Immigrants and old folk working longer create jobs for others

A new blog post on Ephems notes that ministers describing the economic benefits of old people working longer before retirement are inadvertently undermining the government’s case for reducing immigration instead of encouraging more.  Please append any comments on this at http://www.barder.com/4506, not in reply to this email. That’s also where you’ll find any comments by others.

The text of the post follows:

It’s not true, although widely thought to be obvious, that when older people work longer before retirement they are adding to youth unempoloyment, or that immigrants take away jobs from native Brits. The first of these myths was efficiently exploded in last weekend’s Financial Times by two government ministers who pointed out that getting a job is not a zero sum game in which every time five people — all over the age of 65, for example — stays on in a job beyond normal retirement age, there are five fewer jobs available for young people coming into the labour market.  That misconception wrongly assumes a fixed number of jobs in the economy, whereas that number is almost infinitely variable.  The two ministers correctly explained that anyone continuing to contribute to the economy beyond the age at which he or she would otherwise have retired is adding to the total sum of economic activity and thus to GDP, and that additional economic activity leads to the creation of more jobs, not fewer.

Today (8.8.2015) the Financial Times publishes a letter from me pointing out that the two ministers’ letter about job creation through delayed retirement inadvertently also makes the economic case for the creation of more jobs through the addition of more immigrants to the workforce, and thus for more immigration, not less — the opposite of Messrs Cameron’s and Osborne’s populist immigration policies, dictated by the Daily Mail and not by the economic and social reality.  The unnecessary human tragedy being enacted at Calais is only one of the malign results.

Here’s my letter in today’s FT:

Sir, Ms Priti Patel, the Minister of State for employment, and her colleague Baroness Altmann, pensions minister, were distinctly brave (in the Yes Minister sense) to make the cogent economic case in your columns for more older people staying in work longer (letters, 1-2 August).  All their impeccable arguments – the fallacy of a fixed number of jobs in the economy; more people working longer, earning and spending more; increased economic activity creating more jobs, not fewer – also support the case for more net immigration to the UK, not less.

They could have added that by paying more tax for longer, older people working longer (and immigrants) help to reduce the budget deficit – without the need to reduce ever more harshly the living standards of the already poor. (I write as a former diplomat, compulsorily and gratefully retired at 60.)

Brian Barder
London SW18, UK
2 August 2015

If such a letter were (improbably) to appear in the Daily Mail or the Sun, it would no doubt be assailed as further evidence of  a retired diplomat being out of touch with the lives of ordinary people. [End of blog post text]

Best wishes from another day of global warming in south London
Brian