By Andrew Geddes.
Immigration is not a magic solution to an ageing population, argues.
The argument in support of newcomers is beguilingly appealing. The effects of an ageing population on the labour market and welfare state require immigration because immigrants can fill labour market gaps and sustain pensions and health care. The UK population of state pensionable age is projected to increase from 10.8 million in 2000 to 11.9 million in 2011 and to peak at around 16 million in 2040.
But this replacement migration argument has a flaw: immigrants require replacements given that they settle down, have children and get old too. More and more immigration is then needed. Maintaining the support ratio that matches the working age population to the elderly population would require net migration into the UK of around 1 million people a year and increase the population to around 120 million by 2050. This is a ridiculous proposition for obvious social, political and economic reasons.
Bringing the debate to a more practical level, if the UK were to maintain a constant working age population and a constant total population then UN estimates suggest that this would require 48,000 and 114,000 new immigrants each year, respectively.
Net migration into the UK currently outstrips this latter figure and is projected by the National Statistical Office to be around 160,000 a year until 2007. An explanation for this is the significant pull effect generated by labour market shortages that tend to be specific rather than general. The construction sector Three sectors illustrates this point. Increased government expenditure on public services coupled with changes in the housing market have generated a construction boom that is particularly focused on the south east of England, but sends ripples to the Midlands and the North. From high skilled to low skilled occupations, there is an increased construction industry reliance on foreign workers (employed both legally and illegally). Labour shortages in the construction sector are exacerbated by a dearth of young people entering the industry. Attempts to improve the construction industrys image and attract more youngsters are longer-term ventures. According to one senior construction industry figure, its not unusual to go onto a site in London and find that 70-80 per cent of the workforce can speak little or no English.
There are also labour demands that cannot be met from the domestic workforce in key public sector jobs such as teaching and health care. Labour needs are closely linked to government spending and political priorities, but attempts to solve one problem can beget others. Where shortages of teachers, doctors and nurses have arisen it is often because of the unavailability of affordable housing. Much of the demand for immigrant workers is in London and the South East where the regional economy is at risk of over-heating. While there is likely to be a continued need for immigration in certain key sectors, it is not a magic bullet that will resolve labour market and welfare state problems.
Other remedies such as improved labour market participation, increased productivity and greater mobility within the EU will also be important. The EU has resolved to tackle insufficient occupational mobility as part of the new European economy agenda sort-of agreed in principle at the 2000 Lisbon summit. In 2000 only 16.4 per cent of workers in the EU had been in their job for less than one year, compared with 30 per cent in the USA. Only 1.2 per cent of the EU population changed region to live during 1999, compared with 5.9 per cent of people in the USA who moved between states.
As well as structural reform, European Governments must tackle widespread misconceptions amongst their electorate about immigration. A conspicuous feature of public opinion in Britain is that most think there is more of it than there actually is. A MORI opinion poll published in the autumn of 2000 under the heading Are We an Intolerant Nation? found that, on average, respondents thought that 20 per cent of the British population were immigrants. In reality, the figure is 4 per cent. Perhaps not surprisingly, 66 per cent of respondents also felt that there were too many immigrants.
In the early 1990s, fears that 25 million migrants would cross from Eastern Europe into the West led to restrictions on access from Soviet bloc countries. Similar fears provide the backdrop for the next EU enlargement to Central and Eastern Europe. The accession negotiations have been riddled with mistrust because of assumptions from existing states about the potential for large-scale migration from Central and Eastern Europe.
So how many people from accession countries will want to move? Recent research on the potential scale of post-enlargement migration put the figure at around 500,000 people metaphorically sitting on their suitcases with around another 5 million adjudged likely to move during the next 18 years (around 277,000 a year). According to OECD figures, immigrants from Central and Eastern European Countries have accounted for around 15 per cent of the EUs total migrants since 1989. This picture is superimposed on a complex mosaic of relatively short-term movement based on a highly intensive shuttling back and forth across international borders to make a living. As the OECD put it, central and eastern Europe is becoming a a theatre of much more complex movements than just a straightforward move to the west, although this remains the prevailing perception.
The UK population is expected to increase from 59.8 million in 2000 to around 65 million by 2025. Around two-thirds of this projected increase is attributed to immigration with the remainder from natural increase. But though this will be valuable in plugging skills gap, it is not a substitute for improving homegrown skill levels and labour market mobility.
Dr Andrew Geddes is Senior Research Associate at the Foreign Policy Centre and Reader in Politics at the University of Liverpool.