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15 February 2017

Shock employment figures have exposed the impact of open borders on British workers.

The latest snapshot of the UK labour market should raise concern across the political spectrum as a headline reduction in overall unemployment masks an asymmetric distribution of costs and benefits between native and immigrant workers.

Shocking new figures showed that the number of British people in employment tumbled by 120,000, but the decline was masked by a huge increase in immigrants entering the labour market – with 190,000 more EU migrants in work and a whopping 240,000 more non-EU migrants taking jobs in the UK.

The figures make a mockery of a recent survey by the Adecco Group suggesting that the UK was already experiencing a significant skills shortage due to a supposed fall in the number of EU citizens working in the UK.

Wage compression

The adverse effect of uncontrolled immigration has been known for a long time, and not only in terms of native labour displacement (and all of the costs that can emerge from that). The Bank of England itself admitted that open borders compress the pay of those on low wages in its own analysis of the effect of immigration on the labour market.

Their 2015 paper ‘The impact of immigration on occupational wages: evidence from Britain’, written by Oxford fellow Stephen Nickell and Bank of England economist Jumana Saleheen, revealed that “the biggest impact of immigration on wages is within the semi/unskilled services occupational group” where a 10 percent rise in the proportion of immigrants working in the sector can shrink wages by 1.88 percent.

Many attempt to justify the policy despite its effect on the wages of the unskilled by referring to other advantages that massive unskilled migration could bring – reducing costs for employers and driving up productivity.

A false upside

But the alleged advantages of a looser immigration policy are being exposed too, even once we ignore the severe consequences on native labourers. Recent research from Harvard economist George J. Borjas suggests that high migrant inflows can hurt the economy by sapping productivity and importing less functional cultural norms. He’s even backed Trump’s tough measures on illegal migration, shattering media narratives about hard working immigrants by exposing the truth about the costs of relaxed policies.

Even advocates of immigration like American sociologist Robert Putnam admit that “immigration and ethnic diversity challenge social solidarity and inhibit social capital” – less tangible qualities than crude measures like economic output, but increasingly recognised as being vital for sustainable economic activity. “Trust (even in one’s own race) is lower, altruism and community cooperation rarer, friends fewer” he writes.

The demand for control

But not everyone got the message. Chancellor Philip Hammond took to Twitter to praise the “encouraging labour market stats out today”, stressing the record high employment rate without digging below the figures to discover the perverse effects on British workers.

The latest figures highlight the need for swift action on immigration, especially following our historic vote to quit the failing European Union last June. Support for Brexit was broad and complex, but one over-riding theme was control of our destiny of our nation – not only control over our laws or financial contributions to supranational bodies, but control of our sovereign borders too.

Polling shows time and time again that the public demand action on out of control immigration. 76% – more than two thirds – want immigration reduced while only a meagre 4% want to see inflows extended.

Today’s figures should be a wake-up call and the government must listen to the will of the British people.