Immigration and the impact on the economy

Whenever we talk about aspects of economy and what aids or harms it, we must be incredibly cautious. The economy is a well-oiled, but complex system: this doesn’t just mean “complicated”, but a system so intricate that trying to locate any one cause from any one part would be a fool’s errand. Cause and effect make little sense in a complex system, where every part is itself its own system.

One interesting factor for many countries has been the impact of immigration. After all, people are coming into countries to work, start new lives and generally become new, contributing citizens to a new country.

Immigration fears and jobs

No one disputes that the job market is a metaphorical battleground: being the most qualified in your area of expertise is no guarantee of a job. Factors such as race and gender ratios, relationships with potential employers, and so on, are all important, too.

Many people convey that this is unfair, since such aspects – being friends with an employer, for example – are beyond the control of hard work. However, getting good grades and studying are not. Therefore, we should be afforded the right “reward” – a job – for that hard work.

Yet, unfortunately, the market has become what it is now.

With the market already so hard to break into, it’s no wonder we fear more people entering it in our countries. Thus we think it becomes harder to get a job because there are more potential employees than there are available jobs – and now that is even smaller with people immigrating.

Economist Walter Block illustrates the problem with the assertion that more immigrants means less jobs:

“This objection (that immigration will create or exacerbate unemployment) illustrates nothing so much as economic illiteracy. It assumes that there is only so much work in a nation to be done, and that if immigrants do more of it, there will be just that much left for present occupants. If it were true, any and every technological advance would prove a dire threat to our economy. For example, the pick and shovel, to say nothing of the truck, can do the work of thousands of people, compared to tea spoons, or, better yet, bare fingernails. Are we to rid ourselves of these technological advances in order to improve our economy and combat unemployment?”

Hans Economics argues societies themselves and their policies are to blame, not immigrants.

“Nations would do well to lay the blame at their own feet for high rates of unemployment among youth.  Minimum wage laws, mandated unemployment benefits, and the boom-bust cycle generated by inflationary policiesare to blame for unemployment, and not immigration.”

Further, an op-ed in the Wall Street Journal, of all places, argues that immigrants lead to more jobs since they create more (small) businesses. And more businesses means more employment opportunities.

What does this mean

In South Africa, the Centre for Development and Enterprise has conveyed caution in the country’s response to immigration and employment.

“We must not be frightened by competition but embrace it. South Africans are as good as anyone in the world given the opportunities to prove it. We need skilled immigrants to create more opportunities for everyone and especially those who are unemployed and unskilled now. Skills and experience that
have been acquired at a cost to governments elsewhere in the world are a most important form of foreign direct investment, even more valuable than its monetary equivalents.”

Thus there is plenty to support the claim that immigration can be and often is good a country. So there shouldn’t be a fear that we’ll lose jobs in Johannesburg, Cape Town or other major areas.. The economy and the impact of employment is a difficult focus for assessment, but when it can be done, it often shows this favourability. Too often, the fears are unfounded and not enough is being done to show the importance, as opposed to the alleged harm, that immigration can have.


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