Wednesday, July 25, 2018

Oh yeah? So what has happened for the last ten years, exactly?

Over at the ASI, they are posting some of the winning entries of the Young Writers on Liberty. One does not want to put such keen minds off, but there are some slightly odd assertions being made: let us take, as an example, the essay titled Immigration is key to solving the productivity crisis.
Currently the UK falls significantly behind the levels of productivity in similar countries. Between 1997-2007, average productivity grew by 2.1% each year: only 0.01% behind America. But from 2007-2017, the UK has only experienced an average of 0.2% productivity growth per year, falling behind America, Germany, France and more. The financial crash of 2007 is partly to blame for a decrease in productivity, as experienced by all countries worldwide, however the UK has not recovered as well as other countries and this can be put down to poor policies which do little to boost our productivity.
Well, there is very little to disagree with here—our governments have been spectacularly rubbish, for sure.
Immigration is a key policy area which will need to be addressed to increase productivity.
Oh, rilly? Colour me sceptical...
Many overlook the advantages of skilled migrant workers in an economy as it is argued that they “steal jobs” from UK citizens. It is also claimed that migrants are a burden on our economy and welfare system. In reality, migrants do not crowd out employment (the so-called 'lump of labour' fallacy) and many take up lower-skilled jobs that UK citizens do not want to carry out.
OK, so we have a definition problem here: skilled migrants, by definition, do not take-up "lower-skilled jobs"—and I don't think that you'll find many people objecting to skilled migrants. But, as pointed out by Alex Noble at the Continental Telegraph, we need to define our terms and understand what we want.
So far so good—we need a supply of skilled migrants for the foreseeable future. Hopefully we can all agree on that.

Do we need unskilled migrants?

Because when people with no skills come to the UK, we suffer and so do they. They are either forced into crime, fall into modern slavery, or find themselves exploited working on the black market.
To return to the ASI article, the conclusion is wrapped up as follows:
Therefore it is clear that migrant workers are a vital part of our economy.
Policies need to be put in place by our government to allow free movement to continue if our economy is to become more productive. Also we need to allow workers to come into our economy to fill occupational shortages. If we have occupational shortages and no migrants fill the places due to government policies creating a barrier to their entry, we will have failed in boosting productivity and becoming a more diverse, rich society.

The bottom line is that a boost in productivity will increase our living standards and immigration is a key factor to helping us along the way. Skilled migrants do contribute to the economy and to a much larger extent than many are willing to accept.
Skilled migrants might do—but it is not clear that all migrants do. And I am very far from convinced that becoming a "more diverse" society is necessarily what the British people want: some large proportion of them do not—there are many memes mocking the "cultural enrichment" of this country.

But leaving aside the potential damage that "diversity" does to a demos, this argument ignores the progress of the last ten years: a decade during which, apparently, our productivity has fallen off a cliff.

Has the last decade seen a notable drop-off in immigration? No, it has not: in fact, net migration has pretty consistently increased over the last decade.

So, I am confused: if immigrants are so good for productivity, then why has the last decade seen so little improvement in said productivity?

There are a number of possible answers to this question—with the idea that we are counting wrong being one of the more credible. However, let's be clear: productivity is, essentially, a function of output and the hours that go into producing said output. And whilst high-skilled migrants—your computer programmers, etc.—might well boost this measure, a great number of migrants are doing low-skilled, low productivity jobs.

Indeed, a number of skilled migrants are doing low productivity jobs—such as nursing. Yes, we need nurses but working in our health service—prone, as it is, to Baumol's Cost Disease—does not increase productivity by any significant amount. In fact, needing to recruit more nurses from abroad is a symptom of the very problem that we are examining—if productivity were increasing in the NHS, we would not need so many nurses.

Regardless, I am not convinced—on the evidence of the last decade—that immigration (skilled or unskilled) are the secret sauce to an increase in productivity.

Thursday, July 19, 2018

A rubbish fairytale

Inspired by this photo, delivered to your humble Devil's Facebook timeline...

And the government of 500 million of those 8 billion people decided that they didn't like all of the rubbish being buried near them. So they imposed a colossal rubbish burial tax onto the waste disposal people, who wept and wailed.

"Fear not," said the government of the 500 million. "Just ship it off to some poorer countries with lax standards of disposal, and get them and their children to sort through and to dispose of it."

And lo! it came to pass, and everyone was happy.

But then the biggest of the poorer countries (which had now become moderately rich) said, "we do not want your rubbish anymore; and we will not take it." So, the rubbish went to countries with even laxer standards of disposal.

And, yea, a few years later, the 500 million were terribly surprised that the oceans were full of their rubbish! It was almost as though all the countries with lax standards of disposal had just chucked it all into the sea.

What was the government of the 500 million to do? Should they realise that their mining operations created holes more than big enough to take all of their rubbish, and lift the tax on chucking the rubbish into them?

But how would they then fund their exotic travel, and high salaries, and gold-plated pensions?—after all, there was barely enough money to pay for those as it was. But then, with the help of some very large environmental organisations, the government of the 500 million realised that they could have their cake and eat it...

The government of the 500 million decided that they could keep their tax on chucking rubbish into big holes—but get more money by also putting a tax on the rubbish that wasn't chucked into big holes!

And everyone lived happily ever after.*

* Apart from the poorest amongst the 500 million, who were made poorer—especially the disabled poor people who needed straws to drink through. But then these poor people didn't much like the government of the 500 million, and since the government of the 500 million wasn't elected anyway, the views of these poor people didn't really matter.

Oh yeah? So what has happened for the last ten years, exactly?

Over at the ASI, they are posting some of the winning entries of the Young Writers on Liberty. One does not want to put such keen minds off,...