Monday, 30 May 2016

Not So Scary

The Brexit camp were talking about immigration a lot last week, scaring people by talking about how we will be over run by immigrants etc. However, free movement of people inside Europe isn't such a scary thing:

I've been thinking about why in the long term EU immigration would self-limit numbers wise in practice, even if it is unrestricted free movement of people in theory. People in Europe will naturally go to the best place they can based on their own personal considerations. At the moment for example, Germany has a lot to offer economic migrants, so many head over to Germany.

However, eventually Germany will fill up with people to it's natural limit, jobs and housing will become scarcer, it won't be in people's economic self interest to move to Germany any longer, so future would be economic migrants will go to say France of Poland where they may be more affordable housing and job vacancies at that juncture. So even though in theory migration to a country could be unlimited numbers wise, in practice that won't happen as people will naturally go to the country that is in their best self interest to live in, numbers of migration will naturally self regulate.

Even though numbers will typically self limit, the EU would benefit from an emergency brake system introduced re immigration, that is agreed by and applicable to all EU countries, if any one EU member country did have unsustainably high immigration for a time because of exceptional circumstances, they could invoke the emergency brake rule to limit numbers to say 0.25% per year of a countries population, this would also put people's minds at rest re EU immigration. Going with the 0.25% figure would mean the UK would have invoked the emergency brake several times in recent years.

Going back to free movement without limits, think about the United States, which  has free movement for citizens to move to any other State, are the people who live in Texas terrified that everyone from Kansas will move to their State? Of course not as that's not how things naturally pan out.

Within the United Kingdom, any citizen can freely move to any component country or county, are the people of Wales scared witless that everyone from England will move to their country? Definitely not as in reality that will never happen because of the self interested actions that humans will make.

Furthermore, another point that has dawned on me is that not having free movement of people in Europe could actually be a bad thing for us, sounds hard to believe doesn't it. But it goes like this: even if we leave the EU next month, we will eventually negotiate an EU wide free trade agreement with other EU countries. Even post Brexit, the UK has to be competitive economically in this EU trading bloc which we are a part of.  The majority of UK trade is done within the EU and EU trade makes up 20% of world GDP, a real lot in other words.

If we impose limits on EU immigrants to our country, this will cause the UK labour price to be artificial as the labour price is not acting freely in the EU labour market to determine it's natural level, our UK labour price could be high versus the rest of the EU. In this scenario, our UK labour price won't be competitive on the EU market we are in (even if we Brexit) - with higher labour costs our product or service we are producing could end up being priced too high. As people understandably buy the good or service at the cheapest price point, they won't choose to buy from us if we are high price wise, the UK will lose money with limits on immigration.

We need to build the houses and infrastructure to keep up with the new people of course, but 94% of England and Wales is currently fields or gardens, we can take some new people, and quite naturally the number of immigrants will self limit, so there's no reason to panic.

James Bickle