You may wonder what the latest population data might have to do with the wave of public strikes over pensions yesterday. The answer is: demographics.
Not the least economic benefit of immigration is the way it rejuvenates a nation's population, as the young are usually the most mobile, enterprising, flexible, able to work and determined to make a new life in another country. They are also, by dint of their age, likely to have children, and may tend to have larger families than the established population.
While it is true that these children can put some strain on local schools and add to the benefits bill, in the long run, like all children, the overwhelming likelihood is that they will in due course go to work, pay taxes and – crucially – help pay for the pensions of the rest of us. It is from their tax and NI contributions that the state pension, care and NHS bills and public sector pensions will be funded. Demographics are fundamental to public finances and economic growth. It is no accident that Greece and other southern European nations struggling with sclerotic economies and unsupportable debt burdens have lousy demographics.
In improving the "dependency ratio", then, immigrants automatically provide an enormous economic boon. This is not limited to the rich and highly skilled who the Coalition favour; there are many arguments in favour of allowing many more casual labourers, mini-cab drivers and plumbers, say, into the country, as it reduces the cost of these services. It is too easily forgotten that London's thriving tourist trade would collapse if all the illegal cleaners, hotel staff and taxi drivers were sent home.
There are economic downsides to immigration, and it is as well to face up to them. They tend to reduce wages among those who are already poorly paid and the cultural, political and racial tensions sometimes provoked need little elaboration. On balance, though, immigration is a great economic good. And if we are loading future generations with debts, then the bigger that generation is, the easier it will be for them to deal with the burden.Reuse content