The impacts of involuntary migration on refugees and their host countries

In 2015 the UK received 38,878 asylum applications, with an estimated 126,000 refugees already living in the UK. The recent migrant crisis mostly caused by violence in Syria has brought the issue of immigration to the forefront of political discussion, with the rise of UKIP suggesting many citizens of the UK fear too much immigration putting strain on services and potentially pressure on jobs in a country where unemployment is currently 1.67 million. There is no doubt that immigration provides both positives and negatives and these will vary between countries with different needs and different current rates of immigration. Whilst economic factors have traditionally been more important the cultural aspect of immigration is now also a significant issue, with events such as the New Year’s Eve sexual assaults in Cologne prompting debate over whether cultural values of many refugees fit in with the western world’s.

Refugees, clearly, would on the whole benefit from being able to successfully claim asylum away from sites of conflict. According to the United Nations and Arab League Envoy to Syria the death toll of the Syrian Civil War, as of April 2016, was 400,000. With a significant proportion of these deaths being civilians Syria does not represent a safe environment and refugees may benefit by saving their life in moving to another country. Once in the UK or any other country in Europe, in work wages are a lot higher and refugees have the opportunity to earn a living to support their families in a safe environment. Welfare support in the form of benefits is provided in the UK unlike in many countries refugees arrive from, although these benefits are often considered to be too small and result in a significant proportion of refugees living in poverty. Research by The Children’s Society showed that low benefits for refugees have left around 10,000 children in poverty for long periods of time. Under section 95 support, a single parent with a 16-year-old child could expect to receive £83.74 per week. This is just 57% of standard income support rates and is just a third of the amount required to pull them out of poverty. However, research by the Refugee Council showed that around three quarters of respondents to a survey stated they had no knowledge of the welfare benefits and support systems available in the UK before they moved to this country. This research was done with a sample size of just 43 refugees and asylum seekers, so the evidence is unlikely to be conclusive.

There are other small scale factors that can be highlighted to argue whether or not refugees benefit from moving to seek asylum in Europe. Whilst they are safe from conflict in Syria it is not unheard of for refugees to suffer racism and violence in their new country. For example on January 10th in Cologne, just days after the Cologne sexual assaults committed by refugees, eleven people with the appearance of refugees were beaten and hospitalised as a result. They had committed no crime and indeed six of the victims were Pakistanis despite the fact the original assaults had been blamed on men of Arab and North African appearance. Later that month a hand grenade was thrown at a refugee shelter. These incidents are shocking but compared to the violence in Syria are largely insignificant – refugees will be less likely to suffer attempts on their lives in Germany than Syria. Clearly the vast majority of refugees move out of necessity; their lives would be at risk if they did not move. There remains a popular opinion that many refugees exploit their situation to move to the UK as economic migrants through claiming asylum, fuelled by isolated incidents. This cannot account for the majority of refugees however, meaning that generally speaking allowing more immigration of refugees would benefit more refugees by protecting more lives. The ins and outs of other issues such as finances and discrimination, whilst they should not be ignored, are ultimately insignificant compared to the issue of life or death refugees face.

The issue of whether increasing immigration from refugees benefits the host country is much more open to debate. Economic analysis would suggest that increasing immigration would push down wage rates and be at a disadvantage to citizens of the UK, especially unskilled workers. This is because supply of workers increases, shifting the supply curve to the right and meaning that at equilibrium, the price level is now lower. Businesses benefit from cheaper labour as a result meaning business profits are likely to go up, but (assuming the majority of refugees are going into unskilled work) British citizens in unskilled labour gain less bargaining power over wages. Simply put, if they demand a higher wage from their employer, that employer may instead recruit a refugee on a lower wage performing the same job. This effect in practice has been found to be relatively small with research by Stephen Nickell of Oxford University and Jumana Saleheen of the Bank of England finding that a 10% rise of migrants working in unskilled jobs caused wages in this sector to fall by just 2%. The minimum wage in the UK will of course prevent wages falling below a certain threshold. In the long term there are a number of potential economic effects this immigration could have. Unemployment is liable to rise with the number of jobs available unlikely to change significantly but pool of potential workers increasing. On the other hand it is possible to argue that the prospect of cheaper labour for businesses may encourage more investment – a component of aggregate demand. A rightward shift in aggregate demand will result in an improved GDP and economic growth for the UK, but unless long run aggregate supply also shifts rightward as a result there will be a level of inflation. Consumption is also likely to increase through encouraging immigration as there are more refugees to spend money in the country, although this effect is likely to be highly minimal as most refugees bring with them very few possessions.

One of the main benefits of immigration to the UK would be helping to offset the ageing population concerns. The OECD ageing population report, published in The Guardian in May 2011, suggests that by 2050 the UK will have to spend £80 billion a year more than current on the elderly, with 21% of GDP due to be spent on long term care and pensions as more people live to old age. Dependency ratio will rise with the likely result an increase in taxes and retirement age. Encouraging immigration is one way of solving this problem as working aged population is increased, meaning there are more people to pay taxes into the system. Most refugees are also of reproductive age meaning, birth rates increase and a long-term solution to an ageing population is found. However whilst dependency ratio may be decreased by encouraging immigration, strain on other services is likely to occur. Education in particular is suffering, partially down to high immigration from the EU, and encouraging more refugees to enter the country will only make this worse. It is worth noting that the scale of the effects is open to question, especially as currently just 0.19% of the population of the UK are refugees. The economic theory is not always strictly applicable as the effects will largely depend on how many refugees end up in these countries, as well as the skill level they have. Indeed the IMF estimates refugees will add 0.19% of GDP to public expenditure in the European Union in the short run – but output will increase by 0.1% as the refugees integrate into the workforce.

There is also a cultural issue to immigration of refugees that must be considered before encouraging further refugee immigration. Many people, especially the political left, believe that diversity and multiculturalism are a positive part of society. However in the article ‘Integration Nation’ published in the Economist on May 21st 2016 the problem of Britons of different backgrounds drifting apart was highlighted. Former head of the Equality and Human Rights Commission Trevor Phillips criticised the current policy of ‘organic integration’ suggesting that some minority groups have been allowed to drift a long way from Britain’s cultural norms, meaning they hold ideals far from the general liberal ideas in the UK. This problem will not be solved by increasing immigration of refugees unless this policy is changed. This is possible, according to Mr Phillips, by encouraging a more muscular approach to integration of ethnic minorities into British society. The election of Muslim Sadiq Khan as the new mayor of London may well assist in this. In the current world there is a significant threat of terrorism with the November 2015 Paris attacks particularly highlighting this. A number of the attackers were thought to have originally travelled over to Syria to fight and came back to France as refugees to carry out the attack. Naturally this has created fear in citizens of European countries concerned that there will be a similar attack. This is an understandable fear and should not merely be dismissed as racism or xenophobia – encouraging immigration of refugees is not a problem in itself but security checks on those coming in must be maintained. It is possible to point to the fact that the killers of British soldier Lee Rigby for example were actually British themselves; the threat of terrorism is not prevented by stopping immigration.

To conclude then it is clear that encouraging more immigration of refugees is beneficial for the refugees in question as it helps to protect their lives, but also gives them the opportunity for a high standard of living. Whether their host country would benefit from such measures depends on who you ask. A business owner for example is likely to be more enthusiastic than a builder due to the likely changes in wages and productions costs that will arise. Indeed the overall effects of immigration of refugees on an economy depends on the type and number of refugees coming in – Britain may benefit from encouraging immigration of refugees that are of working age and have skills that are currently required: skilled doctors for example. Cultural issues may be present but can easily be addressed if the approach from the authorities is correct – there is no conclusive overall effect positive or negative. Indeed it is true that as the conflict in Syria continues, the effect on taking more refugees on the economies of the countries taking them may become a minor issue as countries feel they have a humanitarian responsibility to take refugees in.

Bibliography

http://www.redcross.org.uk/What-we-do/Refugee-support/Refugee-facts-and-figures

http://www.tradingeconomics.com/united-kingdom/unemployment-rate

http://www.childrenssociety.org.uk/news-and-blogs/press-release/uk-asylum-system-forces-thousands-children-live-severe-poverty

http://www.refugeecouncil.org.uk/assets/0001/5702/rcchance.pdf

http://www.economicshelp.org/blog/6399/economics/impact-of-immigration-on-uk-economy/

http://www.economist.com/news/finance-and-economics/21688938-europes-new-arrivals-will-probably-dent-public-finances-not-wages-good-or

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