What Miliband doesn't understand about immigration

Labour leader Ed Miliband is expected to announce today that he thinks the number of low-skilled migrants coming to the UK is too high. Miliband thinks that low-skilled immigrants will come to the UK and compete with Britons. He says British citizens must get a "fair crack of the whip".

Miliband seems to have neglected that Britain is not a closed economy. Those who would wish to migrate to the UK can compete for British jobs even if they are barred from the country by politicians. When a car factory is moved from the UK to Turkey, that is an example of Turkish workers competing for British jobs.

There is also an undertone of the 'lump of labour fallacy' here. The number of jobs available is not fixed. Competition in labour as in all things allows us to find better ways to use resources, and this gets passed on to all British consumers in the form of lower prices.

It would be unfair to say that it's just Miliband that gets this wrong; many politicians don't grasp that immigration restrictions won't do anything to help Britain's economy. The National Institute of Economic and Social Research's Jonathan Portes on why we shouldn't aim to reduce net migration:

It is simply not credible for the Prime Minister to claim that the UK is “open for business”, and for his chancellor to say that he is prepared to take the “difficult decisions” to boost growth, while at the same time making the primary objective of immigration policy the reduction of net migration. Immigration, like trade, can help boost productivity and growth over the medium to long term in a number of ways. It should therefore be central to our growth strategy. That will require a change of attitude and mindset on the part of government and policymakers. If we want to be serious about growth, we need to be positive about migration.

(Full article)