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Monday, 3rd March 2008

Xenophobic Nonsense

10:45am

Really, people should know better than this:

Almost nine in 10 new jobs created over the past decade have been taken by foreign-born workers despite a sharp increase in the number of skilled British workers, official figures show.

Ludicrously wrong.

The number they are using is that if you look at the increase of the number of people in work, 9 out of 10 of them were born abroad. This really isn't very surprising at all. Clearly, if someone immigrates and then gets a job, there is an increase in the number of people in work, for the number of jobs available is not a fixed number. To think so is to subscribe to the lump theory of labour fallacy. Some millions of people arriving create work for others to do to service their needs.

But the error is larger than that. They are counting the nett creation of jobs over that time period. More accurate would be to look at gross job creation numbers. Finagling a bit:

Assuming a price elasticity of demand for labour of 0.6, and that all the adjustment came in job losses rather than shorter hours, this would have cost just 13,000 jobs. That’s equivalent to less than two days inflows into the unemployment figures.

(I know this is wrong in detail but it's largely true) Job destruction (ie, the creation of unemployment) is pretty much the same as job creation, for the numbers of the unemployed have not soared in the last decade. A little change, yes, but not soared. So 13,000 new jobs every two days, or 2.3 million each year, or 23 million over the decade.

Given that there are some 27 million actually employed, the vast majority of all jobs in the UK have in fact been created in the past decade: as is natural in any dynamic economy.

That immigrants make up roughly the same proportion of those in work as they do of the general population of working age is really nothing to worry about....and certainly not worth the hysteria engendered by misusing these nett numbers rather than the gross job churn.

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