August 4, 2021

One thing among many that makes being a foot soldier on the Left these days a pretty depressing experience is the propensity of colleagues to deny basic realities — or refuse to openly debate inconvenient truths. On no subject has that been more evident than free movement. So far, as much as the Left has been willing to entertain a discussion on this topic, it is usually to present things as a battle between good and evil: those who support free movement the progressive and enlightened ones, those who oppose it reactionary and intolerant.

The rapidity with which support for open borders has gone from being a fringe position to dominant on the British Left ought to be one of the major talking points of politics. It wasn’t so long ago that open borders were championed principally by Trotskyists, anarchists and hyper-liberals. Most mainstream socialists and trade unionists understood that the labour supply was just another market dynamic which, as with all market dynamics, was requiring of regulation, the better to enable governments to plan around employment, welfare, housing and so on.

Nowadays, those of us on the Left who articulate such a position find ourselves in a minority, regularly assailed by colleagues reciting trite slogans such as “Migrants are not to blame!” and “Don’t pander to the racists!”

It is true that such evidence as exists shows the impact of immigration on UK wages overall to be broadly negligible. But this can disguise the more appreciable effects on specific groups of workers and sectors. For example, a 2015 Bank of England study concluded that for every 10 percentage point increase in the proportion of immigrants working in semi-skilled or unskilled jobs, there was a two per cent reduc­tion in pay. And a 2018 review by the government’s Migration Advisory Committee showed that while the effect of immigration on average wages was small, the impact on wage distribution was more significant, with higher-paid workers gaining and the low-paid losing out.

This is to say nothing of the other deleterious effects of open borders, such as the stunting of productivity and deskilling of the domestic workforce. What, we might ask, is the motivation for employers to invest in new technology or train up a local jobseeker when they can get away with bringing in an off-the-peg foreign worker for a pittance?

Yet when it comes to discussing these realities, there is something of a conspiracy of silence within the labour movement, whose leaders have set their face against any suggestion that open borders comes with downsides. Again, boilerplate sloganising has taken the place of reasoned assessment. Low wages are caused by “rip-off bosses”, they argue, and what we therefore need is better regulation and more trade union organisation in the workplace – arguments which, whatever their merits, overlook the inescapable truth that employers will always be under less pressure to pay higher wages the greater the supply of labour available to them.

The more thoughtful will often invoke the “lump of labour fallacy” – an argument that correctly rejects any notion of there being a fixed amount of work in the economy, but goes on to contend that increases in the population, such as those deriving from immigration, inevitably lead to additional economic demand and thus more jobs and greater levels of growth and prosperity. But the British experience would suggest that evidence for the second part of this theory is, to say the least, inconclusive. For example, in his 2015 book, The Costs and Benefits of Large-Scale Immigration, the Cambridge economist Professor Bob Rowthorn explained how a study of the data demonstrated that:

“The extra jobs may not appear immediately and there may be quite a long transition period during which native workers experience unemployment (or lower wages). Moreover, if there is a continuing inflow of migrants, the labour market may be in constant disequi­librium, with economic growth and new job creation lagging constantly behind the growth in labour supply due to immigration. In its extreme form the ‘lump of labour fallacy’ may well be a fallacy, but it points to a genuine issue.”

In recent weeks, we have seen evidence that labour shortages caused in part through a reduction in the pool of EU workers – many of whom have apparently returned home for reasons connected to the pandemic and the Brexit vote – have led to sharp salary increases in some sectors. The recruitment firm, Reed, found that average wages this year have risen by 18% across catering and hospitality, and 10% across retail. These sectors are, of course, renowned for attracting — and often exploiting — migrant workers.

But still there has been no mea culpa from the open borders Left, no recognition that an over-reliance by business on overseas labour has, for some workers at least, demonstrably meant lower wage rates. On the contrary, some have used the recruitment challenges being thrown up by a tighter labour market as an excuse to reassert the case for EU free movement. How dispiriting that the instinct in such circumstances of those called upon to defend the interests of workers is not to harness the opportunity to secure higher wages and better conditions, but instead to defend the right of employers to exploit cheap migrant labour.

I have even heard a small number on the Left make the case that any generous wage increases deriving from a shortage of workers will inevitably mean higher prices for the consumer — precisely the argument that the Tories once employed in opposition to a national minimum wage (and, in fact, the argument that vested interests often employ in response to anything but the most conservative wage claims).

Some commentators who had previously thundered at how Brexit would bring economic disaster have been forced to admit to having been taken by surprise by the reports of salary increases in sectors now denuded of abundant cheap EU labour. But can it really be considered a surprise? Wasn’t it always obvious that where an over-supply of labour existed it was likely to mean — within that locus, at least — downward pressure on wages?

Whose interests have been served by denying this reality? Bosses or workers? The labour movement in Britain would do well to take a lead from the Irish Congress of Trade Unions, which has shown admirable candour on the issue, stating in a submission to the Irish Government over proposed labour market reforms: “It is an iron law of economics that an abundant supply of labour pushes down its cost. It is insulting people’s intelligence to pretend otherwise.”

Working-class voters who supported Brexit have often been depicted as having voted against their own economic interests. But the middle-class, liberal, Remain-voting, graduate types who usually level this charge might wish to look a little closer to home – literally. Estimated data published by the Ministry of Housing, Communities and Local Government suggests that in the 25 years to 2016 – the year of the referendum — house prices increased by around 21% in real terms directly as a consequence of immigration.

In our major cities, where many of these self-identified “progressive” types are roosted — often mortgaged up to their eyeballs or paying exorbitant rental fees — the rise is likely to have been more pronounced. On the face of it, then, the sneering contempt displayed by this cohort seems to have been somewhat misplaced. Aren’t they, in supporting open borders, guilty of precisely that which they have accused others – namely voting against their own economic interests? Has anyone told them? Would they even recognise the contradiction in their case? Might they show a little humility next time they aim their fire at working-class Leave voters, some of whom will now be reaping the benefits of the pay surges caused in part by a reduction in the pool of EU workers in the UK?

Ultimately, a system of free movement between highly-diverse economies is bound to mean traffic moving overwhelmingly in one direction – from the lower-wage zones to the higher-wage. Relatively few Britons will – for the foreseeable future, at least – find themselves travelling to, say, Lithuania or Estonia in pursuit of more attractive wages. One can be in favour of immigration yet believe the challenges presented by free movement to be serious enough to warrant an honest debate.

And while we are inclined to view these challenges through our own lens as a richer country, we should ensure that such a debate focuses, too, on the difficulties free movement creates for lower-wage nations. How many people, for example, know – or even care – about the fact that Romania has experienced a health crisis as a consequence of the departure of thousands of doctors following the country’s accession to the EU, or that Latvia underwent a depopulation emergency in the years after it joined the bloc?

Until now, the debate over free movement has too often been painted in primary colours when, in fact, it should be one of nuance and reason. The recent sudden wage hikes compel all of us – but particularly those who have in the past been too keen to shut down the discussion – to elevate hard-headed and truthful analysis over accusation and cliché. I can’t say I’m hopeful that it will happen.