I insist: immigration or the welfare state

Four weeks ago I published an article in which he pointed out that low-paid immigration – the kind that attracts our tourism, our agriculture and our personal care services – undermines the welfare state, since the taxes and social contributions that these people bear are less than the cost of the services they will receive throughout their lives.

That article has prompted several comments, of which I would like to highlight two today. The first criticizes me for focusing on the immigrant and not on the salary he receives. The second He argues that immigration is good for the receiving society when we include the children of immigrants in the equation, because there are more of them and they can be more productive. I will answer them one by one.

I'll begin with a categorical statement: the problem isn't that we're receiving unskilled and therefore unproductive immigrants; the problem is that we're creating too many unproductive jobs that must be filled by unskilled immigrants. The solution, therefore, shouldn't be sought by targeting the immigrants themselves, but rather the employers who hire them and the laws that enable it.

In turn, it's necessary to consider the client of this business owner, who, after all, is receiving a service at a price that doesn't cover their total costs. Let's consider a middle-class couple who legally hire a caregiver for their parent. Since the worker's salary—typically, though not necessarily, an immigrant—doesn't cover the cost of healthcare, education, housing, pension, disability benefits, etc., to which they are entitled, we must conclude that the couple is being subsidized by society. Does this subsidy make sense? We can discuss that.

Let's consider the case of a hotel owner who hires immigrants. In this case, the ultimate beneficiary of the subsidy is the tourist, since the price they pay doesn't cover the social costs of the service they receive. Does it make sense to bring in foreign customers and immigrants to serve them if, to do so, society has to contribute money? The answer is no, even though that's exactly what we're doing.

Therefore, the conclusion is not that we must stop the entry of immigrants to save the welfare state, but that what we must do, to save it, is stop supporting productive sectors based on cheap labor, particularly when the customer is a non-resident.

We now turn to the issue of the children of immigrants.

Indeed, if the children of low-skilled immigrants were highly productive, the long-term balance of low-skilled immigration could be positive: while the immigrant works, they contribute little, but they do contribute, and when they retire, their children take over, contributing generously. Unfortunately, the facts show that this view is nothing more than a fantasy.

As for parents, the British Office for Budget Control has calculated that – on average – a low-skilled immigrant arriving at working age has a net cost to the public purse from day one, and that the bill increases year after year without having to wait until retirement (see graph 1 ofthis linkThe reason is that, in addition to having low incomes due to low qualifications, their propensity to work is lower than average. This second effect—very important—varies considerably depending on the immigrant's geographic origin, an aspect that the British do not discriminate against. The Danish Ministry of Finance, which does discriminate, highlights how the negative impact is felt from the outset among immigrants from the Maghreb, the Middle East, Turkey, and Pakistan. In the case of Spain, the INE (National Institute of Statistics) tells us that, while 77% of Spanish women between 25 and 54 years old work, the figure is 70% among European and Latin American immigrants, but only 38% among those from the rest of the world (that is, in our case, the Maghreb, Sub-Saharan Africa, and Sub-Saharan Africa).

As for the children, it's unreasonable to expect them to be highly productive on average. In Denmark, the descendants of non-Western immigrants also have a negative impact on their lifetimes. Not as negative as their parents, but very negative in the case of those from the aforementioned countries. This is not surprising, given that we know an individual's career path is strongly correlated with their parents' socioeconomic status.

The conclusion? If we want to prevent the children of low-skilled immigrants from becoming a lower class, we must stop sending them to highly specialized schools and passing them to the next grade regardless of what they learn. Precisely because they are the children of immigrants (and especially if they are daughters), they need different, and much more expensive, attention. It's not a business model.