Book Extract: Unwelcome Guests?

Rama Shetty is an immigrant businessman from India settled in London who voted for Brexit. I met Shetty six months after the Brexit referendum, in Chile, where he was vacationing. In the course of our conversation, he laid out a range of reasons why immigrants are a problem in the United Kingdom. He started by expressing concerns about the UK capacity to absorb more immigrants. Britain has more immigrants per capita and per square mile than any other European country, he said. Shetty’s numbers, it is fair to say, were factually incorrect. Thirteen EU countries have higher per capita foreign-born populations, and Switzerland and Germany have higher immigrant densities than the United Kingdom.

Immigration from the European Union imposes a fiscal burden on British citizens and Brexit will reduce this burden by restricting entry of low-skilled immigrants from Europe, he continued.

“Why low-skilled immigrants, in particular?” I asked. “Low-skilled immigrants from Europe have as much access to public services, schools, and hospitals as UK citizens. But they contribute little in taxes,” he patiently explained. Because of immigration, UK citizens must wait for months to get essential medical services, he added. Studies of the fiscal effects of immigration in Britain show otherwise, I countered. These studies document that immigrants are net contributors to the UK exchequer.

My interaction with Shetty is typical of the discussions I have had with people who oppose immigration—they’re passionate about their concerns, even if they don’t square up with the reality. What is the real cause of their anxiety? Demetrios Papademetriou, founding director of the Migration Policy Institute, a Washington-based think tank, and member of the Transatlantic Migration Council, does not share Shetty’s view on the causes of public anxiety about immigrants.
“Immigration is not necessarily the only, or even the most prominent driver of anxiety,” Papademetriou wrote in 2012. But that raises the question: if immigration is not the root cause, why is there such widespread political and public angst about it? What’s behind the rise of Marine Le Pen, Donald Trump, Viktor Orban, Geert Wilders, and other right-wing politicians across Europe and the United States? Are immigrants simply convenient scapegoats—an escape from addressing certain deeper demographic, economic, and social issues that ail immigrant-receiving countries? Or are they the root cause of these deeper problems?

To answer these questions, I examine seven primary drivers of public anxiety and investigate to what extent each of them is related to the volume and pace of immigration. The drivers of anxiety that I discuss are culture and identity, economic slowdown in industrialized countries, rising economic inequality in industrialized countries, demographic and social change, loss of confidence in governments and liberal elites, increase in refugee movements, and the rise in international terrorism.

The fear that immigrants bring with them alien cultures that threaten to disrupt the identity of host nations is high among local populations. It does not require a large wave of immigration to trigger crises of identity and culture among native populations. Indeed, discontent is less severe in states with more diversity. Muslims are perceived a threat in Hungary and Poland even though they constitute a tiny proportion (less than 0.1 percent) of their populations. In a survey of Polish citizens, more than half the respondents said that they would welcome Americans, Czechs, and Germans—but not Arabs and Turks. The Czech Republic, Hungary, and Slovakia also want to shut out Muslim immigrants; they have a Christians-only policy for accepting asylum seekers from Syria.

This is said to be not because they have too many Muslim immigrants but because they do not have any. “We don’t have any mosques in Slovakia so how can Muslims be integrated?” said a government spokesman.  Immigrants do not always have to look different or practice a different religion to be perceived as a cultural threat. The threat of foreigners in the Brexit vote in 2016, for instance, did not come from dark-skinned South Asians or Africans or Muslims from the Middle East but from fair-complexioned fellow Europeans from Poland and Romania.

Changing demography from immigration is not the only threat to cultural identity. Political scientist Samuel Huntington argued in his book Who Are We? that the rise of nationalism in the United States was a response to national elites developing international identities and national corporations representing global interests.

It is not just the volume of new and existing immigration but the fear of immigrants’ presence in the near or distant future that is triggering identity and cultural conflicts in some countries. “We don’t want to end up like Germany!” said Andrej Babis, prime minister of the Czech Republic, in opposing EU migrant/refugee quotas.

The prevalence of distinctly diverse public attitudes toward Syrian refugees across the Middle East and Europe documents how cultural dissonance influences attitudes toward immigrants and refugees.

Between 2011 and 2016 Turkey received close to 2.7 million Syrian refugees, which is 3.5 percent of its population. Europe received a little over one million Syrian refugees in this period, which is a mere 0.2 percent of Europe’s population. Both in percentage and in absolute terms, the refugee inflow has been much larger in Turkey than in the European Union, but anxiety over refugees is far greater in EU countries than in Turkey. Despite a growing incidence of terrorism on Turkish soil arising from the civil war in neighboring Syria, public and governmental sympathy for Syrian refugees remains high in Turkey, whereas the refugee influx has strengthened anti-immigration political parties throughout the European Union…

Economic Slowdown in Industrialized Countries
The recent rise of the far-right political parties and public dissatisfaction with the establishment parties in most of Europe and the United States have coincided with the economic slowdown in industrialized countries and the strengthening of emerging economies. In 1990 only 5 percent of Fortune 500 companies were from emerging economies; in 2016 the number had risen to 26 percent. In the early 2000s outsourcing to developing countries was largely of low-quality routine jobs. In the 2010s Google, IBM, Apple, Facebook, and many other multinational corporations have moved their cutting-edge operations to emerging economies as well, creating economic uncertainty for workers in rich countries. In the 1990s and 2000s emerging economies primarily assembled the high-tech products designed in the industrialized West. The 2010s saw the springing up of world-class tech giants in emerging economies. In March 2018 the Economist warned, “America’s technological hegemony is under threat from China.”

Globally, labor’s share in total income has been declining. Between 2000 and 2014 in nine OECD countries, real wages increased by less than 5 percent, a third of the increase in labor productivity. In the United States, the wage share in income fell from 64 percent to 57 percent between 2000 and 2017.

The decline is of comparable magnitude in many European countries. “Americans can no longer expect to be twice as well off as their parents,” says economist Robert Gordon, who has studied trends in economic growth and productivity in the United States. Public aspirations, however, have not adjusted to the new reality. Gordon describes headwinds in six areas that he predicts will keep per capita growth in GDP in the United States to nearly stagnant levels in the future. These areas are demography, education, inequality, globalization, energy and the environment, and consumer and government debt. Even if innovations were to continue into the future at the same rate as they did in the two decades preceding 2007, Gordon argues, economic growth would fall to less than half of its long-term trend on account of these headwinds. That’s the most optimistic of Gordon’s various growth scenarios. He is quite sceptical that future innovations will continue at the same pace as in the past. In the most likely scenario, he argues, per capita economic growth in the United States will be down to 0.2 percent—meaning nearly stagnant living standards.

Economic predictions for European economies are as dismal. For one, Europe faces worse headwinds than the United States on account of demographic factors. The working-age population in many European countries has been stagnant or even shrinking for some time. The Great Recession hit Europe harder, and its economies had a slower recovery compared with the United States. In 2018 the real GDP of EU economies was lower than it was in 2008; in 2018 the unemployment rate in EU countries was 2 percentage points higher than it was in 2007, resulting in several million missing jobs. Wages fell in the worst affected countries—Greece, Ireland, Japan, Portugal, and Spain—and remained stagnant or experienced negligible growth in many others.

How does immigration affect economic growth in industrialized countries? Far from being a cause of productivity decline and low economic growth, Robert Gordon says that immigration could be a solution. His argument: the retirement of baby boomers has lowered working hours per capita, which has reduced per capita income growth. One way to increase hours per capita, he argues, is to increase the ratio of working-age people to retired people, which can be done with a rapid inflow of immigration.