The myth of the beneficial economic influence of immigration

The myth of the beneficial influence of immigration


‘As Africa’s population doubles, a lot of them, whatever the circumstances, will be coming to Europe as economic migrants or as refugees. They will be coming — many of them, and that is a good thing if they come into a place with an open mind and those economies are doing well because we will be senile. We will be senescent demographically. We’ll need their youthful energy to do stuff. So, that is just what the economic statistics tell you and the demographic data demands, you know…and demography is destiny’.1)

Such a statement was made at Ireland’s Joint Committee on Foreign Affairs and Trade and Defence by Jamie Drummond, Executive Director of ONE, a pressure group “campaigning against extreme poverty and for the transformation of developing economies and the achievement of the Sustainable Development Goals” whose top members include such personages as Bono, the lead singer of U2, David Cameron, former Prime Minister of the United Kingdom, Lawrence Summers, former Secretary of the Treasury of the United States.2)

Demography is destiny. Precisely. Jamie Drummond is talking about importing “youthful energetic” Africans to “do stuff” for us because we are senescent. And he probably believes everything will work out fine. Humph.

The nonsense of mixing different races is too self-evident to even discuss, so much so that historical record proves that such mixtures unavoidably end up in one of the following or a mixture of them:

  1. stratification of the society into a caste system (India, United States, Brazil) with ubiquitous ghettos and no-go zones;
  2. miscegenation that changes the host nation beyond recognition (present-day Egypt as opposed to ancient Egypt; the Ottoman in place of the Byzantine Empire; present-day Mexico and pre-Columbian Mexico);
  3. civil unrest and civil war with mass butchering (Polish-Ukrainian or Armenian–Turkish borderlands; Tutsi and Hutu in Africa).

The very idea of wishing to change the face of one’s own kith and kin is an aberration. So it is, but then economic arguments are raised, and to some people money is all that matters. In the case of the Old Continent, it is often said that since Europeans have stopped multiplying, they need an influx of people from around the globe (why are Europeans not encouraged to have children in the first place?) so that the welfare state will continue, especially because the growing elderly population in the West becomes a liability for those participating in the labor force.

A welfare state provides for all its citizens. That’s a very humanistic idea and it sounds very attractive. Who wouldn’t like to be taken care of? It seems all right so long as we do not take a closer look at it. The problem is that goods and services cannot be granted until they have been made. Full stop. You cannot distribute things that do not exist. Things and services are made by people, by particular men and women. That’s obvious. Yet they are not made by each and every member of society: children and the elderly, to use the most obvious categories, do not make things or provide services. They are recipients of them. It means that a part of society works to satisfy their own needs plus the needs of those who cannot or do not work.

A statement that immigrants are beneficial to our societies must be well founded. Economy and social sciences have tools for assessing numerical phenomena. One is referred to as the dependency ratio which is the number of people in the nonworking age divided by people in the working age and multiplied by 100:

Nonworking-age people are defined as those in between 0- 14 and over 65. The nonworking-age people are conveniently called dependents. The dependency ratio shows the number of dependents who are supported by 100 working people. The higher the dependency rate, the greater the burden a society must bear. This ratio is more of a demographic rather than economic value because working-age people do not necessarily work, so the word dependency is a misnomer, is counter-intuitive.The other term is known as the labour force participation rate (participation rate for short) which is the number of all the employed plus those looking for employment divided by the number of all the working age people who do not want or cannot work (such as students, homemakers, retirees, incarcerated people) and multiplied by 100:

The drawback of this approach is that people looking for employment neither participate in the labour market nor contribute in any way to the overall economy. If they are on the dole, they are dependents, recipients of goods and services.The participation rate is not to be confused with the unemployment rate which is calculated as follows:

Notice that working people may denote those with full-time or part-time jobs, whereas unemployed are those who are officially unemployed but continue to work within the framework of the grey economy. Now, a large number of African and Central and South Asian people (predominantly males) who invade Western Europe are aged between 16 and, say, 40. Within the meaning of the three definitions their presence:

  1. lowers the dependency ratio. That’s because we have an influx of working-age people whereas the number of nonworking age people remains constant.
  2. lowers the (labour force) participation rate. That’s because the number of working age people rises but the number of employed people does not (or only negligibly) as the immigrants remain unemployed due to the language barrier and the lack of required skills. Thus they fall into the category of those who cannot work and arguably those who do not want to work. The latter is due to a comfortable (especially as compared to what they had in their countries of origin) life that they can have living on social benefits.
  3. raises the unemployment rate. That’s because immigrants are for the most part unemployable and again arguably not eager to find work for reasons given above.

In order to evaluate whether the admission of Third World immigrants is beneficial or detrimental, we need to know what the ratio and the two rates tell us about a country’s economy. So,

  1. The lower the dependency ratio, the better. This metric has, however, a demographic rather than economic value (as remarked above), since it does not really tell us how many genuine dependents there are.
  2. A lower labour force participation rate may be interpreted in different ways. Homemakers and students do not participate in the labour market and still are valuable to society; retirees may be regarded as a liability, while the prison population is a burden, and a heavy one at that. In the case of predominantly young male immigrants, we can hardly talk about homemakers or retirees; it is a matter of another study to see how many of them are students. One thing is certain, though: they make up a disproportionate percentage of the incarcerated.
  3. The larger the unemployment rate, the worse is the overall condition of a country’s economy judging it from a social point of view. In Western welfare states it means that an ever increasing section of society lives on social benefits.

What we lack here to have a simple and clear picture is the ratio of people who produce things and provide services to those who are only recipients of them or the other way round. Yet, on the basis of the three metrics, we can make an informed assumption that the newcomers enlarge the group of recipients of goods and services without contributing (much) to the overall welfare in return.

Why, then, does an invisible hand want to let immigrants in? Obviously, the purpose is other than the one that we are fed with by the media, academicians and politicians.


Original article

ER recommends other articles by Gefira


1. Bono’s NGO ‘ONE’ aims to facilitate the immigration of Africa’s doubling population into Europe: YouTube 2018-03-16.
2. ONE website.

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