It causes two effects - wage rises are suppressed - labour is used instead of capital investment Labour should always be in short supply and 'reassuringly ex

It causes two effects - wage rises are suppressed - labour is used instead of capital investment Labour should always be in short supply and 'reassuringly expensive'. That way there is an incentive to replace it with machinery - which is where productivity and an improved standard of living comes from. If a firm wants to use 'foreigners' then they should build the factory where the foreigners live and repatriate the profits. That way social capital is maintained. We shouldn't judge economic success by how far away from your mum you have to live to get a job.