Today, in Britain, as in the US, immigrants play a disproportionate role starting new businesses. A 2023 study found that 39 per cent of the 100 fastest-growing UK companies have an immigrant founder or co-founder, even though immigrants are only 14.5 per cent of the UK population. UK immigrants are also substantially more likely to start businesses than natives, and engage in other types of entrepreneurship. Such businesses contribute to growth and innovation, and provide valuable job opportunities for both immigrants and natives. Both history and economic theory show that there is no fixed number of jobs, such that more opportunity for migrants diminishes that for natives. Rather, natives and immigrants can help each other prosper in a growing economy with greater innovation.
The benefits of immigration can be literally life-saving. The first two successful Covid-19 vaccines were developed in large part thanks to immigrants or the children thereof.
Some fear that immigration will overburden the government budget. But most immigrants actually contribute more to the public purse than they take out. The economist Jonathan Portes finds that government data showed that recent increases in migration (which allowed in about 350,000 more migrants than previously expected) could, on net, increase government revenue by about £5 billion per year. The long-term fiscal benefits of higher immigration are likely to be much greater.
In recent years, some argue that immigration exacerbates housing shortages in the UK. But, in Britain – as in the US – immigrant workers are actually important contributors to housing construction, though that contribution fell since Brexit, which made it more difficult for some migrant construction workers to enter. US data shows that increased deportation of undocumented immigrants reduces housing construction, and thereby might actually exacerbate shortages and increase housing prices.
In both countries, the main causes of housing shortages are land-use restrictions that in many places make it difficult or impossible to build new housing in response to demand. They can be alleviated by repealing restrictions and letting property owners freely build new housing on their land, thereby creating affordable housing for migrants and natives alike. Immigrant workers can play a vital role in that process. Labor party leader Keir Starmer rightly proposes YIMBY (‘yes in my backyard’) reforms that would curb local governments’ power to block new construction.
Another common fear about migrants is the apparent lawlessness and disorder arising from unauthorised migration. But some of these problems, at least, stem from the result of immigration restrictions. When migrants fleeing terrible poverty and oppression have no legal means of escape, they understandably resort to illegal ones, including seeking the aid of smugglers and criminals. Similarly, when the United States had a policy of alcohol Prohibition in the 1920s that created a vast black market for alcoholic beverages, one that created opportunities for organised crime, run by the likes of Al Capone. US data shows that increasing opportunities for legal migration reduces illegal border-crossing. Making legal migration easier can help alleviate Britain’s problems with irregular migration too.
To the extent that migration does cause problems, they can usually be alleviated by ‘keyhole solutions’ that are less draconian than excluding migrants. If, for example, contrary to current evidence, it turns out that migration does burden the public purse, that can be addressed by further limiting migrants’ access to welfare benefits. The US has adopted this approach under its 1996 Welfare Reform Act. The UK already does this for some visa categories. Such restrictions are a better approach than wholesale crackdowns on immigration.
After all, it’s worth remembering that, ultimately, open migration is not just charity for migrants: it can also help create a stronger and more prosperous Britain.