Immigration remains one of the most politically charged issues in the UK. This month, Labour leader Sir Keir Starmer warned the country risks becoming a “strangers’ island,” signaling a sharp shift in government rhetoric.
Experts have long noted the economic benefits of immigration, with the UK currently admitting over one million new migrants annually. While net migration typically increases national GDP, it is less clear whether this growth improves average household wealth.
In response to record immigration levels last year, the UK government commissioned a group of academics to examine the impact. Their findings linked rising immigration to higher productivity, a crucial factor influencing individual wealth.
Jonathan Portes, economics professor at King’s College London, said, “In the short term, immigrants—including those currently arriving—have a positive effect on GDP per capita.” He added that “on average, immigrants earn similar wages to British workers and integrate well into the labor market.”
However, real wages for UK workers have seen little growth since 2008, adjusted for inflation. While the Labour Party aims for stronger economic growth to boost wages, Portes emphasized that immigration alone cannot achieve this.
“Immigration by itself cannot solve the UK’s growth challenges. It is not the main determinant of the UK’s economic growth rate,” he said.
Portes pointed to Brexit, austerity, and government mismanagement as key reasons for slow growth over the past 15 years, rather than immigration. “Immigration is one positive factor among many,” he noted.
The study, co-authored by Portes for the Migration Advisory Committee, an independent government advisory body, analyzed data from 2002 to 2018. It found immigration had a “positive and significant impact,” with every 1% increase in the immigrant workforce share raising productivity by 0.84%.
Despite millions of immigrants arriving in recent decades, their earnings have remained largely stagnant since the global financial crisis.
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