What big business wants from high immigration, and what we want.

This post was written by Reuben on April 17, 2011
Posted Under: Uncategorized

When it comes to the discussion about immigration, both its advocates and its opponents tend to display a certain contempt for the working class. Last week Cameron lamented the consequences of high immigration, and blamed the phenomenon on the British welfare system. British workers, he argued had become addicted to welfare, in turn forcing British firms to look abroad. It is unfortunate that, in making this case, he was echoing some of the arguments that get made by what we consider to be the liberal left. As I have noted in the past, the Guardian and the Independent have sometimes made the case for immigration but telling us how “useless” or “revolting” low skilled British workers are.

Indeed, as distasteful as Cameron’s remarks were, the case being made for immigration by Cable and the business lobby is not that much more appealing. Cable’s approach is that immigration is necessary to fill gaps in the labour market. This line of argument is frequently echoed by business. Robert Peston recently alerted us to the complaints of leading British industrialists who argued that the pool of talent in Britain alone is not wide or deep enough.

It is indeed rather galling to hear that migrants are desperately needed to fill gaps in the labour market, while 2.5 million of our citizens are without work. Of course there can be a mismatch between the skills that people have, and the skills that businesses require, and of course, as Chris Dillow recently argued, labour is not completely mobile: “An unemployed council workerin Swansea”, he writes, ” cannot easily become a plumber in London or fruit-picker in Lincolnshire.” Yet the discussion ought not to end there. First of all, people’s abilities are not completely immutable. People can be trained and retrained, and the businesses that have benefitted the most from the upturning and remoulding of the British economy over the preceding decades to be prepared to shoulder some of the costs. Secondly, it is not completely crazy to suggest that Britain should seek to direct its economic activity towards the kind of skills that people have.

This modern globalised economy in which we live is characterised by uncertainty and constant change. Patterns of comparative advantage can rapidly shift, and developments elsewhere can – if things are left to the market – very suddenly make whole sectors of the economy inviable. This is what we saw in the 80s. For business, mass migration can be a means of transferring these risks onto the working class. Workers whose skills are now the “wrong” skills can simply be dispensed with. There is no incentive to retrain and reskill, when those with the “right” skills can simply be cherry picked from across the globe. Equally, the kind of activity in which businesses engage can be determined only by what can be sold most profitably, without reference to what the existing labour force is best able to produce. The scrap heap piles up, and piles up some more.

If this looks like a call to limit migration, it is not. But what I am saying is that a defence of migration cannot simply be a defence of the status quo. We need to push for the kind of society and the kind of economy in which migration genuinely works to the benefit of all concerned. Because right now, the picture is not as rosy as some on the liberal left seem to complacently believe. In response to Cameron’s speech, Mehdi Hassan – senior political editor at the New Statesman – made a spirited defence of immigrtation. In doing so, he boasted of a Low Pay Commission report which, he said, found that immigration increased the average waes of non-immigrant workers.

The report itself did indeed discover that immigration was increasing the “average” wage. Yet it also found that while immigration was associated with “significantly positive wage effects around the middle of the distribution”, it also had “clearly negative wage effects at the lower end of the distribution”. In other words it was associated with increasing inequality. There is no necessary reason why immigration should have such an impact. As with any other phenomenon, the impact of migration is dependent upon the social and economic circumstances in which it takes place. With, for example, stronger unions and better labour laws (ours anti-union legislation is amongst the most restrictive in the developed world), wages for the worst off need not simply a matter of supply and demand. But unless we are prepared to put forward such an alternative, then we might as well hold our peace.

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To contact Reuben email reuben@thethirdestate.net


Reader Comments

This article depresses me on too many levels. 1) All this nonsense about “skills” is buying into a whole lot of government rhetoric that has justified the abolition of the education of people in anything transformative. 2) “We need to push for the kind of society and the kind of economy in which migration genuinely works to the benefit of all concerned.” Do you really believe that keeping people in wage labour ever benefits all concerned? Holy shit, I’m a skilled proletarian who can now get a job on a living wage instead of being on benefits. Whoop-de-fucking-doo.

Written By Jacob on April 17th, 2011 @ 10:25 pm

Actually mate, I think that being on a living wage as opposed to being on benefits makes a really big difference. When you see the impact of long term unemployment on people who get the idea into their head that all they can do is make do within the benefits system, and the difference that makes when people are able to earn their own money, and spend it on what they want with no lingering guilt, that’s really important. I have no desire to side with this Coalition tough love nonsense that “this is all for the good of the poor really”, but instead I think we have to make more of an effort to prevent long term unemployment in the first place.

Written By Mike on April 17th, 2011 @ 10:53 pm

Jacob: ““We need to push for the kind of society and the kind of economy in which migration genuinely works to the benefit of all concerned.” Do you really believe that keeping people in wage labour ever benefits all concerned? Holy shit, I’m a skilled proletarian who can now get a job on a living wage instead of being on benefits. Whoop-de-fucking-doo.”

What a stupid criticism of this article. Believe or not, people have quite a lot of living to do before the day when wage labour is abolished – and I am pretty certain they might perceive a difference between benefits and a living wage.

Written By Reuben Bard-Rosenberg on April 17th, 2011 @ 10:54 pm

Does the “we” in the title include the immigrants themselves?

Agree that some of the liberal/left arguments in defence of immigration are weak and agree that a defence of migration should not just be a defence of the status quo, but how about acknowledging that immigration is and has been a normal part of human existence for thousands of years?

Written By DavidR on April 17th, 2011 @ 10:59 pm

The we refers to the political left in Britain, including immigrants

Written By Reuben Bard-Rosenberg on April 17th, 2011 @ 11:01 pm

In the limit I am against all immigration laws. If people want to come to Britain let them. Whether or not this has an effect on wages of the lowest earning sections of society is immaterial to me to the general principle – let the people come.

One recalls that it was immigration rules that prevented the Jewish community in Germany and elsewhere fleeing the Nazis and having a safe haven elsewhere in an unrestricted fashion. If the cost of a more open border policy is lower wages for “the working class” then so be it; it is a cost that I feel all people who care about humanity should be prepared to pay.

Written By Mikey on April 17th, 2011 @ 11:19 pm
jonathan colwill

Whats the carrying capacity of the uk without cheap fossil fuels Id guess 10-30 million we now have near 70, mikey read the book camp of the saints you will hate it, most likely you will find it incredibly racist but it brings up some good points .
Basically I don’t think any of you people get it or where we stand today, oil production looks to have peaked in 2005 and you guys seem to imagine it’s 1950 .
In a few years your going to have starvation in this country and you people talk about increasing the uk population.

Written By jonathan colwill on April 18th, 2011 @ 10:45 am

I haven’t seen any hard facts about the optimum population of the UK once the oil starts tailing off, and that’s surely more of an argument for a more vigorous energy efficiency and diversification drive than an argument for limiting immigration (people will consume oil wherever they are, and I have no problem with them doing it in an energy-efficient Britain).

Also, I think it’s worth pointing out that the agriculturally advanced countries of Europe and North America are more resilient than more marginal countries, partly because we can afford to carry on using fossil fuels for longer, but also because we have a greater supportive infrastructure to keep our agriculture going

Written By Mike on April 18th, 2011 @ 12:43 pm

Our, or at least my, commitment is not to increasing the uk population, but to free movement of people. I simply don’t recognise the right of governments to controll who is or isn’t in the country they govern. In the case of the uk, which exhibits some of the greatest eccentricities of neo liberal economics, you may well be correct that in the not too distant future our* economy will be royally fucked. This does not, however, vindicate you social darwinist fantasies. You are not the only person who “gets it” you arrogant little shit, you are the only person round here who doesn’t challenge the idea that capital do whatever it likes for short term gain and then turn round and tell, by your e recto estimate, 40-60 million people that they are not needed anymore and should just go and die or emigrate, presumably to a country also containing nationalistic little thugs like you. If you have any concept of internationalism, and any concept that economies should function in order to produce the means for peoples existence (which in fairness is the one thing you do seem to have, if from a psychopathic malthusian perpective), then the idea of controlling uk borders to keep out everyone but the domestic staff needed by our ruling classes should seem repulsive and monumentally stupid.

*That is, the economy we are unavoidably tied to.

Written By Micke on April 18th, 2011 @ 2:23 pm

I thought this was an excellent point Reubs:

“For business, mass migration can be a means of transferring these risks onto the working class. Workers whose skills are now the “wrong” skills can simply be dispensed with. There is no incentive to retrain and reskill, when those with the “right” skills can simply be cherry picked from across the globe.”

It really shows how the labour market is very much governed by the choices of big business and the government – and indeed the very fact that the direction of the market is a choice to be taken by people in power, as opposed to some kind of natural and unstoppable phenomenon. I think this is very much a power which can be used to the benefit of working people in the UK (or, as Reuben has pointed out, currently not-working people).

I think it is extremely important to recognise the contribution that economic migrants, in particular from the A8 accession have made to the UK economy in recent years. There is an excellent IPPR report on this subject which suggests that many employers do compare these workers favourably with “home grown” candidates, but, like Reuben I see this as reflecting well on migrant workers, and poorly on what successive governments have done for the working classes in the UK.

This isn’t an argument about immigration, so much as it is about how the government ought to be directing our economy to bring skilled labour back into it and benefit people who want to work in fulfilling jobs.

This has been highlighted for me recently by the debate surrounding UK offshore wind (bear with me!): A large number of offshore wind farms are going to be built in the UK in the next 10 years or so. They need to be built mostly near depressed northern and eastern port towns. At present we don’t have the capacity and skills in this country to build them, and without the correct Government investment we will benefit from the cheap, clean electricity, but not the regeneration for failing local economies that it could bring about. The manufacturing jobs will go to Norway and Denmark.

I entirely disagree with Jacob that “wage labour” always has to be depressing – many people in my boss’ constituency were really proud to work in manufacturing at Ford, until those jobs went overseas. They would have been prouder still if their union had been strong enough to negotiate better pay and pension deals as Reuben mentioned, which is another matter that needs addressing in this country, but I digress. Whether wage labour is depressing and unsatisfying depends on the size of the wage and the nature of the labour surely Jacob? Not everyone wants to spend their life writing incomprehensible essays about Adorno ;)

As I see it the government has the ability to recreate that kind of pride and skill in the UK economy – if it is willing to step in and direct the future of investment in the UK.

Fortunately due to a massive campaign in which my boss was a key player, the Treasury has agreed to continue investing in the necessary infrastructure to ensure that UK wind farms are built in the UK. This has involved a small amount of pump-priming to major industrial players like Mitsubishi, Siemens and GE (£60m in total)- but in exchange as many as 40,000 jobs could be created in parts of the UK where sustainable new local economies are desperately necessary. It also comes in conjunction with a big push from the UK renewables and construction industries on training UK students in the new construction skills needed to participate in this challenge.

This is not to say, as Reuben has pointed out, that if we had a better trained, better equipped UK workforce, with more job opportunities that there would be no place for migrant workers in our economy. It is simply to say that we cannot accept that our workforce has no place in the kind of industries we as a country *choose* to invest in. If the Treasury want the benefit of these “wealth creators” they must make sure that everyone profits from them – including the working classes.

Written By Rhona on April 19th, 2011 @ 5:44 pm

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