Immigration: A Brief Insight

The subject of immigration generated much controversy when it was debated in Advanced Economics earlier this week; I therefore thought I would compose a blog post to highlight some of the concerns that were elevated during the discussion.

            Evidently, UK headlines are littered with varying viewpoints on immigration, some state that native brits are ‘hardening’ to immigration whereas others argue that politicians are ignoring the strong emotions the public seemingly have over the touchy subject, at their peril.  However, with 57% of our population viewing immigration as one of the three foremost concerns facing the country and 17% viewing it as a personal threat, it is certainly not a subject that can be overlooked.

            In my opinion, immigration imposes a threat on local public services, such as the overloaded NHS and nearby schools.  Yet, immigration does hold many benefits on a macro level.  Indeed, a higher proportion of migrants in the UK have had a tertiary education and more than 75% are employed; with the average age being 31 and many returning to their native countries before their fiscally draining retirement years, it may be interpreted that the income tax and VAT generated from the average 9 year stay is crucial for the UK’s budget position.   In fact, immigrants play a role in easing the debt burden that currently hangs over the UK.  If this financial strain was spread over native brits alone it is estimated that this debt would account for about £28, 650 per person.  However, when immigrants are included the amount per person decreases to £21, 800.  Immigrants certainly are not a quick fix for the UK’s debt burden but they do play a role in lessening the financial strain.

            Of course, this does not account for the half a million illegal immigrants, who currently leach of the system or refugees/asylum seekers. However, it is not the NHS’ job to police patients and some may see it as morally wrong to deny refugees or asylum seekers of treatment if needed.  Quite clearly there are issues revolving around welfare provision, merely by residency individuals qualify for these public services and this is what makes the UK an attractive country to migrate to.  Perhaps, if other countries implemented similar welfare systems, the UK’s immigrations levels would slump.

            There are benefits and consequences of immigration and here I have only covered the minutia of this considerable debate.  From an economic perspective, an increasing labour supply is vastly positive.  However, with UKIP growing in popularity, it is clear that the UK government will have to tackle the concern of migration. 

Mr. Shaun Taylor : "From 150k to 150million in 15 years"

On Friday 21st March, the Epsom College Economics and Enterprise society hosted a lecture from Mr. Shaun Taylor.  The lecture was thoroughly enjoyed by the society and wider members of the college.  He discussed the development of his business HiFX and telescoped attention onto the key characteristics that are necessary for success in the competitive business industry.

HiFx is a UK-based foreign exchange money broker, that provides foreign exchange and international money transfer services.  This service is used by the general public and large corporations.  For example, if an individual were to purchase a holiday home in Spain, they may use HiFX in order to convert their pounds into euros  make their payment.

Mr. Taylor shed light on the reason behind his business success, stating that it was due to his ability to provide better rates than the commercial banks.  However, despite his business not being a social enterprise, his approach to business was overtly ethical and his future business plans for his pension scheme continue to uphold this ethos. His passion and drive was very inspiring.

The lecture was also very informative and would have been particularly relatable to those currently studying AS Economics, since we have just grasped the topic of foreign exchange.  

I'm sure that the stress Mr Taylor placed on the importance of being passionate, driven and confident will benefit everyone who listened to the talk.  Even if they do not desire a career in this industry.

Diane Coyle educates us on the History of GDP

On Thursday 6^th March, students of the Epsom College Economics and Enterprise Society travelled to the acclaimed Eton College, where we were educated on the measurement of economic and social progress by Diane Coyle OBE. Mrs Coyle is a freelance economist and author of the newly published GDP: A Brief but Affectionate History. Her talk consisted primarily about the shortcomings of GDP as a measurement of economic and social growth; she brought to our attention the extent of unrecorded economic activity including the informal and intangible economy. For example, the disregard of housework: if we included housework in GDP, our economy may be nearly double the size, however the government discount it on the grounds that it’s too difficult to record. The second half of her talk consisted of possible alternatives to GDP, which included Human Development Index, Happiness, or measuring what is important to the population. What fascinated me the most was the measurement of happiness. She noted that in Bhutan, instead of calculating GDP, the government measure Gross National Happiness (it’s even illegal to mention GDP). This evaluation of happiness is an attempt to unveil the quality of life using not only economic terms, but psychological terms, which seems only fitting – social welfare should be accounted for when assessing the extent to success of an economy. A booming economy with an unhappy population may not represent full potential or achievement. Ultimately, Diane’s conclusions that we should measure economic activity (GDP), social welfare, and sustainability were thoroughly convincing, and has certainly made me think more about the social and psychological sides of economics.

The Financial Crisis: Lessons Learnt

Mr Phizackerley’s talk focused mainly on the Global Financial Crisis of 2008, explaining in detail - yet in understandable terms – the causes and events of the Crisis and how it connected to the current European Crisis.  This was of particular interest as it was useful in making connections to current economic problems today, such as high unemployment rates in Spain. He also touched upon the system of banks, their different sectors and how they work- again offering understandable and useful knowledge to those who attended. For those of us who were perhaps slightly too young to understand fully the reasons and consequences of the financial crisis, it was helpful in establishing an understanding of how “greed and fear” can cause so much damage. It was astonishing to see through his graphs how quickly the situation deteriorated, particularly in the housing market. Mr Phizackerley’s talk was also useful in demonstrating the different sectors that economics is needed for in banking, and therefore offering potential job ideas that were perhaps unexplored before. When answering questions at the end, especially with regards to the term “banker bashers”, he helped by offering firsthand experience that, although banking did have its downsides, he still believed it to be one of the most exciting jobs out there today. Overall, Mr Phizackerley’s talk offered us a greater knowledge of a crisis that beforehand we were perhaps vaguely aware of, but now fully understood its causes and consequences that are still occurring today.  His personal experience could be used by students to see potential careers, and as a whole was thoroughly interesting.

Microsoft`s new CEO

On February 4^th, Microsoft introduced their third ever CEO Satya Nadella (46), who was born in India, Hyderabad and has degrees in electronics, computer science and business administration. Being internally recruited, having joined the company 22 years ago (he previously ran Microsoft`s Cloud and Enterprise group), he is certainly familiar with the business, which will enable him to put his ideas into practice very soon.

He replaces Steve Ballmer the prior chief executive of Microsoft (2000-2014), a decision which in my opinion was already overdue, as Microsoft struggled to progress with new innovations and failed to keep up with rivals such as Amazon, Apple and Google.

Compared to Ballmer, who was very extrovert and outgoing, Nadella is more introverted and has both a calmer and more considerate approach. In addition, he has the ability to connect people and to understand the dynamics between them through collaboration and is able to inspire and motivate with his authenticity in a seemingly effortless way.

Still, it might seem quite surprising that he was chosen to be the new chief executive, because there were hundreds of suitable competitors, like former Nokia CEO Stephen Elop, who undoubtedly has more entrepreneurial skill.

Moreover Nadella`s main weakness is, that he has never led a company before and does not have as much of an understanding of business compared to Ballmer. This increases the likelihood, that both Ballmer and Gates, the latter having resigned from being a chairman to move to a technological advisor role, would affect and maybe even restrict Nadella in his decision making process.

On the other hand Microsoft`s new CEO has a broadly developed skill set and can definitely rely on his proficient grasp of technical know-how. Furthermore Nadella understands how Microsoft must evolve in order to compete in the modern world; he also understands that the company has to continue to push many of its older, still profitable businesses forward.              

In conclusion, it will be interesting to see in which new directions and to what extent he will independently lead Microsoft in the future, and whether we will see a more similar company to Bill Gates` time and what revolutionary innovations we can expect from him.