The Cost of Immigration

May 07, 2009 11:17 AM

Illegal immigration is a controversial issue for all developed countries.  Political parties and campaign groups have argued all sides of the debate: potential tax revenues versus the cost to taxpayers; whether it will harm or help local economies; the political benefits of stricter immigration policy versus a more liberal approach.  In the United States an estimated 11.9 million people are "unauthorised immigrants" – with almost a third of these entering since March 2008 alone – making up approximately 5.4 per cent of the US work force according to the Pew Hispanic Center.  In the UK there are between 524,000 and 947,000 illegal immigrants – according to a study commissioned by Boris Johnson from the London School of Economics – almost two-thirds of which are estimated to live in or near London.


On Monday, thousands rallied in London for a campaign called "Strangers to Citizens", in support of scheme that would grant amnesty to long-term illegal immigrants. The rally called for permanent residency for the 450,000 illegal immigrants they classified as ‘long term’ (been present in the UK for roughly 4 years). Bringing these people into the legal workforce, they argue, would generate more than £1 billion in tax revenues, citing a recent study by the Institute for Public Policy Research (IPPR).  London Mayor Boris Johnson echoed the calls, adding that bringing thousands of people out of destitution and jobs far below their qualification is "morally right".  The hope is that allowing these workers the opportunity to work legally will stave off higher levels of illegal immigration and have economic benefits for Britain as a whole.


However, there are several holes in this argument. For one, Spain enacted a similar amnesty program for long-term illegals in 1985, and again in 2005.  Over 44,000 previously undocumented immigrants were given settlement rights in the initial program; twenty years later, the number soared to over 700,000. Although other factors play into the boom in illegal migration to Spain, the intended decline in the rate of illegal immigration simply did not happen; there is little reason to believe it would here either.


Secondly, does an amnesty really pay off for the taxpayer?  The IPPR argues that it would.  According to their research it would cost approximately £4.7 billion to deport the 500,000-plus illegal migrants in the UK.  Perhaps, but the costs associated with illegal immigration are far more complicated than the IPPR literature suggests.  The Home Office doesn’t even provide an "average cost of deportation," which one might think to be an easy figure to work out, due to the multitude of factors that weigh into each individual case.  The National Audit Office and UK Border Agency provide average cost ranges for returning failed asylum-seekers, factoring in the marital status, number of dependents, and the destination country among others, in a paper titled "Management of Asylum Applications by the UK Border Agency", but these again just make clear how difficult it is to present firm figures (such as the IPPR does).


Perhaps more importantly, the cost of allowing illegal immigrants could vastly outway the costs of deportation.  Migrationwatch estimates that, based on the average 25 year old immigrant – married with two children, working for minimum wage – that a two-child, two parent family would receive about £291,000 in total Housing Benefit and £19,000 in Council Tax Benefit over their lifetime if given legal status. In areas such as London, where there is a high concentration of immigrants, the cost of living is higher, and so the bill creeps over £1 million.  Unemployment rates among immigrant groups tend to be higher than the UK averages too, and the risk of living entirely on taxpayer-funded benefits is much greater among immigrant populations.  In the long run, the cost to the taxpayer could be far higher if the 450,000 long-term illegal immigrants are granted amnesty.


Again, we cannot draw conclusions from the simplified figures in the Migrationwatch estimate, just as with the IPPR’s. It is unlikely that every illegal worker would remain in low-skilled labour, and their earning capacity could increase significantly, decreasing the cost on the UK pocketbook over the course of their life.  If these people are given the suggested two-year "trial-period" outlined by Boris Johnson, they would have the opportunity to show their earning potential and their ability and willingness to contribute to the UK economy and society.  There is something to be said for the fact that by staying here for so long already, in such a high risk situation with low pay, many illegal immigrants clearly do want to be here and do want to work.  All that aside though, the potential burden on welfare, the NHS, schools, etc, means that the true cost of an amnesty – even if not as high as Migrationwatch’s – is likely to be much higher than the IPPR’s £4.7 billion deportation cost.


Leaving costs aside though, is an amnesty program "morally right?"  Those in the Monday rally believe so in the case of long-term immigrants. But is amnesty fair when thousands of skilled workers across the globe are enduring a drawn out and complicated process to qualify for official migrant status to the UK?  Such people have a much higher earning potential on average, and they are more likely to contribute to the UK system and society.  Are those who spend two years exhausting all the legal channels for immigration less deserving than those that broke the law and violated immigration standards?  The UK has recently tightened its immigration policy, ending specific immigration schemes and making the qualifications for entry more stringent.  In a twenty first century global economy when a recession means that more British people are willing to do lower paid, low skilled jobs, does it make good sense to grant amnesty to illegal migrants while simultaneously restricting labor mobility in the skilled labour market?


The immigration issue is far more complicated than numbers can convey.  The announcement by a team of Oxford University researchers to carry out an unprecedented 5 year programme of study into the issue, including into the costs, is welcome. But until they publish any results, we must ask whether the UK, by granting amnesty to illegal immigrants, would simply be setting itself up for a situation like Spain, as immigrants are drawn to the country in the hope of work in a recovering economy and potential future amnesty? And are the costs of deporting migrants really greater than the benefits of letting them stay?  The numbers are still unclear, but the potential for greater cost is alarming.  Clearly there are benefits to be allowing these migrants to stay, but measuring the benefits versus the costs is far less clean cut than any of these groups are willing to admit.

Illegal immigration is a controversial issue for all developed countries.  Political parties and campaign groups have argued all sides of the debate: potential tax revenues versus the cost to taxpayers; whether it will harm or help local economies; the political benefits of stricter immigration policy versus a more liberal approach.  In the United States an estimated 11.9 million people are "unauthorised immigrants" – with almost a third of these entering since March 2008 alone – making up approximately 5.4 per cent of the US work force according to the Pew Hispanic Center.  In the UK there are between 524,000 and 947,000 illegal immigrants – according to a study commissioned by Boris Johnson from the London School of Economics – almost two-thirds of which are estimated to live in or near London.


On Monday, thousands rallied in London for a campaign called "Strangers to Citizens", in support of scheme that would grant amnesty to long-term illegal immigrants. The rally called for permanent residency for the 450,000 illegal immigrants they classified as ‘long term’ (been present in the UK for roughly 4 years). Bringing these people into the legal workforce, they argue, would generate more than £1 billion in tax revenues, citing a recent study by the Institute for Public Policy Research (IPPR).  London Mayor Boris Johnson echoed the calls, adding that bringing thousands of people out of destitution and jobs far below their qualification is "morally right".  The hope is that allowing these workers the opportunity to work legally will stave off higher levels of illegal immigration and have economic benefits for Britain as a whole.


However, there are several holes in this argument. For one, Spain enacted a similar amnesty program for long-term illegals in 1985, and again in 2005.  Over 44,000 previously undocumented immigrants were given settlement rights in the initial program; twenty years later, the number soared to over 700,000. Although other factors play into the boom in illegal migration to Spain, the intended decline in the rate of illegal immigration simply did not happen; there is little reason to believe it would here either.


Secondly, does an amnesty really pay off for the taxpayer?  The IPPR argues that it would.  According to their research it would cost approximately £4.7 billion to deport the 500,000-plus illegal migrants in the UK.  Perhaps, but the costs associated with illegal immigration are far more complicated than the IPPR literature suggests.  The Home Office doesn’t even provide an "average cost of deportation," which one might think to be an easy figure to work out, due to the multitude of factors that weigh into each individual case.  The National Audit Office and UK Border Agency provide average cost ranges for returning failed asylum-seekers, factoring in the marital status, number of dependents, and the destination country among others, in a paper titled "Management of Asylum Applications by the UK Border Agency", but these again just make clear how difficult it is to present firm figures (such as the IPPR does).


Perhaps more importantly, the cost of allowing illegal immigrants could vastly outway the costs of deportation.  Migrationwatch estimates that, based on the average 25 year old immigrant – married with two children, working for minimum wage – that a two-child, two parent family would receive about £291,000 in total Housing Benefit and £19,000 in Council Tax Benefit over their lifetime if given legal status. In areas such as London, where there is a high concentration of immigrants, the cost of living is higher, and so the bill creeps over £1 million.  Unemployment rates among immigrant groups tend to be higher than the UK averages too, and the risk of living entirely on taxpayer-funded benefits is much greater among immigrant populations.  In the long run, the cost to the taxpayer could be far higher if the 450,000 long-term illegal immigrants are granted amnesty.


Again, we cannot draw conclusions from the simplified figures in the Migrationwatch estimate, just as with the IPPR’s. It is unlikely that every illegal worker would remain in low-skilled labour, and their earning capacity could increase significantly, decreasing the cost on the UK pocketbook over the course of their life.  If these people are given the suggested two-year "trial-period" outlined by Boris Johnson, they would have the opportunity to show their earning potential and their ability and willingness to contribute to the UK economy and society.  There is something to be said for the fact that by staying here for so long already, in such a high risk situation with low pay, many illegal immigrants clearly do want to be here and do want to work.  All that aside though, the potential burden on welfare, the NHS, schools, etc, means that the true cost of an amnesty – even if not as high as Migrationwatch’s – is likely to be much higher than the IPPR’s £4.7 billion deportation cost.


Leaving costs aside though, is an amnesty program "morally right?"  Those in the Monday rally believe so in the case of long-term immigrants. But is amnesty fair when thousands of skilled workers across the globe are enduring a drawn out and complicated process to qualify for official migrant status to the UK?  Such people have a much higher earning potential on average, and they are more likely to contribute to the UK system and society.  Are those who spend two years exhausting all the legal channels for immigration less deserving than those that broke the law and violated immigration standards?  The UK has recently tightened its immigration policy, ending specific immigration schemes and making the qualifications for entry more stringent.  In a twenty first century global economy when a recession means that more British people are willing to do lower paid, low skilled jobs, does it make good sense to grant amnesty to illegal migrants while simultaneously restricting labor mobility in the skilled labour market?


The immigration issue is far more complicated than numbers can convey.  The announcement by a team of Oxford University researchers to carry out an unprecedented 5 year programme of study into the issue, including into the costs, is welcome. But until they publish any results, we must ask whether the UK, by granting amnesty to illegal immigrants, would simply be setting itself up for a situation like Spain, as immigrants are drawn to the country in the hope of work in a recovering economy and potential future amnesty? And are the costs of deporting migrants really greater than the benefits of letting them stay?  The numbers are still unclear, but the potential for greater cost is alarming.  Clearly there are benefits to be allowing these migrants to stay, but measuring the benefits versus the costs is far less clean cut than any of these groups are willing to admit.

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