Extreme Labour Mobility

Sunday, 22nd March 2015

Rethinking the Migration Debate

Were we to debate the ethics of racial prejudice, the relative merits of other societies or the wonders of humanity’s rich cultural diversity, I would not hesitate for a moment both to stand against all forms of xenophobia and to celebrate true cultural diversity. However, as soon as someone suggests the massive recent rise in migratory flows may cause social destabilisation and alienation, some left-branded rhetoricians play the race card. Sometimes the very mention of the word immigrants rather than the now favoured terms, migrants or international commuters, can trigger instant accusations of racism. The UK is no longer the homeland of the English, Scots, Welsh and Irish, but a dyanmic international social engineering experiment. 

The real question is just why the left-leaning cosmopolitan elite are so out of touch with ordinary working class people on the issue of extreme labour mobility and job insecurity. They simply fail to empathise with the very people who until recently they claimed to champion. Interestingly, working class peoples in the most diverse countries all seem to support labour market protection, while the wealthy chattering classes everywhere seem keen to promote labour mobility allowing newcomers to outcompete their local working class. In the first phase of post-WW2 economic growth, from the 1950s to 1980s, the social democratic nation-state model prevailed in most wealthy capitalist countries. The state actively intervened to promote national industries, build skills bases and protect workers against unfair competition from markets with much lower wages. Interestingly, the two Asian industrial superpowers to emerge from the post-WW2 boom, Japan and South Korea, both adopted avowedly protectionist policies at home, while benefiting enormously from European and North American export markets. As Ha-Joon Chang points out in his 2010 book 23 Things They Don’t Tell You About Capitalism: The free market doesn’t exist. Every market has some rules and boundaries that restrict freedom of choice. A market unconditionally accept its underlying restrictions that we fail to see them. How ‘free’ a market is cannot be objectively defined. It is a political definition. The usual claim by free-market economists that they are trying to defend the market from politically motivated interference by the government is false. Government is always involved and those free-marketeers are as politically motivated as anyone. Overcoming the myth that there is such a thing as an objectively defined ‘free market’ is the first step towards understanding capitalism..

In the same short book Professor Chang describes an inconvenient truth of wealthy regions: Wages in rich countries are determined more by immigration control than anything else, including any minimum wage legislation. How is the immigration maximum determined? Not by the ‘free’ labour market, which, if left alone, will end up replacing 80–90 per cent of native workers with cheaper, and often more productive, immigrants. Immigration is largely settled by politics. So, if you have any residual doubt about the massive role that the government plays in the economy’s free market, then pause to reflect that all our wages are, at root, politically determined

Translated into plain English, this means that immigration controls, far from protecting the rich and powerful against the poor, are actually a form of social welfare in an unequal world. Indeed without generous welfare provision, the UK could not first have outsourced most of its manufacturing base, in the Thatcher years, and then allowed an unprecedented influx of unskilled and semi-skilled labour in the New Labour and Tory / Lib Dem coaliation years. Such welfare provision softened the blow when factories closed in 1980s, but also led the emergence of a deskilled new underclass, unable to participate fruitfully in the new service-led economy. Many people are simply not suited to academic, managerial or marketing roles, but are perfectly capable, when given the chance, of doing practical jobs. If an economy does not provide a wide range of employment opportunities for people with different skills and learning profiles, it will exclude a large section of the population.

However, until recently workers in Western Europe, North America and parts of the Pacific Rim (Japan, South Korea, Australia and New Zealand)  were relatively privileged as they could enjoy such luxuries as refrigerators, washing machines, televisions, holidays and most notably motor vehicles unavailable to most in the developing world. As late as 1990 this lifestyle was only available to 15% of the world’s population. We have since witnessed not just the fall of the Iron Curtain with integration of Eastern and Western Europe, but exponential industrial and consumer growth in the world’s two most populous countries, China and India. While back in 1970s some environmentalists feared population growth, itself a by-product of technological progress, represented the biggest environmental challenge, per capita consumption, measured in kilojoules of energy required to sustain a human being, is rising much faster. The critical issue is no longer whether we can feed 10 billion human beings with a modest lifestyle, but whether we can sustain 5 billion cars with all the related infrastructure of motoways and hypermarkets. There is now no logcial reason why a highly educated Indian workforce should not aspire to the same living standards as their European counterparts. While Indian workers still have a huge competitive advantage for the time-being, the rising cost of living, especially in urban areas, may soon change that. As countries open up their markets, the living standards genie pops out of its proverbial bottle. Why should British workers, who today make few goods other countries really need, continue to enjoy higher living standards than Indian, Chinese or African workers, who arguably produce much more of what we need ? Back in 1970s only a tiny minority of Indians were wealthier than typical Western Europeans. Today India’s emerging middle class accounts for over 10% of its population or 130 million people, a larger market than Germany or France. The top three wealthiest UK residents all hail from countries, until recently considered poor, Sri and Gopi Hinduja, (Indian: £11.9 billion), Alisher Usmanov (Russian: £10.65 billion), Lakshmi Mittal (Indian: £10.25 billion).

The new global elite has representatives in every geocultural region of the world. Chinese, Arabic, Russian, Brazilian, Mexican and even Nigerian billionaires are now in the same league as their North Amercian, European and Japanese counterparts. Their global enterprises prefer to negotiate either directly with transnational organisations like the European Union (NAFTA, Mercosur, ASEAN etc.) or with small malleable national microstates like Singapore or Luxembourg, especially if they can legally dodge taxes. Not surprisingly the big 4 global professional services firms (Deloite, PwC, Ernst and Young and KPMG) started life as tax consultants helping their coporate clients to evade national taxes, but have recently diversified into lobbying and naked promotion of globalist policies, often hiding behind environmental and humanitarian campaigns. International big business loathes large viable nation states able to protect labour markets, impose higher corporation standards and enforce strict environmental standards. It much prefers regional trading blocs as a stepping stone to a global government. With the Chinese economy destined to overtake the US economy within 10 to 15 years and India destined to surpass the UK within 5 years, we may wonder what kind of welfare and workers’ rights a future global government may protect.

Let us briefly consider the logic of free movement of labour, one of the foundation stones of the European Union’s 1992 Maastricht Treaty. When first introduced, the gap between the poorest regions of the EU and the richest were not much greater than those within some of the larger members states, e.g. in 1995 Lombardy enjoyed a mean standard of living comparable with that in the Netherlands, Southeast England or Sweden. It just became a little easier for migrants from poorer Italian regions to consider Northern European destinations for temporary relocation rather than apply for guest worker status. However, for cultural reasons, most workers still preferred to move to other regions of their country or linguistic region to being set at a distinct disadvantage. In the 1990s Spain and Italy began to feel the impact of growing migratory pressure from Africa and the Middle East, while the Balkan wars helped boost emigration to Germany, Austria and Scandinavia. As the birth rate fell in most of Europe to below natural replacement level, many academics and business lobbyists began to advocate higher levels of net migration to offset a natural population decline and rejuvenate an ageing population. It seemed as long as most natives continued to enjoy the same career prospects and migration inflows remained manageable, wealthy European countries could absorb more immigrants. However, elsewhere in much of the developing world, we have seen divergent demographic trends with birth-rates still way above replacement level and a steady drift away from traditional rural communities to sprawling megalopolises. For many third world citizens, the transition from a small rural backwater to a teeming 21st century metropolis such as Lagos, Istanbul or Mumbai presents a greater culture shock, than the geographically much longer flight to Frankurt, Chicago or London. Once uprooted from traditions passed down and gradually adapted from generation to generation, it takes only a little leap of faith to risk one's life for a comfortable existence European or American urban setting. Globalisation has not only deskilled relatively well paid of European factory workers, it has driven hundreds of millions off the land to overcrowded cities with limited prospects other than  other than begging, theft, drug trafficking or prostitution. The last 20 years have seen three clear trends:

  1. Long-distance travel via air, sea, rail and road has become much more accessible to hundreds of millions in developing countries.
  2. A telecommunications revolution has made it much easier for people not only to stay in touch with friends and relatives anywhere in the world, but to become aware of job opportunities. Communities are no longer constrained by geography.
  3. Trade barriers have almost disappeared, making it very hard for Western European workers to compete with low wage economies in China, Indonesia, India, Vietnam or elsewhere.

The pace of social, cultural and technological change has accelerated since the late 1990s. While this rapid rate of innovation has benefited some smart entrepreneurs and technical wizards, it has destabilised the labour market. Many old skills become obsolete overnight, unskilled and semi-skilled workers can be hired and fired more easily and employers can tap into an almost unlimited supply of enthusiastic and ready trained labour from some other region. Poorer regions lose their best and brightest and survive mainly on remittances from richer regions, and the poor in richer regions are out-competed by opportunists from poorer regions. Wealthy professionals in richer regions enjoy more affordable and dependable nannies, gardeners and plumbers, while the indigenous poor are consigned to an intellectual wasteland of welfare handouts, budget supermarkets and mass-marketed junk culture.

Ungreen Greens

Why should your electric kettle be assembled by a Chinese worker earning 20p ( £0.20) an hour rather than by a British worker earning £20 an hour ? It's a good question because the demand for electric kettles for making tea, instant coffee or soup is strongest in the British Isles. Demand in the UK alone is certainly large to warrant more than one kettle factory. Indeed until recently, this quintessentially British invention was a nice little export earner (mainly to Australia and Canada). Not any more, leading British brands, such as Russell Hobbs or Murphy Richards, simply have their designs manufactured in low wage regions. A new generation of Britons is more concerned with brands, price and convenience than supporting local workers. Some may argue that we are so busy providing media, marketing, education and entertainment services to the rest of the world, that it makes sense to help other countries grow their economies by making the things we buy in retail parks or online. Indeed as our manufacturing techniques had changed, it made perfect sense for big business to transition to a new type of high-income service economy. The only flaw in that optimistic analysis is that excluded over 50% of young people who didn't go to university and had been failed by a one-size-fits-all comprehensive education system. Nowadays very few affordable electrical appliances are made in the UK. Hoover pulled out of Cumbernauld in 2003. Only three years later Lexmark closed their laser printer plant in Rosyth. Yet all the while the UK retail sector, with a brief slump in 2008-9, has continued to bloom. People travel more on holiday and buy more gadgets, while the UK population has risen by 5 million since the year 2000. However, the country's carbon emissions have remained static despite ambitious government promises of a 20% reduction by 2010. Yet in reality, the country's true carbon footprint has risen dramatically as we simply consume and import more junk that have to be shipped thousands of miles to reach our warehouses. It may be cheaper to import kettles from Indonesia, Malaysia or Vietnam, but in addition to the pollution created by the manufacturing process, we have the environmental burden of shipping the goods over longer distances. Deceptively lower retail prices have another oft-forgotten side effect. It is now often cheaper to buy a new domestic appliance than attempt to repair an existing one, simply because compatible spare parts have to sourced from remote manufacturers and local retailers lack the skills needed to service parts that are not designed to be easily replaced. If your kettle only costs £20, why spend £20 to replace a faulty thermostat? As a result our landfill sites are replete with discarded appliances with just one faulty component. Globalisation, rather than spreading environmental burdens and maximising efficiency, leads to monumental waste, not only in terms of hyperconsumption (by things we really do not need), but also destroying the prospects of millions of potential workers, out-competed by power-hungry global corporations. If we cared about the environment, we would buy fewer manufactured goods made by well-paid workers with spare parts we can buy in a local hardware store.

A country of Immigrants?

Wishful thinking sociologists proclaim that we have always been a country of immigration. In theory, this statement is true to varying extents of any country outside of Africa's Rift Valley, but should only really apply to countries whose populations are made up mainly of successive waves of recent immigrants such as the United States, Canada, Brazil, Argentina or Australia. Ironically, such multiethnic countries were also built on large-scale population displacement and genocide. Australian aborigines did not invite Dutch and British colonisers to cope with a temporary skills shortage. In truth, before the expansion of the British Empire, these islands experienced only a trickle of migrants from continental Europe. The Norman invasion added 1-2% to the country's blood pool and Anglo-Saxon incursions possibly as little as 5% (Stephen Oppenheimer, Origins of The British). As late 1990, over 75% of the British population descended from the original settlers who moved to these Isles from various ice age refuges between ten and eight thousand years ago. In the imperial age, especially following the Industrial revolution, Britain became mainly a country of emigration with a few groups such as Huguenots and Russian Jews moving to the UK in the 19th century. Most continental European countries experienced greater migratory flows for simple reasons of geography. From the 1950s, Britain experienced the first large waves of immigration from its former colonies. The country was no longer populated almost exclusively by pale-skinned descendants of Celtic, Germanic and Pictish tribes. As the British had colonised much of Africa, the Indian Subcontinent, Caribbean and Oceania, this seemed only right and proper, especially as a many English, Scots and Welsh continued to emigrate to Australia, Canada, New Zealand, South Africa and the United States. Between 1950 and 1997, net migration fluctuated between -20,000 amd +50,000 a year. The UK's population grew gradually from around 50 million in 1950 to 56 million in 1980, covering the first era of mass immigration from the Commonwealth and the 1960s baby boom. In much of the 1970s and early 1980s Britain experienced negative net migration and a declining birth rate. These changes gave rise to a new multiethnic British identity as newcomers integrated and intermarried with longer-standing Britons, but Britishness itself was in crisis often associated with national supremacist groups like the BNP (British National Party) or National Front. In an increasingly interconnected world, the United Kingdom became an anachronism only temporarily rebranded as Cool Britannia, largely due to the commercial success of UK-based rock bands promoting the country's new multicultural image. Britain attempted to capitalise on its image as the birthplace of the English language and industrial revolution, but became a victim of the successful spread of its two leading cultural and economic exports. Its former engineering and scientific excellence had long been eclipsed first by the USA, Germany and Japan and more recenly by global corporations with no national allegiance. The expansion of an English-like global lingua franca and the enduring reputation of a few leading universities seemed the only consolation prizes from the country's imperial past.

However, UK support for US military interventions and the blurring of cultural boundaries between nation states destroyed a rebranded Yookay. Despite the popularity of the English language, UK entries to the Eurovision Song Contest failed to win the hearts and minds of young audiences elsewhere in Europe, while until the 1990s British Rock stars had gained a godlike status abroad. Younger Brits preferred to identify as English, Scottish, Welsh or Irish.  By the late 1990s, the economy has depended mainly on abstract financial, education,  Since 2000 net migration has varied between 150,000 and 300,000 a year. In 2014 over 625,000 moved to the UK by legal means, and around 330,000 left. Not only only are these figures unbalanced but very different kinds of people are moving in either direction. The problem is not, bloody mmigrants, but a global economic system that is clearly unsustainable and works against the interests of the most vulnerable members of our communities.