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Why not just have a guest worker program for low skill workers and citizenship only for elite workers? This will also placate the middle classes.

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Obviously for pro Natalists a big part of it is actually just trying to continue the culture. But I think an inherent contradiction here is you don’t get millions of migrants by being selective and withholding govt benefits. That population of educated, English speaking and pro western values foreigners just isn’t infinite.

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I like the essay overall, and I like the linked essay on the ukfoundations.co website. However I disagree with your three numbered points.

Low wage labour is an alternative to capital investment, a disincentive to it, and therefore keeps productivity low.

The "wage equals marginal productivity" identity in EC 101 goes both ways - this does not seem to be widely appreciated. People take it to mean only that the wage is set equal to marginal production. But it goes the other way too. Pay low wages, you will have low marginal productivity (and low investment). And therefore low average productivity.

You do not want to import low wage workers. Yes, employers in the industries that employ them will kick up a stink, because everyone hates change, and they stand to lose. But everyone else stands to gain.

If low wage workers are not available to provide services which (currently) depend on low cost labour, then the market will simply purchase less of those services, spending money on alternatives that are produced with higher productivity. And entrepreneurs will have incentives to figure out better ways of providing those services.

So it is not the case that "British people ... would sort into the jobs that immigrants are doing. Thereby becoming less productive themselves."

The structure of demand would change. Beware of the static world fallacy, using microeconomic ideas to analyse the economy as a whole. /Ceteris paribus/ does not hold, because you are looking at everything.

I am sceptical that Labour wants to raise productivity. One of the major policy announcements was to double the number of planning officers. This will make it more difficult to get planning permits, not less. What Labour needed was a first-principles overhaul of legislation and regulations around real estate and development. It had fourteen years to come up with new legislation, and yet ... nothing.

A second action of Labour's was to *reduce* available electricity supply. The UK Foundation essay does not say so in as many words, but there is around an r = 0.83 correlation between energy consumption and GDP per capita. If Labour really wanted to increase productivity, it would not be hamstringing the country with petty rules, but just building power staions and grid, as fast as technically possible. Winter Energy Payments for pensioners would be a complete non-issue, unnecessary, instead of the major source of resentment that it they are

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I agree that in theory low wage immigration harms the amount people are investing in productivity-enhancing technology BUT I don't think you can explain the UK's lack of investment in this technology can be attributed to this -- our rate of robots per head and similar measures are so SO much lower than peer countries with similar wages and levels of immigration. I think we have to look at our tax system for that.

And while investment in technology has positive externalities, if the same job is being done by a human being, it may look worse in the productivity stats but it still makes the average British worker more productive which should be what we care about. (I'd argue that most immigrants have positive externalities as well)

I don't think it's clear that what would replace low productivity services would be higher productivity outputs. Or at least, not in the ways that matter. People would be, definitionally, paying more or getting something they want less. We care about the economy because we care about people getting what they want.

Labour notionally want to, and I think they're talking a good game on planning. They seem to be the first government who gets it. I'm willing to give them a chance (although I share your concerns about energy)

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You'll have to take me through your second paragraph more slowly.

Naively, if you have 100 people producing 100 units, and add 10 people who allow the original 100 to produce 102 while producing 3 units themselves, then average productivity has declined. (Definitionally low income migrants are lower than average productivity, and a proportion will not contribute at all.)

The now-falsified assumption underlying migration mania is that people are interchangeable cogs in the economy. People who do not want to integrate are not the same as people brought up in the culture.

Also I note that wages are already heavily taxed, but that's not disincentivising businesses from employing more. The total cost of labour and the availability of credit for capital investment are what matter, not parts of the price.

I guess I am a Schumpeterian - there are always multiple ways of doing any given thing, and price signals are how entrepreneurs sense opportunity. Prices may rise initially, but then they go down as supply chains adapt and learning by doing takes place. Removing roadblocks and bottlenecks in entrepreneurs' paths would be something the government could do.

First things first, though. Expand the supply of energy and make it cheap. Expand and streamline communications (ports, rail, roads, airports). Make streets safe.

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Yes it lowers average productivity but boosts the productivity of British workers. So, the immigrants haver overall boosted the productivity of British workers. That's exactly what I mean.

Unless we're giving them lots of welfare that eats up the surplus produced by the British workers, I don't see how this is a negative trade.

I'm not arguing they are, but I don't think you should disguise a culture-based motivation as an economic one.

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> Unless we're giving them lots of welfare that eats up the surplus produced by the British workers, I don't see how this is a negative trade.

I can see two ways of this happening:

1) Much welfare is eliminated across the board because we can't even afford it today (and much less if we're going to include millions of low-wage workers in the welfare state).

2) Low-wage workers are accepted with very limited welfare rights, Gulf state-style.

Whereas with anything like the current arrangements where most of the welfare state is for the most part available to all immigrants, regardless of productivity, it makes little sense to distinguish between low-productivity immigrants and "British workers"; in the context of the country going bankrupt, those groups need to be lumped together.

Would that be a fair explanation of your argument?

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Yes, if we don't cut welfare or have a guest worker system the current system is untenable. (But the current system would also be untenable with just natives anyway)

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I'm not sure the comparison demonstrates that the tax system alone is responsible for subdued productivity growth given, whilst British productivity growth has been particularly low, wage growth has been low across many developed countries lately.

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I really like this article and I do agree that we will need more immigration. However, we also agree that there is need to be careful on the productive impacts of immigrants. I agree that workers in general contribute far more value than their renumeration. But I do think that immigration done loosely can have long run adverse effects on wages via their effect on the bargaining power of labour that would not be detected in studies that examine short to medium run effects and would not apply to raising fertility (as native workers have more domestic support and therefore a higher reservation utility). But I also think a lot of this detriment could be offset by focusing on immigration for those who already have work in the country lined up (i.e., less student friendly) or have decent amounts of capital - so that they aren't reducing the average reservation utility of the supply of labour. (Wrote a short sub on this: https://ryanhalpin.substack.com/p/immigration-and-real-wages)

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But this sort of mass immigration is just a ponzi scheme. The immigrants will themselves get old, they will probably have a similarly low number of children, and of late they're dominated by the low skillled anyway. Nobody needs cars to be cleaned by hand when 30 years ago they were done automatically. The hand washes are less efficient, pollute the environment as the detergents go straight down the drain, and the workers put pressure on rents. Pret could employ half the number of people with more self service tills.

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I know of no evidence that importing people from countries with higher average fertility spreads the habit of family formation to the natives via social contagion. Rather, social contagion seems to work the opposite way round, as the immigrants quickly adjust their fertility down to the national average.

In rich countries, highest high population density tends to correlate with lowest low fertility; so, for instance, Hong Kong, Macau and Singapore have both the highest high population density and the lowest low fertility. If you allow large scale immigration, and it mostly winds up in your most densely populated cities - as it usually does - it’s probably going to drive your native fertility down even further. And within a generation, the immigrants will default down close to the new, lower native fertility levels.

The reasons for this are pretty obvious. In a crowded First World city, the supply of houses large enough to raise three middle class kids in relative space and comfort in a “good” area is going to get ever more limited, and what there is will become ever more expensive. Competition for other resources, such as places at the best schools, will also become more intense. So the net effect of the immigration is to further deter family formation among the native population; and, after a brief fertility premium, eventually depress immigrant fertility down towards that now lower native average.

At the moment, the most fertile country in the world is Niger (TFR of 6.87 children per mother), and the least fertile is Hong Kong (TFR of 0.87 children per mother). Imagine if the government of China invites families from Niger to come and live in Hong Kong, in the hope that enthusiasm for large families will spread by social contagion from the Nigeriens to the Hong Kong Chinese. The experiment will fail. Why? Because it will do nothing to address the underlying disincentives to family formation, and will, if anything, exacerbate them.

If you want your native population to have more babies, you have to radically change the incentives. As far as I know, the only country that’s done this is Israel, and it seems to have worked (Yes, Israel’s ultra orthodox have lots of children, but secular Israeli women also have above replacement fertility). One factor is, most Israelis consider their country a cause they feel really passionate about; there’s an element of “patriotic” fertility there. But giving your country an airport lounge demographic will probably kill off any possibility of that.

Maybe that’s why our fertility rate has seen such an extreme drop-off during the very period of its most extreme rise in immigration.

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Another solution: Stop giving money to old people. Stop the ponzi scheme

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