Don Flynn, the director of the Migrants Rights Network, says the free movement of workers across Europe is not only intrinsically desirable, but has benefited the UK. Nonetheless, the fact that many migrants are employed by industries that adopt a low-pay, low-value business model is cause for concern.
Migrants Rights Network doesn’t expect to be getting involved in the big questions of whether the EU overall has been good or bad for Britain, but we will be setting out our views on one issue that many think lie at the heart of this vexatious question: the right to freedom of movement.
Free movement of capital, goods, services and labour
The many and various treaties which have defined the European project since the 1950s onwards have all converged on the idea that a continent made up of nations working in partnership with one another could only be constructed around the principle of the free movement of the factors of economic production – capital, goods, services and labour. No country that joined in with any aspect of the endeavours to create an economic community that would allow this flow of productive activity could ever have been in any doubt that they were signing up to a process that had the goal of complete freedom of movement as its objective.
How has free movement worked out for us all? There are actually plenty of reasons for being disgruntled about the way the logic of the economic community has segued into the single market of the Maastricht Treaty, and after that into the peculiar beast which increasingly has the Eurozone as its central area of concern. Europe is clearly an unhappy place at this point in time and the consensus right across the political spectrum is that it is in much need of reform.
The EU’s predicament
But to what extent has the right of free movement of citizens contributed to the EU’s current predicament? Is it really the case, as many of the most strident proponents of a vote to leave are proclaiming, as the best and most vital reason for the UK to sever this connection with the rest of the Union?
Their argument hinges on the fact that the recent waves of expansion of EU membership have driven migration between member states to unprecedented high levels. Between 2001 and 2011 the population of the UK grew by three million people with two-thirds of this growth accounted for by positive net migration.
This is a lot of people and pessimists have felt justified in concluding that a negative effect is bound to show up in data about the displacement of native workers in the jobs market, widespread depression of wage levels, and unsustainable competition for public services and resources. In fact, a decade and a half further on shows that this downbeat assessment of what is entailed by large-scale movements of people has not been borne out.
Negative impact? No evidence
Far from provoking depression across the British economy, the prevailing view amongst researchers and analysts is summed by this conclusion set out in a paper produced by the Centre for Economic Performance at the London School of Economics:
There is still no evidence of an overall negative impact of immigration on jobs, wages, housing or the crowding out of public services. Any negative impacts on wages of less skilled groups are small. One of the largest impacts of immigration seems to be on public perceptions. (Immigration and the UK Labour Market, Paper EA019)
This is not to say that all is well within an arrangement between states in which the migration of citizens is driven in large part by wealth imbalances and large differentials between economic performances. In a single market which permits the uninhibited entry and exit of flows of capital seeking the highest rates of return on investment then the right to the movement of people is absolutely essential as a compensatory measure to allow people to get out of the poverty associated with un- and under-employment.
The people doing the moving are from the countries of the former state socialist bloc, whose lengthy period of adjustment to the rigours of market competition still shows up, 25 years after the collapse of the old regime, as harsh disparities in wealth and opportunity. And then there are the young people of Spain, Italy, Portugal, Ireland and Greece – the battered and bruised victims of the austerity measures imposed as a consequence of the sovereign debt crisis.
Productive workers and taxpayers
It is, quite frankly, cruelly wrong to regard the perfectly sensible and even laudable decision of these people to move away from poverty and journey towards regions where they have the chance to participate in the creation of wealth as the prime reason to vote to leave the EU. In making these moves the migrants have done no harm to the places they have migrated to: on the contrary the record shows that the vast majority are rapidly integrated into the labour market where they contribute both as productive workers and as taxpayers.
What ought to be closer to the heart of our discussion about free movement is the way in which the labour of these individuals is being drafted into companies whose operations hinge on plans which have low pay and low value as their business models. Whilst British politicians really have little to complain about when it comes to the effort and energy which migrants bring to the UK, the complaints about workplace unfairness and sheer exploitation that come from those young people who are trying to make their way in a new country certainly needs to be listened to more closely.
MRN is planning a lively intervention in the public debate about staying in or leaving the EU. Whilst leaving it to the informed judgment of voters to decide for themselves whether the UK is in or out, we do intend to counter the charge that any alleged detriment that is supposed to come from the exercise of free movement rights is the central issue of the day. It isn’t, and you can expect to hear a lot more from us on this subject in the weeks to come.
This post first appeared at Migrants Rights Network. It represents the views of the author and not those of the BrexitVote blog, nor the LSE.
Don Flynn is the director of the Migrants Rights Network.
We have a bifurcated economies, now — digital/global vs. non-, the former growing at 5+%pa and the latter if at all at 1% or less. The one once was 10% of the total and now perhaps is 60, the other was 90 and now perhaps is 20.
This gives headaches to central-bankers trying to rule all with a single ring: bank-rates forever have been compromises — trying to keep everyone happy all the time — lots easier task when the extremes at least are merging — very difficult when they diverge, as maybe now.
What most bedevils the deliberations of Mmes. Yellen & Lagarde & their ilk is that their stastitics do not accurately-portray, or even reflect, any of this change, yet — the numbers, like labor statistics & particularly GDP, still are stuck in a 3-tier, management / middle / workers, manufacturing-dominated world, that having disappeared steadily from practice for 50 years or so — both macro & micro, modern hitech & biotech startups no longer operate, or do cost-accounting, the way The Firm did in 1900, and even if “startups” may be counted most old “industrial” companies have made the change too — at least but then very confusingly, for statistics, in-part — now the new Ford no longer is the old Ford Motor, Apple no longer is Apple Computer, GE no longer is General Electric, in either accounting or operations, & neither are military or healthcare government-spending.
Books by Kaletsky & many others now suggest all this, although careful commentators such as Larry Summers warn that consensus-is-not-yet-emerging… So bankers flip coins in the dark, somewhat, hoping that 2%-with-a-smile will satisfy said 1% / 5% new dynamic-balance, temporarily, maybe, at least rather than 3%-with-a-frown… bankers are gamblers — Asimov’s, “The most important words of Science are not ‘Eureka I have found it!’ but “Gee, that’s funny…”, apply to the Dismal Science too.
Headaches for labor policy as well, then, the source of one important set of such out-dated statistics: accompanying this fundamental change in industrial structure — new paradigm — has been a fundamental change in labor force structure —
The pyramids have flattened, as Peter Drucker used to point out, the many layers of Middle Management, which used to administer the too-matured Manufacturing Economy, are gone — in the new Services Economy only two layers remain, Management and an Underclass, the latter indubitably low-pay yes & all these societies can afford to pay then more — currently the former bunch mostly-at-home & now the latter group mostly-overseas.
Most of us have done well, in preparing for this shift: our students all obtain advanced degrees, now, many of those in “management” of some form or another. Nowadays our farmers & officeworkers & bankers & lawyers & chemists & architects & even doctors all have “MBAs” — you’ve met them, in pubs & at cocktails, they’re the boring rich ones who most easily are persuaded to buy the drinks…
The problem is, they won’t sweep floors — & for that we still in fact need the / some migrants… It’s a symbiosis: in rich countries now the rich kids create and design the cars, then-produced overseas by poor kids, which later in rich countries the poor kids drive daily from now-decayed suburbs in to menial jobs in the now-über-rich central cities.
That’s the new model — & those migrants are needed, that’s their essential role, so trying to keep them all out via policy & policing is both counter-productive economically and impossible politically, an articial interference with creative-destruction & the always-cruel invisible-hand…Or so it goes. Stiglitz et al. have made trenchant & much-needed critiques, but that for now remains the new model.
The trouble is — one among several — that the Underclass, in such a bifurcated system, at-home & abroad, currently has less social mobility than it would like. There is some: border-camps at Calais & Lesbos & Ceuta & Tijuana & Chungking all are evidence of the success of some in seeking change and social advancement — even better chance for those fewer numbers able to get themselves over or around the razorwire fences and create the Migrant Problem now festering inside so many longed-for final destinations themselves.
But there is a gulf, in expectations — always the cause of revolutions more than statistically-analyzed-reality, as so many examples have taught us, i.e. the American Revolution, the French — as the Migrant Problem we have now may yet show us again, literally, “How can we keep them down on the farm / back at the village in Turkey, after they’ve seen Paree…”
This has been Piketty’s point, or at least its significance, to many. There is a growing perception of a widening gulf, in expectations, between Management Class and Under-Class — even though statistics may be found, or manipulated, to show otherwise — it’s a political problem, not just economic — migrants to Shanghai from Hunan, or to Paris from Za’atari, may in fact better their prospects, economically & otherwise, by succeeding, but once-arrived their perception of “inequality” may nevertheless grow worse, arguably in their role as 99% to the 1% in Shanghai or Paris… may be less satisfactory to them than that relationship was back home… often it’s the 2d generation, the kids, but then they’re always the source of social change…
It’s why Marx decided, ultimately, that the bourgeoisie was the revolutionary class, not the “happy” or at least “passive” peasant… Or maybe he was wrong, over-thought that, and it’s just the dynamism & sheer luck of the folks who made-it, completed the trek & personal transition successfully, as in US and Australian and other “Migrant” cases…
So yes there’s a Migrant problem, and an Equality problem — but both may prove to be not threats but in fact the best & most-essential things to have happened to us yet — if we respond to them well, carefully & gradually & acceptingly, & not blindly or hysterically.
Hi — corrections to the above — I can’t find how otherwise to edit a posting & get these in… sorry, typing en route & with my thumbs on an iPhone, iOS & tiny screen…
We have bifurcated economies now
but, ‘Gee, that’s funny…’ “,
Anecdotally we have EU migrants working in pretty much every cafe. I doubt anybody born in the UK would have a problem working in a cafe provided the pay was OK (and I’m sure the pay isn’t terrible). But while we have a massive over supply in a lot of the low-skilled areas, employers will always gauge and offer the worst possible pay and conditions. Why would they want to offer Joe Bloggs a proper employment contract when they can employ Jean-Pierre for a few months, and then replace him with Katarina for a few months, and then replace her with Stefania a few months later.
Ideally we would have a government which stops employers from gauging AND bases immigration goals on actual needs rather than the political aims of the EU.