The economic gains from opening borders

From far right parties in Western Europe to member states of the East African Community, politicians blame foreigners for the lack of employment in their countries. Often in debates there are numerous sides which allow for various people to be correct at the same, this is not one of them.The free movement of labour is in everyone’s best interests and politicians need to stop hindering the process of integration. The strongest argument against free labour movement is that immigrants will take the jobs of nationals. While this may be the case, it is not technically a bad thing. Few rational employers would hire a foreigner when an equally productive national is available. An employer will only hire a foreigner, over an equally qualified national, if, for example, they are cheaper and/or more productive. Development is driven by firms’ being efficient, producing the most, paying the highest taxes, therefore, creating more jobs. Nearly half the students at both Harvard Business School, in the United States, and Oxford, in the United Kingdom, are foreigners. So these countries allow students to be educated at arguably the best schools in the world and then send a good proportion of them home. Economically these schools cannot exist without the financial benefits that foreign students bring. So while the schools want foreign students, the national governments don’t. This is in effect an educational subsidy for the rest of the world because these students remain effective managers, policy makers, doctors, etc. According to the Financial Times, in recent years Eastern European immigrants to the UK added £8.8 billion to the British economy. A study by the Center for Global Development, in Washington DC, argued that immigration from Africa to the West may have added over a trillion dollars during the 1970s and 80s. Politicians use the immigration debate, more often than not, to fan populist agendas. Even within the East African Community some nations have claimed that they don’t want foreign labour. Fundamentally though, governments need to leverage the abilities of all workers and educate their populations better. Competition may not be desirable for an individual but it is always in the interest of a community. Having more competition for jobs will ensure that the best people get employed, that the firms are more resourceful and that more jobs are thus created. It is every government’s responsibility to educate their populations and give them the skills to compete. No person in the East African Community should fear the consequences of people from the region taking their jobs if they believe that the government is doing its best to make them competitive for these jobs. However, in the event a government is not, the problem is not the foreigners that firms want to employ but the education system that has made the local population such unattractive hires. The United States has more Nobel Peace Prize winners than any other nation: 300. Of those 300, over 100 were born outside the United States. Perhaps the most famous macroeconomist alive is Stanley Fisher, who was born in Zambia, headed the International Monetary Fund in Washington DC, became Israel’s central banker, and lately appointed to be Vice Chairman of the United States Federal Reserve. It seems difficult to imagine that any of these nations would have been better off without these people. The free movement of labour provides a nation with the opportunity to take advantage of every worker on earth. The writer is an economist based in Washington, DC