Good Economics for Hard Times

02It's a myth that immigrants lower wages in the countries they move to

Migration is a hot topic that often grabs the world's attention, especially in the richest countries. It's a subject that can stir up a lot of feelings and is often used as a political football. There's a common misunderstanding, often stoked by racial bias and political agendas, that immigrants coming into a country will push down wages for the local folks. But let's take a closer look at this. Every year, about 1.5 million people move around within the European Union, and another 2.5 million people come to the European Union from other parts of the world. When you think about the total population of the EU, these numbers are pretty small. Plus, most of these migrants are in the EU legally. While there was a spike in the number of refugees in the EU between 2015 and 2016, things settled down by 2018. In fact, only 38% of asylum requests were approved, which is about one approved request for every 2,500 EU residents. Now, let's get to the heart of the matter. Firstly, the differences in wages between countries don't really sway whether people choose to move. Secondly, there's no solid proof to back up the claim that a big wave of low-skilled workers will cut job opportunities for the local folks. This might seem a bit odd, but it shows the unique nature of the job market, which doesn't always fit neatly into the supply and demand story. It's important to remember that not all migration is driven by poverty. For example, countries like Iraq, Syria, Guatemala, and Yemen have higher incomes per person than Liberia and Mozambique. Mexico, despite its reputation as a source of migrants, actually has a strong welfare system and a good chunk of the population earns an upper-middle income. Even within the EU, tough economic times don't necessarily lead to a mass exodus. Greece, for instance, went through a serious economic crisis between 2010 and 2015, but this didn't cause a large-scale departure of its people. Interestingly, the percentage of international migration has stayed pretty steady between 1960 and 2017, at around 3%. This suggests that despite all the heated talk and political posturing, migration patterns have stayed pretty stable over time. In conclusion, the common misunderstanding that migration pushes down wages in host countries is challenged. The reality is far more complex and nuanced, and migration is influenced by a range of factors beyond just wage differences.

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