One reason to favour a more open and liberal migration regime is because of the gains in economic efficiency and prosperity it would bring, because of the benefits brought by younger and more active workers who pay more in taxes than they take in benefits, and so on. But when people voice this argument, there’s one response that is almost instantly trotted out. This is to say that, even if it true that a more open regime is better in the aggregate, it isn’t better for the least advantaged among the indigenous population because labour market competition from the incomers depresses wages and often leaves low-skilled native workers out of a job. Now conceding, if strictly for the sake of argument, that there might be other reasons to restrict immigration (cultural impacts on the native poor, whatever …) and focusing on the economic argument alone, I can’t see that this objection makes much sense. If there’s something that is good in the aggregate, but has bad distributive consequences, the solution is surely to use the tax-and-transfer system to fix those distributive outcomes. You could either do this directly (maybe, for example, taxing the surplus to fund a citizen’s or basic income) or indirectly, by funding better education or training. But it doesn’t seem to make much sense for forego the aggregate benefit.
Now an objection to this might be that, given a lack of confidence that political leaders will actually introduce such redistributive measures (rather than, say, letting aggregate gains flow to the one per cent), it is rational for indigenous workers and their political representatives to lobby for tighter labour protectionism via immigration controls. But given the obvious downsides to that second-best strategy, particularly in its divisiveness and its fostering of xenophobia and racism, it seems clear that the left should prefer to take the aggregate benefits and redistribute them. Certainly it seems as if the left should be making such an argument rather than just pandering to “anxieties” among their traditional constituencies as the likes of “Blue Labour” tend to do.
Two questions occur to me. First, am I right about the “in principle” economics of this? Second, are there respectable political counterarguments, even if I am right about the economics?
[Note that this post is not about the right of the state to restrict migration, a matter on which I’m far more sceptical than most people. It concedes that right for the sake of argument and focuses on what the best policy should be.]
