Ed Miliband fielded a question from hell at last Saturday’s Fabian New Year Conference. ‘Could it be true that London regional has instructed activists not to talk about the economy because it’s not one of our strong points?’ asked a delegate. Ed didn’t blink, but his body language betrayed the fact that the latest regeneration of Malcolm Tucker would shortly be dispatched to monster some overzealous strategist at the Brewer’s Green HQ.
True or not, the micromanagement of election campaigning fits with an increasing perception that all of our political parties are obsessed with PR, polls and focus groups. Tail wags dog doesn’t do it justice. Weirdly disembodied tail is more like it. If you want to understand the issue of mass disengagement with politics this ‘weather vane not signpost’ charge is perhaps not a bad place to start.
Whistling past the economy is one thing, but it’s important that the main parties don’t rein in activists on the subject of immigration just because it doesn’t poll well. Politics can’t leave it to the Pub Landlord to call time on Ukip.
First, some numbers. According to David Charter’s book Europe: In or Out, an average of 170,000 long-term migrants from the new EU member states came to the UK each year between 2004 and 2011. Expectations, based on independent research, were for between 5,000 and 13,000 per year. So that’s 20 or so years’ worth of forecast migration occurring every year. For a number of years. All of the arguments about the benefits of migration are at least challenged in the short term with that volume of people arriving. It’s not racist to be concerned about this.
There are, however, examples of the successful integration of this level of migration, notably Israel’s accommodation of over 700,000 Russian émigrés during the 1990s. Unemployment for native Israelis fell over this time.
As Philippe Legrain points out in his excellent book Immigrants: Your Country Needs Them, in an increasingly service-oriented economy it’s not unreasonable to think of the pool of relatively low-skilled, low cost EU labour as of much of a boon to rich economies as the lower cost goods that a free trade area provides. This augments the benefits of diversity arguments – look at the success of Hollywood, Silicon Valley and Premiership football teams, for example – and answers the ‘what have immigrants ever done for us?’ question.
To see what happens to the service economy when you avoid migration or restrict it to high-skill workers, go out for a meal in Japan and look at the bill. Japan has long closed its borders to immigration yet is hardly a poster child for a successful economy, in recent decades at least.
To illustrate some of the benefits of immigration let’s look at a real life example: employment at an Amazon fulfilment centre. I hesitate to use Amazon because it gets a lot of hackles up over its tax and working practices but it’s a fast growing, large employer and it’s difficult to deny that, from a consumer perspective, it delivers goods at lower cost. Lower costs are just as much a part of our standard of living equation as higher wages.
From a British-born worker’s perspective, Amazon offers tough jobs at around the living wage. Its growth means that it generates a decent number of jobs for both British workers and EU and other migrants, so the ‘coming over here, taking our jobs’ argument (a subject that requires its own blog) is not so easy at Amazon. From an EU migrant perspective, Amazon offers tough jobs at around three times the minimum wage in eastern European countries. Working hard for £8 per hour is one thing. Working hard for a domestic equivalent of £19.50 per hour (3 times our minimum wage) is another. EU workers obviously have to pay UK living costs while working here but live frugally, do some overtime and live near Easyjet airport links to eastern Europe and it suddenly becomes a good deal. Lots of EU migrants seem to agree. We get Amazon-level pricing to factor into our cost of living – something that will become even more important when they move into essential goods like food – and migrants get a deal that’s difficult to match back home.
A key question is whether Amazon could meet its hiring requirements exclusively from British-born workers. The demanding productivity targets – that translate into lower consumer costs – mean that the relative attractiveness of the wage is important. In practice, Amazon relies heavily on migrant workers. Spend a day as a shift manager at Amazon and you’ll find it difficult to cast migrants as lazy benefit tourists.
As for benefit tourism, I have to say that I don’t buy it. I don’t buy it in the sense that I doubt that a significant proportion of migrants come to the UK with the ambition of living off benefits forever. Relocating to another country is a daunting prospect. You need va va voom, ambition, to want a better life. The real advantage to a migrant moving from a low income area comes at the margin, when they earn enough to put some money aside. That means hurdling higher UK living costs.
The Amazon example illustrates that low-skilled migrant workers offer an opportunity to tackle one side of the cost-of-living crisis – costs – through jobs that migrants themselves regard as far from exploitative. The further benefits of belonging to the EU lives to fight another blog but immigration via open borders and the pros and cons of EU membership are obviously entwined.
Another consideration is that an abundant source of low-skilled, low-cost workers is an important factor in freeing women to work and encouraging gender equality in the workplace. This symbiosis of low-skilled and higher-skilled jobs applies more broadly too. There is obviously a debate to be had though, over the fairness of usually female migrant au pairs and nannies supporting their richer counterparts. I’ll start to address this theme in my Saturday blog this week, a review of Nicholas Kristof and Sheryl WuDunn’s book Half the Sky.
Thursday, 22nd January 2015