« A new year's message | Main | Economists in an alienated society »

January 04, 2017

Comments

Feed You can follow this conversation by subscribing to the comment feed for this post.

Anarcho

"Classical liberals have long underplayed the importance and ubiquity of workplace coercion."

Not sure that is right -- look at Locke, for example, he was well aware of the “all these subordinate relations of Wife, Children, Servants, and Slaves”. The idea that working people sold their liberty as well as their labour was part-and-parcel of his ideology. As I discuss here:

http://anarchism.pageabode.com/anarcho/anarchist-organisation-practice-theory-actualised

So they did not "underplay" - either they ignored it (why bother with the proles at all?) or defended it wholeheartedly.

In fact, it is the few "classical liberals" who actually recognised the contradiction which shows this is the case -- John Stuart Mill, most obviously (unsurprisingly, von Mises denounced him as a socialist and personally responsible for the decline of the British economy!) and Herbert Spencer (although he placed resolving this matter -- by market forces! -- way into the future, so hardly counts).

That defending private hierarchies like wage-labour is an obvious contradiction in claims to defend "liberty" goes without saying, but liberalism was developed to justify such "subordinate relations".

From Arse To Elbow

Bloodworth is engaged in constructing a strawman consistent with media norms (hence the nerve-jangling use of "bien pensant"). I doubt there are many liberals who claim that immigration "is all sunshine and rainbows", even if they do reason that the aggregate benefits outweigh the costs.

You'll note he also criticises McCluskey and Coyne of "demagogic electioneering" for "responding to the prevailing mood among Unite members", ignoring that antipathy towards immigrant labour among union members has a long history. There's more continuity here than change.

Bloodworth's piece is just another example of the modish "facts versus feelings" false dichotomy. The flip-side is the belief that members of the "traditional" working class are immune to evidence or reason, and peculiarly vulnerable to the charms of Paul Nuttall, essentially because they are thick. No surprise to see Rob Ford cheering from the sidelines.

Patrick Kirk

Your reply to working class people concerned about the effects of immigration is "Put up with it because immigration helps grow GDP." Whether the GDP growth mainly accrues to the 1% doesn't seem to matter.

I can't see many voting for that.

ejh

Aside from the "bien-pensant" pish, we could really do without the ego of "I will invariably be denounced for writing this article". You don't have top make it abnout you, James, and you don't have to make it about how you're being shouted down by the "bien-pensants". This kind of thing is tiresome in all its forms (e.g. "I know it's not fashionable to say this"). Suppose you just write the piece, James, and let the readers see whether they think it stands up or not.

As far as whether it stands up or not, what is this supposed to prove?

"One big agency plainly informed us on the very first day of a job that there were '70 eastern Europeans waiting' for the work that we were doing."

So what? Did they actually produce these seventy Eastern Europeans at any point? While James was doing this job, were Brits who complained about their lot whisked away while submissive Poles popped up in their places? If not, what does it prove, other than that people in agencies often like to bully and intimidate the people who work for them, as has been true as long as agencies have existed?

Face it, if they could get in a better and cheaper workforce from elsewhere, they would already have done so. James wouldn't have been on their books in the first place. All James' anecdote is, is evidence of threats being made. If he can show us that local labour is in fact being replaced with cheaper labour from overseas, that would be important, but in no way does he do so here.

Blissex

«Who’s going to pay the taxes to pay for border guards?»

That's a red herring: economic immigrants are not like spies that come to the UK with pockets full of cash and their only problem is to slip past the border.

the vast majority of economic immigrants want to find jobs that pay better than in their source country.

Perhaps our blogger has forgotten that all it takes to stop economic immigration is to make sure that employers don't hire them in the target country, legally or in the black economy, that is to enforce existing laws, which is very very easy and cheap if there is political will.

Even so the best way to stop economic immigration is to invest in the source countries creating local jobs there (immigration from Germany or France happens but it is obviously not economic), but obviously property and business owners in the target countries don't benefit from that, so immigration is the issue.

Blissex

«"One big agency plainly informed us on the very first day of a job that there were '70 eastern Europeans waiting' for the work that we were doing."

So what? Did they actually produce these seventy Eastern Europeans at any point?»

flipchartfairytales.wordpress.com/2016/08/17/are-we-prepared-for-post-polish-britain/#comment-26614>
«Anecdotally, in my manufacturing business, we are under no pressure to give any pay rises and have not been so since 2008. We can get as many [overseas] skilled workers as we need within a few days via agencies, though sadly and inevitably, we’ve seen the total collapse of apprenticeships, the local college has closed its vocational courses and the industry training boards have all closed too. Since we no longer train anyone, its axiomatic that we now rely on immigrants to fill factory floor positions.»

stumblingandmumbling.typepad.com/stumbling_and_mumbling/2014/05/the-left-immigration.html?cid=6a00d83451cbef69e201a511c45593970c
«I once had a temp job as receptionist at a factory in Glasgow, a city not famous for its endemic labour shortages. The people on the production line were, to a man and woman, Polish. This was neither coincidence nor a result of open competition against lazy, too-expensive locals: staffing had been outsourced to an agency, guaranteeing the firm so many man hours a week without the risk of building up long-term employment rights to any given worker. A Glaswegian guy came in with his cv one day, and was explicitly turned away because he didn't speak Polish and wouldn't be able to follow instructions on the floor.
The agency rep (also Polish) supplied labour to several other businesses and was not slow to discipline her people for minor infractions of timekeeping or whatever. She was under pressure from both ends - it wasn't just that lost half hours added up to impact her quota, a free hand with summary dismissal also helped make room for the newstarts who arrived every week from Poland and for whom she had to find work.»

And so many other random episodes...

Perhaps reading "This London" by Benjamin Judah would help to understand how the low-income labour market really works in some important areas of the country.

Blissex

«Perhaps our blogger has forgotten that all it takes to stop economic immigration is to make sure that employers don't hire them in the target country, legally or in the black economy,»

As demonstrated by the Calais camps for third world illegal immigrants: why do they risk their life to cross the Channel to come to the UK? After all France is a rich, safe country like the UK, with similar or better low-end wages.

The answer is simple: they know it is much easier to get jobs and hide in the UK than in France because New Labour and Conservative governments don't enforce immigration laws against employers, except for a few show-cases, because their affluent southern middle and upper-middle class voting bases love cheap servants and cheap hired help.

Igor Belanov

In next week's issue Bloodworth flies to China to repatriate all the jobs that emigrated over there.

Blissex

«New Labour and Conservative governments don't enforce immigration laws against employers, except for a few show-cases,»

More precisely: against *low-wage* employers. Anyhow high-wage employers are pretty maniacal as to checking entitlement to work.

Blissex

Anyhow the "money quote" form JamesB's piece is the final one of course:

«but if the people who toil in British factories have no say over the political direction of the country they live and work in, it will invariably create a distorted politics in which the only voters are middle class voters. Universal suffrage will, in practice, no longer exist.»

That's exactly the plan with Conservatives and New Labour: an underclass and working class composed of foreign indentured workers, like in Dubai. The ravenous middle classes of southern England are very pleased with that and cheer on the plantation economy, in which they think will be gentry.

Blissex

«That's exactly the plan with Conservatives and New Labour»

New Labour Work and Pensions secretary J Hutto said some years ago:

www.yorkshirepost.co.uk/news/main-topics/local-stories/crackdown-on-benefits-scroungers-1-2412296
«He said that benefit claimants needed to compete for jobs with migrant workers, many from Eastern Europe. He went on: “We cannot reasonably ask hard-working families to pay for the unwillingness of some to take responsibility to engage in the labour market.”»

Another one said that without the many immigrants working for low-wage jobs in the NHS its labour costs would rise, requiring NHS budget increases funded by politically unacceptable higher taxes on the middle classes.

Bob

"Who’s going to pay the taxes to pay for border guards?"

Nobody. Look, you just make illegal immigrants have no right to anything. A job, open bank account, etc...

Bob

Also if we want to implement a JG or higher basic income that applies to anyone invited in the country then we need immigration controls ("meaner welfare state.")

NNF

Close the borders, stir things up, send in the Christians to bring about character strength, then open up the borders in 20 years.

ejh

"Anecdotally, in my manufacturing business..."

And our evidence turns out to be two totally unverifiable anecdotes from other blog comments. Hall of mirrors stuff.

Blissex

«two totally unverifiable anecdotes from other blog comments»

There must be a lot of commenters on blogs that secretly work for Farage and probably also Putin, spreading fake news by hacking the comment system. :-)

Keith

Unfortunately there is little sign of any main party offering more constructive alternatives to fortress Britain. Blissex may be right about the explanation. Certain classes have things to loose and not a lot to gain. But then people like Hutton cannot be surprised if the voters abandon his party when his party abandons them. Or Miliband either...etc

TheophileEscargot


I love your blog which I've been reading for years.

While your posts usually are skeptical of conventional wisdom, I think one thing you're absolutely conventional on is that competition with immigrants has only a trivial impact on compensation.

There's a standard argument made by well-informed liberals, which goes something like this: "Here is a study of the effect of immigration on wages during the natural experiment when the UK was open to new EU members and France etc were not. Wages only dropped slightly for unskilled workers. Therefore everything is fine."

But one thing even economists know is that wages are STICKY. Workers really, really, really do not like to see their wages fall. The fact that in a growing economy wages fell at all doesn't seem to me to indicate "nothing to see here", they indicate something huge to see here. Given wage stickiness, the effect of competition with immigrants is likely to be long-term wage stagnation, not immediate and obvious wage falls. That's exactly what we've seen, and is much harder to detect statistically.

Moreover there are other factors than just overall wages.

1. Precarity. Immigrants are often willing to accept short-term contracts, zero-hours and more precarious conditions than native-born workers. According to the FT, immigrants have utterly revolutionized our economy this way. Liberals seem to have their own version of Schrodinger's Immigrant: one who utterly transforms our economy by taking previously unacceptable conditions, but doesn't worsen things for native-born workers by doing so.

2. Housing. Immigrants are often single, or support families overseas where the cost of living is cheaper. They therefore only need small or even shared rooms, when a native worker who wants to support a family needs much more space. Immigrants may therefore contribute to the housing crisis, in that employers no longer need to pay wages sufficient for workers to house a family.

3. Wage rise mechanisms. Employers really, really, really do not like to see wages rise. When they're forced to, it's often in response to a shortage of skills in a particular area. With mass immigration of highly mobile workers, there are fewer shortages which could break the mechanism by which wages usually rise.

Overall, I think the conventional wisdom may be greatly underestimating how much competition with the new waves of EU immigrants has harmed native-born workers.

From Arse To Elbow

@Blissex,

Re "the best way to stop economic immigration is to invest in the source countries creating local jobs there". The evidence (not anecdata) suggests the opposite. Investing in a developing economy improves the skills of local workers, making them more marketable abroad, and simultaneously raises incomes, giving skilled workers the wherewithal to mirate to developed economies with higher wages.

Re "why do they risk their life to cross the Channel to come to the UK? After all France is a rich, safe country like the UK, with similar or better low-end wages". Because France has a national ID card scheme and without an ID ('sans papiers') it is very difficult to get a job in the formal economy (perversely, this explains why the French black economy is larger than that of the UK).

On top of this, the UK has weakly enforced laws. The 'right to work' checks by corporates are often outsourced to recruitment agencies who have a conflict of interest, while SMEs often lack the interest and/or skills to properly check. The UK has a reputation as being a relatively easy place to find work (or start a business). Ironically, this "truth" has been amplified over the years by media tales of the state being a "soft touch" and incompetent at securing our borders.

Blissex

«people like Hutton cannot be surprised if the voters abandon his party when his party abandons them.»

People like Hutton are more delighted than surprised by that, because it has happened by them giving up the vote, because "There Is No Alternative". For the neoliberals in any party it is very nice when the lower income servant classes either just stop voting or vote automatically for anybody with a red rosette, even when that anybody is Tristram Hunt or Stephen Twigg, or cannot vote because they are immigrants.

The mandelsonians are rather more terrified of losing the votes of the ravenous rentier middle classes of the south than those of the lower classes:

www.progressonline.org.uk/2011/04/19/purple-and-orange-united-colours-of-coalition/
«Labour is winning votes from disillusioned Lib Dems and its own former supporters who are returning to the fold, but it still has a mountain to climb in the South East, among the aspirational “conservatory-building classes” who were key to its previous election victories.»

www.theweek.co.uk/election-2015/62452/blair-to-the-rescue-but-does-miliband-need-toxic-tony
«“We all know what Tony Blair and Peter Mandelson really think of Ed Miliband,” said Watt. “They think he’s abandoned the essential truth which is that Labour needs to champion the conservatory-building classes»

Blissex

«The evidence (not anecdata) suggests the opposite. Investing in a developing economy improves the skills of local workers, making them more marketable abroad, and simultaneously raises incomes, giving skilled workers the wherewithal to mirate to developed economies with higher wages.»

There is something in that, but it is not a big deal. Many people would rather take a lower salary in their country than migrate, as long as the difference is not huge like 5-10 times as between Romania and UK; consider the small number of slovenian, portoguese or even greek immigrants to the UK, where the difference is 2-3 times and living standards are tolerable. Sure there have been quite a few, but not on the same scale as from the poorest.

Consider also Taiwan or South Korea: massive development, not much outmigration. Sure there has been a bit of migration to the USA of highly educated people, but nowhere like mass. The same for Russia or East Germany post-soviet collapse. Most of them remained.

The trick for rich countries would be to invest in poor countries in production for local consumption with some exports, so rising local living standards motivate people to remain. But that runs directly counter to the goals of business and property owners in the rich countries, who either want:

* masses of immigrants to push down wages and push up rents and reduce the voting power of the low-income classes in the rich countries;

* production in the poor countries for export to the rich countries to reduce employment in the rich countries, especially in unionized industries (in the past of course).

Blissex

«where the difference is 2-3 times and living standards are tolerable»

That's a bit imprecise, and in that imprecision there is an interesting point: the difference has to be looked at both at exchange-rate and at PPP, where in poor countries the PPP wage difference with rich countries is usually much smaller.

Mass migration seems to me to happen when there is opportunity and a large (more than 2-3 times) difference in PPP wages. There is migration also when just the difference in exchange-rate wages is large, as those migrants arbitrage the difference (they earn and save in the target country and then go back and consume in the source country), but usually not mass migration.

Blissex

«France has a national ID card scheme and without an ID ('sans papiers') it is very difficult to get a job in the formal economy»

Spain and Italy have identity cards too and illegal immigrants go there in large numbers...

Focusing on ID cards or border controls means making the same mistake: focusing on stopping the immigrants instead of the reason why they immigrate, that is employers (the "watering hole") giving them jobs.

If employers know they can get away with making much bigger profits hiring illegal immigrants and not really checking their papers, they will, and the immigrants will rush in.

PS there have been a couple of show-cases in the UK where some employers were thrown under the bus for accepting obviously fake papers, but on the whole the UK cash-in-hand or "we are not forgery experts" side of the economy has ballooned with the happy acquiescence of the political authorities.

Blissex

«the happy acquiescence of the political authorities»

Consider as a small part of this all the rentier middle class people who get effort-free tax-free income from renting bunk beds in their sheds or council houses to immigrants cash-in-hand: that breaks several laws, but enforcement is rather sparse, but for the usual show-cases where a few are thrown under the bus for the sake of appearances. Enforcement would be very easy and cheap, given the all-pervasive nature of surveillance in the UK, and the availability of neighbours to snitch, but it would be quite unpopular with the «aspirational “conservatory-building classes”».

And enforcement of "petty" tax-"avoidance" would be quite difficult to square with a "soft-touch" on large scale episodes as in:

www.thetimes.co.uk/edition/news/labour-fears-corbyn-will-be-seen-as-unambitious-3tww86v5n
«Labour MPs have raised concerns that Jeremy Corbyn’s rhetoric on tax avoidance could appear anti-aspiration. A senior shadow cabinet source said the party leader was in danger of overreaching himself in his criticism of David Cameron for investing in Blairmore, the fund set up in an offshore tax haven in the Bahamas by his father Ian.»

We live in an era in which "Labour" MPs reckon that taxing rentiers looks anti-aspiration; that is a measure of the times.

From Arse To Elbow

@Blissex,

Re migration flows, you have consider three things: numbers relative to home population; that congregation can make immigrant groups invisible to much of a country; and that dispersion across multiple destination countries can do likewise.

For example: Slovenia is very small (and Slovenes are routinely mistaken for other nationalities); a 1/4 of the Portuguese in the UK live around Vauxhall and Stockwell; and about 4% of the Greek population have emigrated since 2008 but to a lot of different countries (many with existing congregations), e.g. the US, UK, Germany and Australia.

Taiwan is a special case because of its relationship with the mainland, but Korea has seen plenty of emigration historically, notably to America and Japan. The UK Korean community is another example of "congregational invisibility", with many to be found in New Malden (betwee Wimbledon and Kingston).

After 1989, lots of East Germans "emigrated" to what was the old West Germany. To say that they have remained in (a unified) Germany rather misses the point. As for the Russians, many of them have emigrated but they've preferred to go to Germany (often backfilling "Ossis") and former Soviet republics. Relatively few have made it as far as Kensington.

The point is that we are living in an era of unprecedented mass movement (into cities as much as between countries). This is a global phenomenon caused by rising living standards, falling transport costs and the tendency of technology (which includes learning English) to make skills more transferrable. This process isn't a deliberate conspiracy by capitalists, so much as the working of capital itself, so it cannot be arrested by policy or bought off by Western investment.

Blissex

«we are living in an era of unprecedented mass movement (into cities as much as between countries)»

That relies on a rather narrow view of «era»: there have been mass migrations in less recent decades, from Turkey to Germany, from southern Italy to northern Italy and Switzerland and Germany, from Spain to France and Germany.

The current mass migrations have been as fast and large and those of that era, with 15-25% of the working age population of countries like Poland (large) or Lithuania (small) moving to the UK (and Germany).

But the earlier mass migrations happened while demand was booming, so they were about genuinely extending the labor supply, while the current mass migrations seems aimed at replacing "lazy, uppity, exploitative" native workers instead.

Part of the issue is that those "lazy, uppity, exploitative" native workers want it both ways: no "EU contributions" for investment creating jobs in poor EU countries to keep their workers there, and no immigration to the UK either. This maximalism only plays into the hands of the New Labour and Conservative neoliberals.

Blissex

«For the neoliberals in any party it is very nice when the lower income servant classes either just stop voting»

Ah it occurred to me that there might be a clever aim in this: roughly 40% of those having the right to vote don't vote, and roughly 40% of adults don't own property.

Probably the overlap is not 100%, but my guess that the percentage of property owners among voters is well above the average 60%.

Obviously the voting percentage among affluent southern property speculators should be very high: they know very well that their tax-free effort-free capital gains depend critically on electing a government that represents their interests.

Similarly the percentage of voters among renters and northern property owners should be low: both Conservatives and New Labour have made very clear that they are primarily the parties of southern property speculators.

By offering only a choice between two parties for southern property speculators, one with identity politics and one without, the UK political system has effectively reintroduced a large part of censuary suffrage limited to property owners. Very clever indeed.

I wonder when a proposal will be made to formalize this by giving the right to vote only to those owning property worth at least £200,000. :-(

Jeffrey678

NYT, Dec 13, 2016, Economic Scene, Eduardo Porter

There are almost nine million more jobs than there were at the previous peak
in November 2007, just before the economy tumbled into recession. But
the gains have not been evenly distributed.
Despite accounting for less than 15 percent of the labor force, Hispanics got
more than half of the net additional jobs. Blacks and Asians also gained
millions more jobs than they lost. But whites, who account for 78
percent of the labor force, lost more than 700,000 net jobs over the
nine years.
The racial and ethnic divide is starker among workers in their prime.
Whites ages 25 to 54 lost some 6.5 million jobs more than they gained
over the period. Hispanics in their prime, by contrast, gained some
three million jobs net, Asians 1.5 million and blacks one million
“In every age group,” wrote Lakshman Achuthan of the Economic Cycle Research Institute in a penetrating analysis, “blacks, Hispanics and Asians have more jobs now than they did at the November 2007 high-water mark.”
This lopsided racial sorting of jobs is only one of the fault lines brought to the fore by the presidential election.

The comments to this entry are closed.

Why S&M?

Blog powered by Typepad