Are immigrants doomed in Europe?
A lot of B.S. gets written about the effect of immigration and new immigrants on an economy. Nationalists love to play the xenophobe card (“they’re taking our jobs”), while business owners want as much labor in the market to drive down wages as they can get. In the E.U., this is complicated by the fact that most of the member nations are quite developed states where labor is not a commodity and workers are not interchangeable. A British lawyer may lack the linguistic and academic background to practice successfully in Italy whether she is allowed to start a practice there or not. One of the most interesting economic facts out there is that immigrants do push natives out of lesser-skilled positions, but rather than go on the dole, the natives move up the wage ladder to better jobs. Of course, there are no votes in this, so politicians pander to the worst in people and ignore this fact.
First, let me state that I haven’t done the primary research myself. I am relying on studies I have read and believe to be methodologically sound. Giovanni Peri and Francesco D’Amuri at the University of California at Davis have a paper called “Immigration, Jobs and Employment Protection: Evidence From Europe Before and During the Great Recession.”
They studied 15 E.U. states from 1996 to 2017. “We find that immigrants, by taking manual-routine type of occupations pushed natives towards more ‘complex’ (abstract and communication) jobs. Such positive reallocation occurred while the total number of jobs held by natives was unaffected. This job upgrade was associated in the short run to a 0.6% increase in native wages for a doubling of the immigrants’ share.”
Dr. Peri also worked with Mette Foged and wrote “Immigrants and Native Workers: New Analysis Using Longitudinal Employer-Employee Data,” which looks at the effects on Denmark. “We find that the increased supply of non-E.U. low-skilled immigrants pushed native workers to pursue more complex occupations…. While the highly educated experienced wage gains already in the short-run, the gains of the less educated built up over time as they moved towards jobs that were complementary to those held by the non-E.U. immigrants.”
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No one denies that the European labor market is weak. If Spain or Greece had America’s unemployment rate, it would be considered a miracle. For young people, the situation is genuinely depressing. However, the evidence shows that immigrants, whether from other E.U. nations or from countries outside the E.U., don’t harm the natives’ economic prospects except in the shortest term.
It is in that shortest term, though, that the ugliness of nativism shines out. In France, the National Front of the Le Pen family has established a solid base for itself based on disliking those who aren’t French. Given that about 10% of the population in France is Muslim, and that those are largely North Africans who live in the banlieus (French for “ghetto”) on the outskirts of the cities, it is not surprising that they are a target. When times get tough, there is a segment of the population that wants to blame people who look, speak or act differently rather than admit that the problem lies with the people at the top of the system who screwed up.
The recession has seen one major change in immigration, and that is the focus on the better-managed economies of the E.U. It used to be that Africans would get to Italy by boat, and they would stay there to set up a new life. Not anymore. Now, they tend to move on because there is not much for them in Italy. We find that they are settling in Germany, the Netherlands, Austria and Denmark rather than the countries of Southern Europe.
Of course, there are concerns about immigrants from within the E.U. as well. On New Year’s Day, restrictions on moving around Europe that had been slapped on Romanians and Bulgarians when their countries joined Europe came to an end. There was immediate and measurable panic in Britain.
Eric Pickles, the U.K.’s Secretary of State For Communities and Local Government, said that migrants from the two countries who are expected to start arriving in 2014 “will cause problems.”
And then there is the U.K. Independence Party (UKIP finished fourth in the last general election and wins local council and European seats with some frequency) — it wants Britain to leave the E.U. Its leader, Nigel Farage (a French surname, by the way), has said a “massive oversupply” of unskilled labor from all over the E.U. creates “big profits” for corporations while pushing the wages of British people down. Economic studies show he’s wrong, but he’s winning votes.
Right after Christmas, the Daily Mail (a lurid rightist tabloid) reported, “The Home Office-funded review — obtained by The Mail on Sunday — also suggests that the UK could lose out financially if low-paid Bulgarians and Romanians drive out Poles on higher wages, who pay more tax. Worryingly, the report also raises the prospect of tensions between Bulgarians and Romanians on one side and the first wave of Eastern European immigrants on the other.”
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What is most instructive is how the first wave of Eastern Europeans have enriched Britain. Thousands of Poles came and settled after communism ended. They have settled not only in London but all over. This report from the BBC explains how Polish immigrants have been the ideal additions to Llanelli, Wales (a place where 30% or so of the population speaks Welsh).
The simple fact is that Europeans do not have the same vast experience of immigration that Americans, Canadians, Australians and others have. They are in the process of acquiring it, and will eventually accept that importing talent makes your country a better place. Heck, some day the son of Hungarian immigrants could grow up to be President of France.
God Bless Europe. You Europeans can now rest in peace.