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| Fleeing economic and social miseries of home countries |
The economics of the Channel migrant crisis
are quite clear, being basically about supply, demand and regulatory
failures. They also shed light on the potential solutions, though they
will take time to materialize.
The supply of migrants to Europe is fueled
by waves of people fleeing the economic and social misery of their home
countries — and, in some case, political oppression, persecution and
violence.
They do so in hopes of a better future for themselves and
their children. The temptation for some to try and make it all the way
to the U.K., often after a perilous sea crossing and a fraught trip
through western Europe, is amplified by the attractiveness of an economy
with low unemployment, comprehensive social services and a country
where many already know the language.
Although the supply of migrants has
increased, the demand for migrant labour has gone the other way. Tougher
laws have made it harder and more dangerous for employers to hire
undocumented workers. And with a European unemployment rate of more than
10 per cent, the demand is further damped.
This imbalance in supply and demand isn't
one that can be sorted out by the markets' normal equilibrating
mechanism. The market-clearing wage — that is, the price that would
lower the migration incentive while facilitating the absorption of those
still inclined to risk life and limb — is well below the minimum wage
prevailing in Europe; and any meaningful reduction in the wage would
involve significant and unacceptable social disruptions to local
populations in Europe.
Read more: The economics behind Europe’s migrant crisis: MIGRANTS
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