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Posted by on Jul 27, 2013 | 0 comments |

Two leading UK economists engage in debate about economic consequences of immigration

A new debate about immigration started between the two of leading economists in UK. They are Jeremy Warner, who writes for the right-wing Daily Telegraph and Jonathan Portes, the director of the National Institute of Economic and Social Research who writes frequently for the left of centre Guardian. On 2 September warned published and article in Telegraph named “Mass immigration has made Britain a less competitive economy” where he argued that increased labour supply from abroad is driving local wages down. According to him this leads to decrease in efficiency, because employers who rely on cheap labor do not invest in improving the efficacy and effectiveness of their business, which is the reason why the productivity in UK has not increase since 2006. His suggestion is that reduction of the low skilled immigration will encourage growth in productivity.

Jonathan Portes criticized Mr Warner’s thesis on the National Institute of Economic and Social Research website. He said that the ‘normally sensible’ Warner had written a ‘remarkably evidence free article in the Telegraph’. According to him the views of Warner are not substantiated with any evidence. Productivity in Britain has been stagnant since 2005. He agreed that the productivity in Britain has been bad since the crisis of 2008, but said that the reasons for this are complex and much debate is needed in order to identify what they might be. The view of Portes is that immigration not only does not lead to reduction in labor productivity but actually might increase it as the highly-skilled immigrants teach their skill to the local workforce.

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