report takes two dates -- 2004, when Eastern Europeans started coming to the UK in large numbers after the expansion of the European Union, and 2011. It notes that over this period in the UK, the number of Eastern European workers rose by around 600,000, while the number of unemployed young people rose by around 450,000. The head of MigrationWatch, Andrew Green, then comments that:

Correlation is not causation but when the two statistics are placed side by side most objective people would consider it a very remarkable coincidence if there was no link at all between them.

And while the report rambles on for another six pages, that's really about it. MigrationWatch have clearly learned the lesson of their last attempt: the more detail there is in their report, the easier it is for people who actually understand statistics or economics to show them up. Why bother, if simply asserting that the two numbers are suspiciously similar is enough to have the desired effect?

To anyone who is actually interested in how immigration affects our labour market, there is a good deal of high quality research on the subject: a useful review of the literature can be found here. In summary, while some studies have found some impact on wages, particularly towards the bottom of the wage distribution, hardly any studies have found any significant impact on overall unemployment. (Coincidentally, the National Institute for Economic and Social Research is publishing another report today, in the first major study to look at National Insurance Number data to examine the same issue.)

I don't wish to duplicate this body of research, nor get too deep into the detail of economic modelling; so I will confine myself to highlighting three points, which demonstrate the total inadequacy of MigrationWatch's report.

First, the choice of dates. MigrationWatch's chosen start-date is 2004. That is understandable, in the sense that it is when large scale Eastern European migration to the UK began. But it hides the fact that youth unemployment clearly started rising before that, around 2002 (see here). If immigration caused unemployment, you would expect to see immigration starting to rise first, followed by youth unemployment. In fact, it is the other way round. (Some readers might be tempted to reply that other kinds of immigration were rising before 2004. But while this is true, it can't help MigrationWatch, because those other kinds of immigration started rising in the late 1990s, after which point youth unemployment continued to fall for five years.)

Second, the fact that MigrationWatch focus on the change in the two variables across the whole period. This makes the numbers look at least vaguely similar. But what happens if you look in slightly more detail within the chosen period? If MigrationWatch's hypothesis was right, you would expect to see the steepest increase(s) in youth unemployment at the same time as, or shortly after, the big increase(s) in immigration. But here too, the picture is the opposite: the big increase in youth unemployment came in 2008 and 2009, during the recession caused by the financial crisis (that being a clue to what might really be going on), which was precisely the time when net immigration from Eastern Europe fell close to zero (see fig 2.2 here. To be fair to MigrationWatch, this is plainly visible in the graph on p.2 of their report, though it isn't mentioned in the report or in the press notice sent to the media.)

Third, the lack of any attempt to test the correlation across different parts of the UK, or across different countries. Of course, as I have already pointed out, when in a previous report MigrationWatch did try to show that the correlation held across different parts of the UK, it was an embarrassing failure. What about other countries? It looks unlikely that there is any correlation here: the countries in the 'old' EU which have seen the steepest rises in youth unemployment since 2004, including Spain and Greece, have not had very high levels of migration from Eastern Europe; while Germany, which has had relatively high migration from Poland (despite maintaining transitional controls for the longest possible period), has relatively low youth unemployment.

Given the contents of the report, its title -- More than a coincidence? -- is almost funny. But in the end, yet another media intervention, designed to generate a round of headlines (in the Express, Telegraph, and Sun, and on the BBC) blaming historically high youth unemployment on foreigners, isn't funny at all. It is irresponsible and pernicious, as well as a distraction from the serious debate over practical measures to alleviate youth unemployment -- including IPPR's proposal of a job guarantee for those out of work for more than a year.

Britain clearly has a youth unemployment problem: one which started before the financial crisis, but has since risen to critical levels. But its causes are too complex to be reduced to blaming immigration, just as the effects of immigration on the labour market are too complex to be reduce to the endlessly repeated headlines about "foreigners taking all the new jobs". New migrants compete for jobs with existing residents, but they also fill gaps, make our labour market more flexible, and bring energy and creativity, all of which promote growth -- meaning more jobs to go around. The net effect of all of this on the overall economy is hard to assess, but most economists agree it is positive. The net effect on different groups within the economy is even harder to assess. Again, for most, it will be positive -- though not for all. But this needs careful research, and honest presentation, not the kind of scaremongering which the media has let MigrationWatch get away with for too long.

Matt Cavanagh is an Associate Director at IPPR. Follow him on Twitter @matt_cav_

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Why Angela Merkel's comments about the UK and US shouldn't be given too much weight

The Chancellor's comments are aimed at a domestic and European audience, and she won't be abandoning Anglo-German relationships just yet.

Angela Merkel’s latest remarks do not seem well-judged but should not be given undue significance. Speaking as part of a rally in Munich for her sister party, the CSU, the German Chancellor claimed “we Europeans must really take our own fate into our hands”.

The comments should be read in the context of September's German elections and Merkel’s determination to restrain the fortune of her main political rival, Martin Schulz – obviously a strong Europhile and a committed Trump critic. Sigmar Gabriel - previously seen as a candidate to lead the left-wing SPD - has for some time been pressing for Germany and Europe to have “enough self-confidence” to stand up to Trump. He called for a “self-confident position, not just on behalf of us Germans but all Europeans”. Merkel is in part responding to this pressure.

Her words were well received by her audience. The beer hall crowd erupted into sustained applause. But taking an implicit pop at Donald Trump is hardly likely to be a divisive tactic at such a gathering. Criticising the UK post-Brexit and the US under Trump is the sort of virtue signalling guaranteed to ensure a good clap.

It’s not clear that the comments represent that much of a new departure, as she herself has since claimed. She said something similar earlier this year. In January, after the publication of Donald Trump’s interview with The Times and Bild, she said that “we Europeans have our fate in our own hands”.

At one level what Merkel said is something of a truism: in two year’s time Britain will no longer be directly deciding the fate of the EU. In future no British Prime Minister will attend the European Council, and British MEPs will leave the Parliament at the next round of European elections in 2019. Yet Merkel’s words “we Europeans”, conflate Europe and the EU, something she has previously rejected. Back in July last year, at a joint press conference with Theresa May, she said: “the UK after all remains part of Europe, if not of the Union”.

At the same press conference, Merkel also confirmed that the EU and the UK would need to continue to work together. At that time she even used the first person plural to include Britain, saying “we have certain missions also to fulfil with the rest of the world” – there the ‘we’ meant Britain and the EU, now the 'we' excludes Britain.

Her comments surely also mark a frustration born of difficulties at the G7 summit over climate change, but Britain and Germany agreed at the meeting in Sicily on the Paris Accord. More broadly, the next few months will be crucial for determining the future relationship between Britain and the EU. There will be many difficult negotiations ahead.

Merkel is widely expected to remain the German Chancellor after this autumn’s election. As the single most powerful individual in the EU27, she is the most crucial person in determining future relations between the UK and the EU. Indeed, to some extent, it was her intransigence during Cameron’s ‘renegotiation’ which precipitated Brexit itself. She also needs to watch with care growing irritation across the EU at the (perceived) extent of German influence and control over the institutions and direction of the European project. Recent reports in the Frankfurter Allgemeine Zeitung which suggested a Merkel plan for Jens Weidmann of the Bundesbank to succeed Mario Draghi at the ECB have not gone down well across southern Europe. For those critics, the hands controlling the fate of Europe are Merkel’s.

Brexit remains a crucial challenge for the EU. How the issue is handled will shape the future of the Union. Many across Europe’s capitals are worried that Brussels risks driving Britain further away than Brexit will require; they are worried lest the Channel becomes metaphorically wider and Britain turns its back on the continent. On the UK side, Theresa May has accepted the EU, and particularly Merkel’s, insistence, that there can be no cherry picking, and therefore she has committed to leaving the single market as well as the EU. May has offered a “deep and special” partnership and a comprehensive free trading arrangement. Merkel should welcome Britain’s clarity. She must work with new French President Emmanuel Macron and others to lead the EU towards a new relationship with Britain – a close partnership which protects free trade, security and the other forms of cooperation which benefit all Europeans.

Henry Newman is the director of Open Europe. He tweets @henrynewman.

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