Tuesday, April 18, 2017

Explaining Britain’s immigration paradox

Migration is good for the economy. So why are the places with the biggest influxes doing so badly?


“The Golden Cross Welcomes you to Redditch!” The greeting, on the wall of a pub outside the town’s railway station, is valiant. But the dingy wire fence and mossy concrete beneath it let down the enthusiasm of the sign’s welcome. Redditch is struggling. In recent years, wages have fallen. It has also seen a rapid rise in the number of migrants, in particular those from eastern Europe. Perhaps linking these two phenomena, the people of Redditch voted 62:38 to leave the European Union in the referendum last June.

Immigration is a boon for Britain. The 9m-odd foreign-born people living there bring with them skills and attitudes that make the country more productive. Younger and better educated than natives, immigrants pay more in tax than they use in the way of public services. For some institutions they are indispensable: perhaps 30% of doctors in Britain are non-British.

Even so, Britain is unenthusiastic about immigration. Surveys find that roughly half of people would like it reduced “a lot” and fewer than 5% want it to go up. Many politicians interpret the vote for Brexit as a plea to reduce the number of new arrivals. Although the government has recently hinted that net migration may not fall by much after Britain leaves the EU, a group called Leave Means Leave, backed by two-dozen MPs, is calling for it to be slashed to a sixth of its current level.

To understand this antipathy to immigration, we examined the ten local authorities that saw the largest proportional increase in foreign-born folk in the ten years from 2005 to 2015 (we excluded Northern Ireland, because of differences in its data). Whereas big cities such as London have the greatest share of immigrants among their populations, the places that have experienced the sharpest rises are mostly smaller towns, which until recently had seen little immigration.

Top of the list is Boston, in Lincolnshire, where in 2005-15 the number of foreign-born residents rose from about 1,000 to 16,000. In 2005 immigrants were about one in 50 of the local population. They are now one in four. All ten areas we looked at saw at least a doubling in the share of the population that was born outside Britain.

These ten areas—call them Migrantland—voted about 60:40 in favour of leaving the EU, compared with 52:48 across Britain. Boston went for Brexit by 76:24, the highest margin of any local authority. And whereas it has often been noted that there was no link between the size of a place’s migrant population and local enthusiasm for Brexit (consider London, both cosmopolitan and heavily for Remain), we found some link between the increase in the number of migrants and the likelihood to vote Leave (see chart). London boroughs such as Hackney and Newham have welcomed large numbers of foreigners for centuries. People in those places have got used to newcomers, suggests Tony Travers of the London School of Economics. “But when your local population of migrants goes from 10% to 15% in a decade, that’s where you get the bite.”

Jacqui Smith, a former MP for Redditch and Labour home secretary in 2007-09, sees his point. “I know there’s racism in London, but people have largely become used to diverse communities...The transitional impact in Redditch is much greater,” she says. Redditch has in recent years acquired a couple of Polish supermarkets. Those who are well-off, mobile and confident find those sorts of developments interesting—“You think, ‘I’ll be able to get some Polish sausage’,” says Ms Smith. But those who lack housing or work worry about what such changes represent. The staff at an employment agency in Redditch attest to such fears. Most of the workers they place in jobs are from eastern Europe. “They’re brilliant, we love them,” smiles one member of staff. But when locals come looking for work and see how many foreign names are on the agency’s register, there is some resentment, she says.

The wrong place at the wrong time

It is tempting to conclude that such attitudes are motivated by prejudice. Yet a closer look at the economy and public services in Migrantland makes clear that its residents have plenty to be angry about—even if the migrants are not the culprits.

Places where living is cheap and jobs plentiful are attractive to newcomers. In 2005 the average house in Migrantland cost around £140,000 (then $255,000), compared with more than £150,000 across Britain. Unemployment was lower than average. Low-skill jobs blossomed. Migrantland seems to be more dependent on agriculture than the rest of the country. The big change in Boston, says Paul Gleeson, a local Labour councillor, is that previously-seasonal work, such as fruit- and veg-picking, has become permanent as technology and new crop varieties have lengthened the agricultural season. This means the people doing that work now live there permanently, too. Manufacturing centres are nearby: food processing, for instance, is a big employer in Boston and Mansfield.

Given the nature of the jobs on offer, it is unsurprising that the new arrivals are often young and not particularly well educated or Anglophone. We estimate that whereas over 40% of the Poles living in London have a higher-education qualification, only about a quarter do in the East Midlands, where three of our ten areas are. One in 20 people in Boston cannot speak English well or at all, according to the 2011 census. Small wonder that integration is hard. Many landlords do not allow tenants to drink or smoke inside, so people sit out on benches, having a drink and a cigarette. “Because they’re young, not because they’re foreign, they might not put their tins in the bin,” says Mr Gleeson.

What’s more, the places that have seen the greatest surges in migration have become poorer. In 2005-15 real wages in Migrantland fell by a tenth, much faster than the decline in the rest of Britain. On an “index of multiple deprivation”, a government measure that takes into account factors such as income, health and education, the area appears to have become relatively poorer over the past decade.

Are the newcomers to blame? Immigration may have heightened competition for some jobs, pushing pay down. But the effect is small. A House of Lords report in 2008 suggested that every 1% increase in the ratio of immigrants to natives in the working-age population leads to a 0.5% fall in wages for the lowest 10% of earners (and a similar rise for the top 10%). Since Migrantland relies on low-paid work, it probably suffered more than most.

But more powerful factors are at play. Because the area is disproportionately dependent on manufacturing, it has suffered from the industry’s decline. And since 2010 Conservative-led governments have slashed the number of civil servants, in a bid to right the public finances. The axe has fallen hard on the administrative jobs that are prevalent in unglamorous parts of the country. Migrantland’s public-sector jobs have disappeared 50% faster than those in Britain as a whole. In the Forest of Dean they have dropped by over a third. Meanwhile, cuts to working-age benefits have sucked away spending power.

Even before austerity, it had long been the case that poor places had the most threadbare public services. Medical staff, for instance, prefer to live in prosperous areas. Our analysis suggests that Migrantland is relatively deprived of general practitioners. Doctors for the East Midlands are trained in Nottingham and Leicester, but fewer people want to study there than in London, for instance. After training there, half go elsewhere. In 2014 there were 12 places for trainee doctors in Boston; only four were filled.

Follow the money

What can be done? In places where public spending has not yet caught up with a rapidly enlarged population, the government could target extra funding in the short term. The previous Labour government ran a “migration impacts fund”, introduced by Ms Smith. She acknowledges that the amounts involved were small (the budget was just £35m per year) but argues that the point was to reassure people that the government understood fears that immigration can make things tough for a time. The current government has launched a similar initiative, though it is no better funded.

And although Britons dislike immigration, they do not feel the same resentment towards immigrants themselves. Once they have been placed in jobs alongside each other, locals and migrants tend to rub along, says the Redditch recruitment agency. A music festival was recently held in the town to raise money for children’s hospital wards in Poland. Local Poles took part in the Holocaust commemoration this year, says Bill Hartnett, leader of the council.

All that may be encouraging, but it does not provide a way to improve conditions in the left-behind places to which migrants have rushed. To many people, Brexit may appear to be just such a policy. They have been told a story that leaving the EU will make things better in their area, says Mr Gleeson. “It won’t.”


The Economist

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