With all the debate over Britain’s post-Brexit immigration policy, its relationship with other nations, and its place on the world stage as a supporter of global development, it is worth going back to basics and reminding ourselves of what exactly our migrants contribute, to both the UK and the world.
Because make no mistake, ambitious and committed migrants are powering London’s economy and transforming lives back home at the same time.
Let’s start with the view from the capital. According to the Migrant Observatory, 38 per cent of London’s population in 2017 were born outside of the UK. This rises to 42 per cent in inner London. These people make a significant contribution to both the city and the nation – in fact, they generate around 22 per cent of the capital’s overall economic contribution.
And while one accusation frequently heard is that migrants “take jobs” from native Londoners, the reality is the reverse. On average, the economic output generated by 10 migrant workers supports four additional jobs in the UK economy.
Some who are sceptical about the benefits of migration argue that this additional economic output comes at the cost of productivity, that the longer hours worked by migrants create lower marginal returns, reducing overall efficiency.
However, work done by the National Institute of Economic and Social Research suggests that migrant workers boost productivity overall. They are net contributors to the UK economy.
These economic facts bear repeating in the face of ongoing migrant-scepticism. But we must also not forget that the value of migrant workers is not limited to London.
As well as boosting the capital’s economy, income generated by London’s migrant workforce is transforming lives across the globe.
The World Bank estimates that global money transfers, whereby workers in one country send money back to their families or friends overseas, will soon overtake foreign direct investment as the biggest inflow of capital into developing economies.
The $689bn that the World Bank predicts people across the world will send back home this year is almost 10 times more than in 1990 – and is higher than global aid spending.
The World Bank also estimates that, in some countries, the money received will represent a third of the recipient nation’s total GDP. These transactions can be life-changing for those that receive them.
Money earned in the UK often goes further in emerging economies – the salary of a foreign waiter or Uber driver in London might be spent on education or healthcare, or give families back home the ability to buy a home.
Rather than simply acting as a “hand-out”, research from the International Fund for Agricultural Development shows that these remittances create independence and sustainability. They may provide the seed money for small enterprises and family businesses. This money can also generate economic opportunities for women, which would not otherwise exist.
The World Bank also believes that money transfer is encouraging the development of greater financial skills in developing countries, with recipients more likely to own a bank account. And UK fintech expertise has played a huge part in that transformation. What was once a laborious, slow and expensive process to move money across borders and currencies is now simple, quick and low-cost.
Sadly, views on migration are likely to remain diverse and impassioned for years to come. But those of us who value London’s status as a global economic hub will recognise and celebrate migrant workers as the unsung heroes they are, boosting the UK economy, while changing lives with the money they send back home.
Main image credit: Getty
City A.M.’s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.