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Will the U.S. follow Britain's wrong turn on immigration?

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Friday, February 11, 2011

LONDON

Immigration has a way of making nations irrational, if not suicidal.

The French have banned burqas in defiance of their liberal tradition. The Swiss have banned new minarets despite their reliance on Arab bank deposits. The Japanese have shut off most immigration though they grow demographically decrepit.

Perhaps the most self-defeating act is taking place here. Last summer, the Conservative government of David Cameron imposed a temporary cap on immigration of high-skilled workers from outside the European Union. Indian and Chinese workers with the latest computer programming skills, for example, were turned away. In December, Britain's High Court voided the measure for not having been approved by Parliament. No matter - Cameron's government already planned to submit to Parliament an even more stringent, and permanent, cap. Popular with the public, it is likely to pass.

But then, whatever their real interests might be, voters, like politicians, often see the world in us-vs.-them terms. Such thinking can lead to excesses, which is something President Obama and the American business community might keep in mind as they seek to bury the hatchet after the president's visit this week to the Chamber of Commerce. Britain provides a political lesson for what can happen to their shared goals of stimulating innovation and the economy if they don't work together.

Economists will say that high-skilled workers are the primary source of growth in a nation's per capita income. Immigrants with such skills have been central to the rise of almost every major empire in history, including the British Empire and America. Germany, Canada, Australia and others now compete for these immigrants, while India and China are trying to attract them back.

Yet in many countries, conservative political parties such as the Tories or the Republicans, who normally trumpet economic growth, have turned inward, sidelining their business constituencies on immigration. Most are protecting their flanks from a far-right movement that stokes popular fears and, sometimes, xenophobia. Think Tea Party.

The fears aren't totally groundless. There is a limit to how many immigrants a nation can absorb without its natives feeling culturally insecure, its institutions being overtaxed or the wages of some workers being temporarily undermined. But these concerns argue for rational policies to balance competing economic interests and to educate the public and immigrants alike.

The British case is particularly instructive of what not to do.

Out of a workforce of 28.7 million last year, 2.25 million, or 7.8 percent, were foreign-born, according to the Office of National Statistics. The comparable share is 16 percent in the United States.

Nearly half the foreigners in Britain come from the E.U. area and by treaty cannot be restricted. Of the rest, the top four origins are, in order, South Africa, India, Australia/New Zealand and the United States (with 81,000).

Even though Britain's level of net immigration peaked in 2004 at roughly 350,000 and has dropped roughly 40 percent since, the Great Recession has fueled public cries for more cuts. A Transatlantic Trends poll released this month found that 59 percent of Britons believed there were "too many immigrants," compared with 37 percent of Americans and far less in the six other European countries polled.

Cameron campaigned last year on reducing the annual number who came from outside the European Union, 196,000, to "tens of thousands." Many immigrants coming here are relatives of British citizens, however, and hardly any unskilled workers get visas. That leaves just skilled workers as an easy target. Cameron capped their number at 24,000 this year and plans to make it 22,000 next, a fifth less than in 2008.

Cameron has dragged along his reluctant coalition partner, the Liberal Democrats, and large multinational corporations by allowing these companies to transfer skilled employees from abroad. That ignores the smaller entrepreneurial businesses that generate most jobs in an economy - and Britain's shrunk by 0.5 percent last quarter.

In other words, policy is being made almost blindly out of frustration, not rational thinking. The public wants cuts, the high-skilled workers are the easiest to go after, so politicians take the easy win - at the economy's expense.

The United States is flirting with doing the same. Immigration restrictionists have forced Republicans in Congress to oppose lifting a ceiling on skilled immigrants and want even to cut it, like in Britain. If Obama and the business wing of the GOP don't join forces to push rationality, the U.S. economy is certain to struggle further as a result

.edward.schumachermatos@yahoom


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