Is Immigration “Good” for Business Environment

Topics: Minimum wage, Immigration, Employment Pages: 4 (1350 words) Published: November 29, 2010
Is immigration “good” for British business?
In the most industrialized countries of the world, the rapid increase of immigration has become a contentious issue. As immigration has a great impact on a country’s economy, its benefits and costs have been hotly debated. This essay will focus the economic effects of immigration into United Kingdom.

Large-scale immigration has been a essential factor that contributes to a healthy UK economy and society and is encouraged to flow into UK since a new UK immigration policy published in 1997(D.Colemanand R.Rowthorn,2004 ). According to the office for National Statistics, the net immigration- immigration minus emigration to the UK increased to 237,000 in 2007 (2008). Supporters of immigration will often point to the good impacts of immigration, such as fiscal advantage, increased gross domestic product per head and available supply of labor, while opponents of immigration argue that large-scale immigration will compete with native-born workers in the labor market, displace some natives from jobs and lower their wages.

The remainder of this paper is to evaluate the impacts of immigration on British business. It is divided into three sections, the impacts of immigration on wages, on employment and on growth.

The impacts of immigration on wages
It is undoubted that there is a negative effect of immigration on the wages of natives. Assumed that all immigrants are low-skilled, this will lead to a supply shock of unskilled labour at pre-immigration wages. In that case, firms will try their best to lower the wages of unskilled workers to meet their demand of labour (C.Dustmann and A.Glitz, 2005). However, this impact on wages of unskilled natives is not enormous. Due to the excess supply of unskilled workers, skilled workers in the economy are employed at a higher wage. In other words, reducing wages of unskilled workers may contribute to an increase of wages skilled workers (C.Dustmann and A.Glitz, 2005)....
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