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August 11, 2006

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The Pedant-General

"If so, Polly shouldn't be moaning about immigration, but about all international trade."

Doesn't she do that as well anyway?

angry economist

Plus another factor is increasing economic activity rates in the UK - i.e. more people actively seeking work or in work.

Increasing activity means a larger pool of potential employees. This actually affects the unemployment measure - driving it up - and has been occurring alongside an increase in total employment.

Piyush

Given that we now have a 'services' economy, isn't the free trade in labour ( and not just goods) also an aspect you need to consider and isn't that effectively what Polly's point is ?
It needs Polish plumbers to move over here to drive down the cost of plumbing services - it doesn't happen by free trade in pipes and fittings.

Sam

I see Piyush has beaten me to it, athough I was going to point at what is probably one of the fastest-growing labour-intensive industries in the developed West - personal care for old people.

It's not especially skilled, it's really difficult to mechanise, and the market demographic is growing. And you can't import the service without importing the people (unless, of course, we set up retirement homes in rural Poland. It would be amusing to see the export of old people in the balance of trade figures...

chris

The existence of non-tradeable services like personal care violates one of the assumptions of the HOS theory. The question is how important this is.
Put it this way. If imports of cheap clothing put UK textile workers out of jobs, these might retrain as care workers. If so, they'll put downward pressure on care home wages. So even though care home services aren't tradeable, they're still vulnerable to the pressures of international trade.

dearieme

If we are off-shoring chav jobs, why don't we off-shore chavs? Let them go to foreign football games and then refuse them re-entry.

Phil

So are you saying immigration policy in and of itself doesn't have any effect on wages? The government doesn't seem to think so, if Patrick Wintour's right:

"Ministers have in the past defended migrant numbers, arguing an open society is a thriving society and saying they have helped keep wage inflation down."

http://politics.guardian.co.uk/homeaffairs/story/0,,1842992,00.html

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