Immigration: the wrong battle

Jeremy Corbyn is being criticized for claiming that immigration cuts wages. I suspect his critics are right, if not quite for the reasons some of them might think.

Corbyn said he wanted to

prevent] employers being able to import cheap agency labour to undercut existing pay and conditions in the name of free market orthodoxy.

One can read this not as a call for immigration controls but for restrictions on employment agencies.

Such a reading, however, doesn’t exonerate Corbyn.

For one thing, social pressure and market forces have already reined in bad agencies. Transline – the supplier of labour to Amazon and Sports Direct memorably described by James Bloodworth in Hired – lost those contracts and went into administration last year.

And for another, he must have known that statement would be read as a claim about immigration.

And it’s here that he’s wrong.

It is the case that immigration does reduce the wages of some unskilled workers. But the effect is puny. As Jonathan Portes has said:

Immigration may have some, small, negative impact on wages for some low-paid workers.  But the idea that immigration is the main or even a moderately important driver of low pay is simply not supported by the available evidence.

And this small downwards pressure on the lower end of wages is offset by upward effects upon higher wages. Net, immigration is not bad for the economy.

Now, Corbyn’s centrist critics will stop here. But they shouldn’t. It’s here that my complaint with him begins.

In one sense, politicians are like generals; one of their great skills is to choose the terrain on which to fight their battles. And in these words, Corbyn is shifting the battle to the wrong field. He is, in Gramsci’s words, taking a wrong move in the war of position.

What he should be doing is to argue that wages are being depressed not by immigration but by fiscal austerity and by dysfunctional capitalism: stagnant productivity; financialization (pdf), power-biased technical change; deunionization and so on*.

Even the slightest talk of immigration shifts the agenda against this. It moves the political battle onto the terrain that capitalists and Tories want it to be on. They want to distract us from the failures and injustices of austerity and (neoliberal?) capitalism by scapegoating immigrants.

The more we talk about immigration, the less we talk about capitalism. Labour cannot win a battle on this terrain. Once you concede that immigration depresses wages, you are allowing the right to offer tougher and more credible policies to combat it than you can. And you are distracting people from the real reasons why wages are low - reasons that Labour has some policies to combat.

Labour’s attitude to immigration should be much the same as its attitude to government borrowing: it should be silent about it because it doesn’t matter. In fairness to Corbyn, one of his great achievements in last year’s general election was to do just this.  

The right, of course, already has a massive advantage in choosing the terrain; the right-wing press sets the agenda and the BBC follows. Labour therefore needs to be very careful not to add to this advantage. In this sense, Corbyn has failed.

* I’m not saying Corbyn should use these exact words. Another of the great skills of a successful politician is to translate technical economic language into words that resonate more with people.

Comments

[TickyW]

Very wise advice. Let's hope Corbyn and co take it.

[bob hope]

you are completely wrong in your understanding of what Corbyn said, and actively helping the right against immigration. Corbyn has pointed out that Immigrants who work for low wages, can be used as a bargaining tool by employers, to drive down wages. By not defending his position, you allow it to be undermined.

[e]

Read as a claim about immigration: sure and he no doubt knew who would shout the loudest and dissemble with greatest authority. Way back when Nick Clegg debated Farage and lost his credibility convincingly, that's when it should have become obvious to our most able that St. EU wasn't necessarily going to pull through. That's when an ability to criticise, and an approach showing the way forward from a critical position needed to be developed in order to win that bloody referendum. Great shame JC was so isolated in his efforts, but here we are. And still our now little big guns can't bring themselves to reassess. I just don't recognise the terrain you speak of Chris, where “even the slightest talk” is problematic. The terrain I travel, have been travelling 30 -40 years in the cheap seats and outside party political structures. It is an us, which is immigrants and indigenous alike.

[Baker]

Wage rates may not go down with immigration, but the effect of large scale immigration into the UK has been upward pressure on house prices and rents.

Hence the average person’s disposable income has declined, which is effectively the same as a wage cut – less spending power.

[Dipper]

Well if wage rates do not go down with immigration and immigration is good for the economy then this is absolutely marvellous news. Never mind FOM in the EU, lets have FOM over the entire planet! Absolutely everyone can come here safe in the knowlegde that there will be jobs galore, wages will not go down, and we will have an absolutely booming economy.

Have I missed something?

[Daniel]

I agree Labour should be silent about the negative effects of immigration on the economy (whish as you say is false and used as right wing propoganda) but what about issues such as immigrant rights? Should the labour party being talking about Yarls Wood for example.

[Nanikore]

I would not be so sure about the adverse effects of very high rates of inward labour flows on certain sectors of the population. As a Marxian you would understand that it comes down to issues of dependence. What very large labour flows of certain workers can do is create a dependence on them. It is like very dependencies on foreign capital or goods. Portes is a classic Neo-classical -neo-liberal. Just as Neo-Classical theory asserts, he believes that international labour, goods and capital flows create interdependence. Basically you get win win outcomes, such as gains from trade. However, the incentive to train up workers and maintain them with long term contracts is most certainly reduced if there is an infinitely elastic supply of labour, which is pretty much what we had when we had unprecedented numbers entering the UK, virtually uninhibited after the eastward expansion of the EU. Moreover, I would suspect that anthropologists and sociologists who have done the actual fieldwork would have very different things to say about the effects of immigration than Portes, a key architect of New-Labour policy.

Further, one thing he and Wren Lewis often says is that anti-immigrants are more concentrated in areas where there are no immigrants. This (as far as it is true - and it is not completely true) is because the incentive to relocate which impacts on labour mobility within the UK. People who want to move from Grimsby to London to find jobs face, in addition to increased competition, higher rents. What we are seeing is the actually the reverse: native Londoners moving to Kent and Essex. No surprise that these areas are very strongly anti-immigration.

The priority for immigration should be on meeting our moral commitments and international obligations for refugees. We need to start to have a hard look at the consequences of very liberal international labour flows, as we have now started to do with international capital movements.

NK.

[Rich]

To her credit Diane Abbott is talking about Yarls Wood: https://www.theguardian.com/uk-news/2018/feb/23/yarls-wood-women-feel-desperate-says-diane-abbott

[Dave Timoney]

It isn't entirely clear from Corbyn's speech (for which he can be criticised), so my interpretation could be wrong, but I think the words "import cheap agency labour" refer to the EU Posted Workers Directive. In other words, Corbyn isn't objecting to UK employment agencies who hire migrant labour but to the use of agencies in other EU countries to staff positions within the UK.

While the directive ensures that posted workers receive the statutory employment protections of the host country (i.e. where the work is done), it does not require that the employment terms of the job match those that may have been agreed at a sector level domestically between employers and unions. This is where the concern over "undercutting" comes in.

I think the idea that Corbyn is claiming that immigration drives down wages is wide of the mark. Insofar as he is positioning, it is in providing reassurance to the unions that any trade deal with the EU negotiated by Labour would address their concerns in this area. This was a speech to the Scottish Labour Party after all, not an interview with the Daily Mail.

[Dipper]

"It isn't entirely clear from Corbyn's speech"

Well that could be said about anything The Great Fraud says. I think he was saying that in as much as immigration is a good thing he is all for it, but when its a bad thing he is against it.

[Dipper]

The sanctimonious and hypocritical nature of much of the left's stance on immigration is a disgrace. It is irresponsible politics at its worst.

There are many millions, upwards of 100,000,000, who if they were given the opportunity of moving from their current country to here would take it. They all have great humanitarian claims about what a better life they would have. It isn't possible to take them all, so you have to draw a line, and that line, wherever you draw it, will be arbitrary and cause considerable distress, and rest assured wherever that line is the Dianne Abbotts of this world will be demanding you move it. Where is their line? what are their criteria for entry? would they have a deportation policy? They never say.

[Jacques René Giguère]

In Québec a slaughter house announced that it would recruit from Mauritius. Canada doesn't suffer from austerity, unemployment is at an historic low with participation rate also at an historic high.
So: no charging customers the value of the product and no investment in technology. Immigration is clearly a tool to prevent wages from rising and even worse garanteeing a low productivity future.

[GrueBleen]

"Immigration may have some, small, negative impact on wages..."

Would you be so kind as to ask M. Portes whether it does or it doesn't - what does "may" mean here. That Portes, and presumably you, are too lazy to find out if it does have an effect.

And also, how "small" ? And how "small" does an effect have to be to loom large and possibly distressing to "some low-paid workers" ? How low-paid ? How many of them ?

Surely these are just obvious questions ?

[Noah Carl]

I wrote a post a while ago which assembles several different kinds of evidence that immigration does lower native wages:

http://posnetres.blogspot.co.uk/2015/10/immigration-does-lower-native-wages_25.html

Also, if it did not, why would big businesses lobby so intensely for higher immigration:

http://posnetres.blogspot.co.uk/2016/03/us-farm-lobby-calls-for-higher.html

[Dipper]

"Yet many [Road Haulage Companies] are using eastern European drivers to keep pay low. "

written by well-known Brexiteer and Thatcherite Polly Toynbee in that pro-Brexit newspaper The Guardian.

https://www.theguardian.com/commentisfree/2016/aug/02/industrial-failure-uk-lorry-trade-truck-driver-squalor-low-pay-no-unions

[Ben Philliskirk]

"I wrote a post a while ago which assembles several different kinds of evidence that immigration does lower native wages....

Also, if it did not, why would big businesses lobby so intensely for higher immigration"

With more skilled labour, I think the issue isn't so much lower wages as an unwillingness on the part of both government and business to actually take on the cost of training staff and planning medium and long-term recruitment. As a result, it has been much easier for them to cherry-pick workers from abroad.

The problem with this is that it has led to immigration becoming such a major political issue that is discussed in a way that ignores the cause and focuses on the symptoms, therefore stigmatising unfortunate immigrants who are not to blame for the situation.

[Jim Bliss]

You wrote...

"Corbyn said he wanted to

prevent] employers being able to import cheap agency labour to undercut existing pay and conditions in the name of free market orthodoxy."

Problem is... that's far from the only thing he's said on the issue. He's also complained about "cheap labour from Central Europe imported wholesale" and "destroying conditions for British workers".

We can parse that carefully and try and paint it in the best light possible... but to be blunt, I'm not sure I have the stomach for that. Because I know there's a hell of a lot of people who are reading it as "immigrants are stealing your jobs mate!" Whatever semantic hoops we decide to leap through in a bid to give him the benefit of the doubt, most won't bother and will hear a very specific message.

Even as all the dogs around the conference centre inexplicably start howling.

I've had Corbyn supporters insist he's "always been on the side of immigrants". Which is probably why his sudden ambivalence -- just when immigrants in the UK most need a strong, unwavering voice in politics -- seems like such a heinous betrayal in my eyes.

I completely agree with the fundamental arguments in your post by the way (how immigration is a terrible distraction from the more pressing issues of capitalist exploitation and rank inequality). I just think I probably have a significantly harsher assessment of Corbyn's statements about immigration than most. I think he's doing it deliberately to court xenophobic votes. And I find that reprehensible.

Which led to a long, rambling and borderline unreadable diatribe...

http://too-many-characters-for-twitter.numero57.net/2018/03/11/twitter-debate-jeremy-corbyn-fan/

(it's just raw opinion from a guy whose been on heavy steroids for several days to combat a virus... so probably only worth clicking if you're suffering insomnia and have already finished with the small-print on your breakfast-cereal box)

[e]

@ Jim Bliss: Please, do remember the real enemy: The Tories currently holding court and tapping into our latent willingness to blame the other. A willingness, when push comes to shove, that afflicts us all. Are you saying JC is doing as our rabid right-wing does? Isn't he just highlighting there are other ways of controlling our woes?

[Person_XYZ]

Your post is absolutely spot on. Whatever effect immigration has on wages, austerity absolutely dominates the effect. Watching Corbyn fans tell us what Corbyn >really< meant is like watching Trump fans do the same.

[Jim Bliss]

@e I absolutely agree there's a huge difference between most of Corbyn's policies and most Tory policies. I bristle at the notion that a criticism of Corbyn's faults contains even a mild implication of support for tories.

Quite the opposite when my primary criticism is that he sounds too much like the tories when it comes to immigration. That's the problem. And -- as someone who spent most of their life as an immigrant; some of it in the UK; and is married to an immigrant -- it's a pretty big problem in my view.

Also at this point in history, living here in Ireland, I very much see "the enemy" as anyone pushing policies that risk undermining the peace process here. And right now; Corbyn's Brexit does not appear significantly less likely to do that than May's.

[e]

@ Jim Bliss: Well we're in agreement. For my part I've lived with, confronted at home, on my doorstep, and within my community that seam of raciest nastiness that we all know and hate. It was/is (literally at times) fought back into its box. And you'll know I'm sure, that's not always easy. Anyway, the point being the EU is important: but for me its not as important, at every turn, as the fight to retain a society worthy of having a role in international relations. Should our rabid right-wing 'win' their desired Brexit – or even seem too – I fear just that. Criticise policy stances yes, but please, don't kid yourself: JC is this and JC is that... its all just fuel for Labour will ruin our empire.

[nicholas ford]

I simply do not see how Chris can contend that increasing the supply of labour- for a given stock of capital and land etc. can do anything other than reduce wages. That the marginal productivity of labour declines as more labour is added has been in text books for the last hundred years.
In other articles Chris advocates govt should cause there to be more investment, so that the capital stock per worker will increase, and so wages will increase. If Chris thinks capital stock per worker is important for wages in the context of adding capital, why does he not think changes in the capital stock per worker that result from adding labour are important?
Most likely Chris's conclusions come not from clear economic analysis but from ideological and wishful thinking. Chris is in favour of immigration because of the benefits it brings to immigrants (a not ignoble point of view), and it appears he is prepared to ignore hard headed analysis about the likely impact on wages to promote this cause.

[GrueBleen]

To Noah Carl (above).

In your linked post (Immigration does lower native wages ) you say, inter alia, that "...immigrants are not a single, homogeneous mass".

Absolutely right, Noah. Now let me add that as an Australian, I note that lots of immigrants take up jobs that other citizens do not want (which is even more pronounced in the USA than in Australia). And I can assure you that any number of domestic aids, fruit pickers etc has absolutely zero impact on the wages of almost every other Australian.

They do not lower the wages of Uber drivers, they do not lower the wages of doctors, they do not lower the wages of tradies. In fact, if the general statistics for Australia are to be believed, despite a migrant intake of 245,000 for the year to June 2017 (1% of the Australian population), Australian wages grew by 1.9% in the same period. Disappointing, but still a rise, not a fall. Formal unemployment is approximately 5.8%

Ok, some some wage falls can be included in that 1.9% which might otherwise have been higher, but which jobs are involved ? Most assuredly not all of them. So when you talk about immigrants lowering native wages, perhaps you could be accurate enough to specify which immigrants and whose wages you're talking about.

Incidentally, the number of immigrants to Britain was about the same number as to Australia in 2016/17. The percentage of foreign born residents is 8.3% in Britain, 12.3% in the USA, 19.3% in Canada and 23% in Australian (of which a very significant number are of British and NZ origin). And just for another bit of prize-winning trivia, did you know that there are more American borns in Australia than Australian borns in America and that Australia is the only country in the world, apparently, for which that is true.

Oh, the unpredictable vagaries of emigration.

[nicholas ford]

To GrueBleen, above.
The argument that immigrants take jobs that native workers do not want is also made in the UK. Its misleading. What should be said is that they take jobs that local workers do not want 'at the prevailing wage rate'. In the UK there are not enough nanny's, cleaners, food factory workers etc at the prevailing wage rate, so employers want more labour brought into the country. The alternative would be for wages to rise, until supply and demand for this labour was brought back into balance at a higher wage rate. Bringing in extra labour from abroad keeps down the wages of the native born people who would otherwise do this work at the higher wage rate.

[Davis X. Machina]

Another of the great skills of a successful politician is to translate technical economic language into words that resonate more with people."

"And the words that resonate more with people"?

We have a winner:

"The wogs start at Calais."

[Seth Edenbaum]

Non union carpenters' wages, 2000 to now. Ny wages in NYC. FLAT or DOWN. What about London? Yes immigration cuts wages. It has positive effects *in the aggregate* which is all economists care about. Displacement means nothing. The emotional well being of workers means nothing.

London 2016. Iraqi Kurdish hotel desk clerk, 15 years in UK. Makes half what he used to. "Eastern European immigrants. it's how capital works" He shrugged. He didn't blame them.

Stop lying to yourself in the name of well-meaning liberalism

[GrueBleen]

To Nicholas Ford above

No Nicholas, they take jobs that locals don't want. Sure, if fruit pickers were paid at the same rate as doctors or lawyers, there'd be quite a few locals who might want the job. But they are not.

However, as an Australian I'm familiar with several versions of 'importing' workers: for instance the 'blackbirding' era when tens of thousands of Pacific Islanders were taken to Australia to work on plantations in Queensland, often by force or trickery. We don't do that any more, now we have an annual influx of backpackers who will also work for near slave wages because they don't know about, and mostly can't read, Australia's IR laws. Lots of those backpapckers are British, of course.

There is also the (in)famous Australian 457 (temporary) visa in which workers can be imported in quite largish numbers to work at wage rates lower than locals. Some are even Indians working in ICT jobs. But you see, none of them are immigrants - though 457 visa holders have historically had a fairly easy path into citizenship (being toughened somewhat now). There's generally somewhat around 180,000 active 457 visa workers at any given time.

And I also recall the numbers of Afghan camel drivers (and their camels) who were instrumental in making the telegraph link across the desert into Western Australia (and that is why Australia is only the second region in the world with a large wild camel population. We also hold annual camel races). Also, the Chinese and Indian labourers who did a lot of the pick and shovel work buillding Australia's railway lines of which few became immigrants - mostly 'repatriated').

Nonetheless, out of Australia's quarter million actual accredited immigrants per annum, quite a few will take jobs that the locals don't want - usually as unskilled cleaners or maybe shift workers in small factories and so on. Some even as sex workers (sure some locals do that but not nearly as many as once upon a time). Generally again, because they have no understanding of Australia's IR laws and do know know their rights and entitlements, they are mercilessly exploited, frequently by their own ethic group (I'm sure that happens in Britain too, doesn't it).

So all I'm saying is that if you want to talk about the effects of immigrants, you have to be clear which immigrants (and their target employment) you are talking about. And also make sure you can clearly distinguish between the effects of immigrants and the effects of quite large numbers of usually very seriously exploited temporary workers (as also in the USA).

[Dipper]

"they take jobs that locals don't want"

and that working tax credits with marginal rates of taxation of over 90%, sometimes effective marginal rates of over 100%, make not financially worthwhile for native residents.