Sometimes, the left hand truly hasn't a clue what the right hand is doing. A case in point seems to be the connections between immigration, employment growth and the pensions crisis in Europe.

Last week, economists at NCB released a provocative report arguing that Ireland would grow by 6 per cent per annum over the coming decade. Its population would increase to four million by 2006 and the active population would rise to more than 2.7 million. The message was strong, very strong: the Irish economy will prove capable of absorbing labour force increases to the order of 40,000 per annum for the foreseeable future. The report provoked a lot of analysis and some counter arguments, notably on the part of Brendan Walsh of UCD. He is worried that our economy cannot, in fact, cope with an extraordinarily strong demand for labour without inflation in wage rates. This argument will only be settled by the actual outcome until then, brilliant economists can differ about what might happen.

On other pages of the newspapers and in social circles other than those of business and finance, people are talking about refugees and asylum seekers.

Politically, the left accuses the Government of unjust, hard-hearted and hypocritical treatment of asylum seekers; the right, or the unthinking right, mutters about drains on the social welfare system from try-on refugees, mere economic migrants. No one's talking economics, and they should be.

If NCB is right, and Ireland can absorb 40,000 additional workers per annum, then we have an opportunity to permit a lot more non-nationals to work here. More than that. Our high-skill economy is going to need constant invigoration from wherever it can get it. We will need skilled foreigners, as well as skilled Irish. This will be in the nature of the industries that will grow here.

Not only that. The growth in employment in well-paid, higher value-added jobs which the unions understandably want for their members and their members' children, is inevitably going to lead to a demand for lower-skilled jobs. There will always be a demand for low-skilled, non-tradable services jobs. There is no such thing as an economy where everyone is a software engineer or a management consultant. In fact, the more success we have at generating high-skilled jobs, the more demand there will be for services which are lower-skilled.

Maybe you think this means letting in some immigrants to be an underclass of poorly-paid domestic servants your Filipino maid, your Mexican gardener. Not at all. It is bad economics and bad social morality to create and rely on a permanent underclass. But that is not the same thing as recognising that we will have a need for unskilled service workers in the future and that demand may exceed the level the Irish workforce will supply.

If we accept more immigrant workers of low skills we must have social mobility. If a low-skilled Albanian comes here, and is allowed take up a low-skilled service job, the key is that he should have the opportunity to grow skills so that, crucially, his children can move up socially and economically.

We are not there yet, but we are getting there.

We have a less rigid labour force than many Continental countries. We can, if we wish, marry aspirations for justice in immigration policy with economic self-interest. Immigration will be a matter for IBEC as much as for the Irish Council for Civil Liberties.

What is required is an immigration policy, not just a mechanical system to process asylum applications. It would be a tiny start to let asylum seekers work while their applications were pending. There should also be a way for people to enter this country without resorting to the asylum application procedure. It should be easier for employers to employ non-nationals. For a picture of a real immigration policy, look at our old nemesis, the US Immigration and Naturalisation Service. At least the US has a systematic, structured way of allowing foreigners into the melting pot. In blunt contrast, the Minister for Justice says that no European country actively seeks migratory workers from outside the EU.

Well, not now, anyway, because major European countries have embarrassingly failed to deliver job mobility and job creation. And this from the same EU countries which face a pensions time bomb because they will not have enough workers to support pensioners in a few years time.

Babies are not social welfare burdens, they are future producers. The same goes for immigrants. Smart finance ministries know this. What about EU justice ministries?

Oliver O'Connor is an investment funds specialist