The main argument of the pro-immigration lobby, as I pointed out last week, is the net economic benefits from immigration outweigh social costs over time.
This argument has been turned into an axiom — self-evident truth — by the pro-immigration lobby, and is broadcast by the mainstream media. Anyone or any group who dare question this axiom are intimidated, silenced and marginalized by the pro-immigration lobby, through the media, as reactionaries, or worse, as bigots.
That was the lesson taught to Enoch Powell, the British MP who warned of the negative consequences of open immigration in his April 1968 speech to a Conservative party gathering in Birmingham, England. He was branded as a mad hatter and a bigot, and his destroyed political career stands as a warning by the pro-immigration lobby to politicians questioning its agenda and what it can do to them.
But the axiom needs to be examined, since an economy such as Canada’s is complex and social costs are real.
Moreover, long before Powell’s Birmingham speech, western societies had begun to change as the blueprint for a social welfare state was adopted. This meant net social costs — universal health care or old-age pension — in the short and medium term would outweigh economic benefits from immigration in the long term.
In a completely free market society, it can be argued, open borders allowing for unrestricted capital and labour movements will reach equilibrium over time in which benefits outweigh costs of adjustment. A social welfare state is not an unrestricted free market society. Consequently, social and economic costs of open immigration in a welfare state, when aggregated, outweigh benefits.
Milton Friedman (1912-2006), the winner of the 1976 Nobel Prize in economic sciences, was a long-time champion of free-market economy and open society. His book Free To Choose (1980) remains a huge international bestseller.
Yet Friedman, despite being a staunch advocate for freedom, warned, “You cannot simultaneously have free immigration and a welfare state.”
Two Canadian economists, Herbert Grubel and Patrick Grady, with distinguished careers in academia and politics, prepared a detailed analysis of the economic cost of immigration. Their study was published by the Fraser Institute in May 2011, and it can be easily accessed on the Internet.
Grubel and Grady looked at the fiscal burden of immigration by examining the average incomes and taxes paid by immigrants over the period 1987 to 2004 (according to government sources and the 2006 census database) in comparison with the rest of Canadians.
According to this study, “in the fiscal year 2005/06 the immigrants on average received an excess of $6,051 in benefits over taxes paid.”
Furthermore, taking into account the number of immigrants who arrived over the 17-year period under study, and after adjusting this number for emigration and mortality, the authors found immigrants received in fiscal year 2005/06 net benefits worth $16.3 billion.
This study severely weakens the pro-immigration lobby’s contention.
And if the economic argument for higher levels of immigration is unsustainable, social costs in a welfare state with multiculturalism make it indefensible.