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UK underestimates immigration benefits

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According to a new report by the Institute for Public Policy Research (IPPR), the United Kingdom's government, local authorities, and employers underestimate the benefits that migrants contribute to the economy.

The report looked at the economic impacts of immigration and argued that discussion about local impacts tend to focus on issues such as public services and wages, neglecting the many positive contributions that immigrants bring to the local economies.

IPPR's report highlighted three beneficial effects that migrants bring to local economies: improving the 'skills mix' in an area, increasing an area's diversity, and changing the size and productivity of local areas in the UK.

The local 'skills mix' was affected by migrants filling skills gaps and doing jobs that UK workers do not want to do. IPPR argued that local government and employers should ensure that the benefits of hiring overseas workers are accompanied by measures to ensure that native workers' wages and job opportunities are not adversely affected. They also recommended that businesses should not become overly reliant on migrant workers.

IPPR said that employers benefit from diversity because diverse workforces tend to be more productive and creative -- boosting business performance.

Local economies also benefit in a number of ways, according to the report, because:

  • migrants may have different skills which can lead to new types of businesses
  • more migrant-owned businesses tend to result in greater business diversity
  • migrants have important links with their home countries which can be advantageous to local economies -- for instance, expanding the size of the market that local firms can sell to

The report also suggested that employers should do more to make sure that migrants remain in the UK. According to the IPPR, over a million immigrants that came to the UK from the European Union after eight Eastern European countries joined the bloc in 2004 have since gone home.

"Migrant workers can bring enormous benefits to local businesses and areas," said Laura Chappell, IPPR Research Fellow. "However, many of these contributions – such as new ideas and ways of working, and an entrepreneurial spirit - may have been neglected in the past. To get the most out of migration, local communities, alongside local leaders, businesses, universities, and central government, need to recognize the variety of benefits that migrants can bring, and plan accordingly."

"Political leaders also need to sharpen their narrative about migration, particularly on the longer-term effects on local areas," she added. "Migration flows are critical, but the bigger story is how we manage more diverse communities to deliver the greatest benefits for all."