As globalization progresses, the world economy has developed significantly through the exchange of people across national borders. Through the expansion of people exchanges and their accumulation in cities, various kinds of knowledge have been collected, and by exerting synergistic effects, benefits such as the creation of innovation and improvement of productivity have been produced. Within the past two decades, immigration has tripled in the United Kingdom. For instance, in 2016, the number of immigrants was 514,000 while in the 2000s, the number was estimated to be 500,000 (Blinder & Allen, 2016). Therefore, this is a clear indication that the number of immigrants increases over the years. People migrate to the UK for many reasons, such as studying, working opportunities, welfare, and trade. As such, the rising influx of immigrants has led to positive and negative effects on the UK. The essay will argue that the growing number of immigrants in the UK has increased aggregate demand and real gross domestic product, labor force, and decreased wages.
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First, the influx of immigrants has led to an increase in aggregate demand and real GDP. This is because more skilled people coming to work in the UK increase labor supply and aggregate demand. For instance, immigrants will buy goods and services in the UK. Suppose the inflow of immigrants decreases, leading to losing the boost to real GDP and having a lower GDP. According to Pettinger (2019), the UK’s economic growth has escalated due to more people moving in. Due to the declining birthrate and aging population, the elderly population is increasing, and the population supporting social security, such as pensions, is decreasing. Since the UK cannot secure financial resources for social security, it has to respond by raising the consumption tax, but if the population continues to decline, even that will become uncertain. Accepting immigrants poses risks such as an increase in the population to which the social security system is applied, but the benefits of accepting immigrants are higher. This is because the population is fundamentally required to establish the social security system.
Second, most people migrating to the UK are looking for employment opportunities, thus increasing the labor force. Additionally, the UK needs skilled personnel such as nurses, plumbers, and doctors. Such professionals can have a positive effect on hospitals and people as there is no need for training (Koch, 2016). In contrast, if there is a shortage of such skilled professionals, for example, doctors, there will be poor hospital services, such as waiting in line for hours without being served. From a global perspective, many studies have shown that accepting immigrants works economically positively and that accepting foreigners not only solves the labor shortage but also has many positive factors in business. For example, in the 19th century, nations that accepted immigrants, such as the United States, developed faster than nations that sent immigrants, such as Italy and Ireland. This is because the labor force has increased in the destination country and decreased in the country of origin.
Finally, from individual perception, a rise in labor supply could reduce wages. Migrants can lower wages, mainly if they accept them, bypassing traditional union bargaining. The rising inflow of people into the UK in the 20th century was consistent with the real wages. Increased migration will affect labor demand because of high spending (Eldring & Schulten, 2012). Migration increases labor supply and demand, but other markets may experience lower wages if there is a concentration of foreigners eager to work (Gallardo, 2016). To illustrate, suppose wages are high in a specific agricultural market. If the immigrant accepts low wages below the equilibrium, it may cause a decrease in the wage level.
In conclusion, immigrants of all kinds have always been needed to form a strong economy, and this fact will not change soon. Although accepting immigrants certainly presents several challenges, it is also true that there are merits, and it is possible to coexist having differences in languages and ideas. Denying the other person leads to racial discrimination; however, since they are human beings living in the same world, they can learn to understand each other. To do so, the British need to think carefully about how to accept immigrants and how to interact with people from other countries, regardless of government policy. The synergistic effect created by incorporating unprecedented ideas and cultures will surely work as well. Based on the findings, it is revealed that immigration could have positive effects on the economy of the UK. However, the findings are not conclusive because few sources were used. In addition, most of the research focused on economic effects.
Blinder, S., & Allen, W. (2016). UK public opinion toward immigration: Overall attitudes and level of concern. Web.
Eldring, L. & T. Schulten (2012). Migrant workers and wage-setting institutions: Experiences from Germany, Norway, Switzerland and the UK. In B. Galgoczi, J., Leschke, & A. Watt, (Eds.), EU labour migration in troubled times. Ashgate.
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Gallardo, V. (2016). Immigration and the United Kingdom: An analysis from the late 1800s to 2015 and Future Prediction (Doctoral dissertation). Honors College.
Koch, T. (2016). Before a potential Brexit: European immigration to the United Kingdom, its relative benefits and politico-economic implications [Doctoral dissertation, PhD thesis] Johannes Gutenberg University.
Pettinger, T. (2019). Impact of immigration on UK economy. Web.