June 9, 2023 - 1:00pm
There was a moment when I realised that Nigel Farage, besides the rhetoric, was a different kind of politician from those he derided. It was in the run-up to the 2016 referendum, when he was quizzed about the IMF’s gloomy forecasts if Britain opted to leave the EU. “The IMF has lost its way” Farage intoned, merrily discarding the forecasts of an organisation which, for politicians across the political spectrum, had been beyond reproach. “This is all about the big banks and the establishment protecting their interests within a cosy EU cartel that looks after multinational corporations” he tweeted that same day.
Politically speaking, this was a masterstroke. Most of the electorate doesn’t recall more than a handful of British politicians — something generally lost on Westminster-obsessives. So the idea they would have the slightest idea what the IMF is, or what it stands for, was outlandish. Farage’s dismissal of elite orthodoxy prefigured that phrase which encapsulated why many would soon back Brexit: take back control.
Last week it was the turn of the IMF to address the British public. Speaking to Newsnight, Gita Gopinath, the Fund’s deputy managing director, outlined how higher immigration could reduce price rises. “With inflation as high as it is,” she said, “having workers who can fill shortages in some sectors […] will help in bringing inflation down”.
“But why would higher immigration reduce inflation?” should have been the follow up question from Ben Chu. Had Gopinath chosen candour over evasion she would have replied with something like this: “Because, under certain circumstances, and for certain professions, higher immigration can help depress wages.” Of course, nobody as senior as her at the IMF, or the World Bank, would overtly say that. The recent backlash against Huw Pill, the Bank of England economist who told a podcast that Brits should accept getting poorer, had the force that it did because such honesty is exceptional.
The IMF sees a causal relationship between rising wages and Britain’s inability to get inflation down. We know this because it said so in a report published in May. In that report it upgraded its projections for the UK economy this year from a contraction to growth of 0.4%. This unexpected turn of events, the report detailed, was partly the consequence of energy prices settling down but was also the result of surprisingly robust demand. This demand, in their words, was because of “stronger wage keep-up with inflation”. Workers were doing surprisingly well, often through trade unions and collective action, in not getting too much poorer.
But while Jeremy Hunt used that moment to highlight his success as Chancellor, what wasn’t mentioned was that rising wages — while good for growth — won’t help get inflation under control as rapidly as the Government would like. For that to happen, a small recession would be ideal, but of course no Tory minister would dare say as much.
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Subscribe“So does immigration necessarily lead to falling wages? For graduates and comparatively higher earners not really, but the evidence does indicate that for those without an education beyond secondary school it does. ”
Gosh is the penny dropping!
Tony Benn knew that fifty years ago. But then, fifty years ago the Labour Party had a left- wing that understood that the point of being in politics was to support the interests of working class families.
Next week Aaron discovers that apples might fall to earth.
It might not lead to falling wages for the graduates but it sure makes the house they want to buy more expensive.
Mass immigration lowers prices for elastic commodities – more people means economies of scale for the supermarkets. But it raises prices for inelastic ones like houses where supply can never meet demand.
But it makes their parents’ house worth more so that there’s more equity release available to put them on the housing ladder and, since their parents were fairly elderly already when they were born, more lovely dosh to inherit in their fifties.
Trouble is they had to wait until they were in their fifties to inherit and so missed the boat on having their own kids.
More likely seventies or eighties after 10 years of dementia, alzheimers, care homes, delapidation and trying to set-up the children and grand-children (not forgetting the taxman).
What of those who do not have wealthy parents though ?
Do you prefer the young to succeed through inherited wealth rather than their own talents and efforts ?
I know I don’t.
No, I don’t. That is precisely my point. Perhaps I didn’t make myself clear.
No, I don’t. That is precisely my point. Perhaps I didn’t make myself clear.
Trouble is they had to wait until they were in their fifties to inherit and so missed the boat on having their own kids.
More likely seventies or eighties after 10 years of dementia, alzheimers, care homes, delapidation and trying to set-up the children and grand-children (not forgetting the taxman).
What of those who do not have wealthy parents though ?
Do you prefer the young to succeed through inherited wealth rather than their own talents and efforts ?
I know I don’t.
It never ceases to frustrate that so many of my peers and others with like minds refuse to put two and two together when it comes to house prices and large scale migration. They’re also probably more likely to be anti-mass migration if the visa threshold for permanent visas were increased to say £40k or thereabouts…
I find whenever I speak to friends about this topic, they start off parroting the usual lines but quickly come to agree.
Agree about minimum salary threshold for visa. Also the government needs to ensure foreign students leave the country after they graduate so that the new cohort nets out with the old one.
Those two changes could bring legal net immigration to the 100k ish level overnight.
I find whenever I speak to friends about this topic, they start off parroting the usual lines but quickly come to agree.
Agree about minimum salary threshold for visa. Also the government needs to ensure foreign students leave the country after they graduate so that the new cohort nets out with the old one.
Those two changes could bring legal net immigration to the 100k ish level overnight.
But it makes their parents’ house worth more so that there’s more equity release available to put them on the housing ladder and, since their parents were fairly elderly already when they were born, more lovely dosh to inherit in their fifties.
It never ceases to frustrate that so many of my peers and others with like minds refuse to put two and two together when it comes to house prices and large scale migration. They’re also probably more likely to be anti-mass migration if the visa threshold for permanent visas were increased to say £40k or thereabouts…
It most certainly leads to falling wages for graduates as well. EG: 30% of NHS Drs are immigrants, nearly all from economically poorer countries – and NHS wages are low compared with peer countries. Meanwhile many blue collar wages – the skilled trades – have gone up rather nicely, in many cases overtaking professionals such as lawyers, medics. Moreover, the exporting of jobs in manufacturing, as well as importing of cheap labour alsoo advantages blue collars. So let’s not make another neo-Marxist argument that this all about class – that is false and spreads rancour.
Well said!! I am astonished. There are a set of Terrible Truths that the Progressive New Order since 97 have – thanks to a mendacious Charter-busting propagandist State media – simply excised from public debate. 1. The idea that uncontrolled mass migration of 600,000- 1m a year has zero impact on house price inflation; zero impact on the delivery of health services and in no way not depress and undermine the national labour market. Yea right…. The author seems to have half woken from this groupthinky stupour – and then calls on our trade unions to resolve the matter! Er – they and Labour are hardcore champions of the source of wage suppression: the EU and Global Capitalism’s greatest achievement- the single market. The truth is still censored/blanked out by those simpering cowards in the New Order’s universities and the ghastly Blob. They prefer to bow the knee to the ideal of free movement and globalism than to address reality and so serve the interests of the British people and workers.
“Next week Aaron discovers that apples might fall to earth.” He will probably qualify his answer by adding ‘as long they don’t start to identify as pears as they are falling’.
It might not lead to falling wages for the graduates but it sure makes the house they want to buy more expensive.
Mass immigration lowers prices for elastic commodities – more people means economies of scale for the supermarkets. But it raises prices for inelastic ones like houses where supply can never meet demand.
It most certainly leads to falling wages for graduates as well. EG: 30% of NHS Drs are immigrants, nearly all from economically poorer countries – and NHS wages are low compared with peer countries. Meanwhile many blue collar wages – the skilled trades – have gone up rather nicely, in many cases overtaking professionals such as lawyers, medics. Moreover, the exporting of jobs in manufacturing, as well as importing of cheap labour alsoo advantages blue collars. So let’s not make another neo-Marxist argument that this all about class – that is false and spreads rancour.
Well said!! I am astonished. There are a set of Terrible Truths that the Progressive New Order since 97 have – thanks to a mendacious Charter-busting propagandist State media – simply excised from public debate. 1. The idea that uncontrolled mass migration of 600,000- 1m a year has zero impact on house price inflation; zero impact on the delivery of health services and in no way not depress and undermine the national labour market. Yea right…. The author seems to have half woken from this groupthinky stupour – and then calls on our trade unions to resolve the matter! Er – they and Labour are hardcore champions of the source of wage suppression: the EU and Global Capitalism’s greatest achievement- the single market. The truth is still censored/blanked out by those simpering cowards in the New Order’s universities and the ghastly Blob. They prefer to bow the knee to the ideal of free movement and globalism than to address reality and so serve the interests of the British people and workers.
“Next week Aaron discovers that apples might fall to earth.” He will probably qualify his answer by adding ‘as long they don’t start to identify as pears as they are falling’.
“So does immigration necessarily lead to falling wages? For graduates and comparatively higher earners not really, but the evidence does indicate that for those without an education beyond secondary school it does. ”
Gosh is the penny dropping!
Tony Benn knew that fifty years ago. But then, fifty years ago the Labour Party had a left- wing that understood that the point of being in politics was to support the interests of working class families.
Next week Aaron discovers that apples might fall to earth.
Ah, refugeeeees!
We’re all seeking refuge from something, aren’t we? Some seek a refuge from economies that are underperforming, and poor welfare provision, and religion-inspired compulsory celibacy and patriarchy, and even the war-torn hell that is northern France.
Others seek refuge from overcrowding, depressed wages, rising crime, rape gangs, and the ruination of the economy and services brought about by unfettered migration.
Your last paragraph perfectly describes my views and experience of rhe UK.
Your last paragraph perfectly describes my views and experience of rhe UK.
Ah, refugeeeees!
We’re all seeking refuge from something, aren’t we? Some seek a refuge from economies that are underperforming, and poor welfare provision, and religion-inspired compulsory celibacy and patriarchy, and even the war-torn hell that is northern France.
Others seek refuge from overcrowding, depressed wages, rising crime, rape gangs, and the ruination of the economy and services brought about by unfettered migration.
The BBC recruits from the same elite pool as the Civil Service, both political parties and the entire establishment media. It’s unrealistic to expect the ruling class to promote ideas that might lead to their overthrow. You reformists … I don’t know.
If you happen to be a Native Brit – remember the BBC Hates you.
Everything they say must be taken with that in mind – then you see everything they say suddenly makes sense.
If you happen to be a Native Brit – remember the BBC Hates you.
Everything they say must be taken with that in mind – then you see everything they say suddenly makes sense.
The BBC recruits from the same elite pool as the Civil Service, both political parties and the entire establishment media. It’s unrealistic to expect the ruling class to promote ideas that might lead to their overthrow. You reformists … I don’t know.
With rising labour costs businesses are forced to look for efficiencies and innovations – which then benefits productivity – which acts as a counter to labour costs and inflation. Some of the innovations can themselves be scaled or sold for export.
This is why countries with high labour costs (Scandinavia, Switzerland, Singapore) can also be very successful on the world stage. But it has to be accompanied by a system that encourages and allows innovation and development by trial-and-error to flourish.
With rising labour costs businesses are forced to look for efficiencies and innovations – which then benefits productivity – which acts as a counter to labour costs and inflation. Some of the innovations can themselves be scaled or sold for export.
This is why countries with high labour costs (Scandinavia, Switzerland, Singapore) can also be very successful on the world stage. But it has to be accompanied by a system that encourages and allows innovation and development by trial-and-error to flourish.
It’s almost like the main anti-immigration forces in the UK a century ago were unions and not large corporations.
It’s almost like the main anti-immigration forces in the UK a century ago were unions and not large corporations.
Agree and well said.
Not just the IMF though is it. The Right been quite happy to secretly support policies, incl immigration whilst malignly facing both ways, to suppress wages in many sectors, esp the low paid. Coupled with anti-union legislation, legitimation of zero contract hour contracts, outsourcing to reduce the rights of many of the poorest sector workers, and of course no resolution to social care funding such that a decent wage can be paid. So those latching onto a welcome critique of the IMF have much to ‘check’ themselves on too.
Agreed JW and they couldn’t have done it without the assistance of New Labour, particularly Blair and “civil servants” Gus O’Donnell and Jonathan Portes who made it the new normal. David Milliband was against it, apparently but he was overruled. Oh dear.
Blair left office 16yrs ago AR. How long do you want before suggesting the Right had plenty of time to correct anything it disliked? Immigration last year greater than anything under Blair too, by some considerable way.
You’re pulling heck of a contortion to try and wriggle the Right away from this one.
You’re deflecting yet again (sigh). I’ll say it once more, New Labour created the template for this, of course the economic Right ran away with it, why wouldn’t they. O’Donnell and Portes were too stupid to understand the ramifications of their action, Milliband was certainly aware.
Are you deliberately failing to understand this?
I’ll let you in on a secret AR that has clearly been hidden from you. Tories been in power for 16years. O’Donnell & Portes never been in power.
Biggest spike in immigration after a Govt led by Bojo and with Patel and then Braverman signing the visas. You’ll be telling me they all work for Blair next. Laughable.
.
Are you deliberately
failing to understand
this?
That’ll be a “yes” then.
.
Are you deliberately
failing to understand
this?
That’ll be a “yes” then.
I’ll let you in on a secret AR that has clearly been hidden from you. Tories been in power for 16years. O’Donnell & Portes never been in power.
Biggest spike in immigration after a Govt led by Bojo and with Patel and then Braverman signing the visas. You’ll be telling me they all work for Blair next. Laughable.
You’re deflecting yet again (sigh). I’ll say it once more, New Labour created the template for this, of course the economic Right ran away with it, why wouldn’t they. O’Donnell and Portes were too stupid to understand the ramifications of their action, Milliband was certainly aware.
Are you deliberately failing to understand this?
Blair left office 16yrs ago AR. How long do you want before suggesting the Right had plenty of time to correct anything it disliked? Immigration last year greater than anything under Blair too, by some considerable way.
You’re pulling heck of a contortion to try and wriggle the Right away from this one.
Agreed JW and they couldn’t have done it without the assistance of New Labour, particularly Blair and “civil servants” Gus O’Donnell and Jonathan Portes who made it the new normal. David Milliband was against it, apparently but he was overruled. Oh dear.
Agree and well said.
Not just the IMF though is it. The Right been quite happy to secretly support policies, incl immigration whilst malignly facing both ways, to suppress wages in many sectors, esp the low paid. Coupled with anti-union legislation, legitimation of zero contract hour contracts, outsourcing to reduce the rights of many of the poorest sector workers, and of course no resolution to social care funding such that a decent wage can be paid. So those latching onto a welcome critique of the IMF have much to ‘check’ themselves on too.
In coming years immigrants will continue to erode wages amongst blue collar and AI will start to eviscerate the i cubicle class. And as the Universal Doctor.and Universal Teacher (where generative ai is predicted to have maximum near term impact) I, for one, will be smiling. Couldn’t happen to a nicer bunch of people. A taste of their own medecine just what rhe AI doctor orders.
I am a skilled tradesman, and anyone who thinks that profession is safe from AI has not been in the trades. Modularization is coming fast. Bricks will soon laid by machine, they can do it now, as combine harvesters do their thing, and strawberry picking machines, and egg gathers and sorters in egg farms.
Heat Pumps – outside modular. Plug, unplug – unskilled. Houses are assembled now days – of pre made components – not skilled tradesmen. One skilled man per site, the rest just repeating their semi-skilled drudge task over and over.
Expect flat pack housing assembled mechanically in 15 years.
I am a skilled tradesman, and anyone who thinks that profession is safe from AI has not been in the trades. Modularization is coming fast. Bricks will soon laid by machine, they can do it now, as combine harvesters do their thing, and strawberry picking machines, and egg gathers and sorters in egg farms.
Heat Pumps – outside modular. Plug, unplug – unskilled. Houses are assembled now days – of pre made components – not skilled tradesmen. One skilled man per site, the rest just repeating their semi-skilled drudge task over and over.
Expect flat pack housing assembled mechanically in 15 years.
In coming years immigrants will continue to erode wages amongst blue collar and AI will start to eviscerate the i cubicle class. And as the Universal Doctor.and Universal Teacher (where generative ai is predicted to have maximum near term impact) I, for one, will be smiling. Couldn’t happen to a nicer bunch of people. A taste of their own medecine just what rhe AI doctor orders.
“Trade unions, rather than borders, are the best way to manage the labour supply and guarantee good wages for all.”
There speaks a man who didn’t live through the 1970s and hasn’t done any research on the period.
None of the current growth industries in this country are unionised. That’s just an overhead and nuisance that nobody needs or wants. Unions block innovation and creativity and the creative destruction necessary for a thriving economy.
That and the fact that they did so much to destroy so many industries in the UK in the 60s, 70s and 80s.
The only place unions are strong today is in anything touched by the state. Where productivity and waste are appalling. And people are increasingly redefining their jobs to work on stuff that their customers (not a term that they recognise) not only don’t value but actively do not want.
Class war, unions – just throw these archaic terms in the dustbin of history and move on.
“Trade unions, rather than borders, are the best way to manage the labour supply and guarantee good wages for all.”
There speaks a man who didn’t live through the 1970s and hasn’t done any research on the period.
None of the current growth industries in this country are unionised. That’s just an overhead and nuisance that nobody needs or wants. Unions block innovation and creativity and the creative destruction necessary for a thriving economy.
That and the fact that they did so much to destroy so many industries in the UK in the 60s, 70s and 80s.
The only place unions are strong today is in anything touched by the state. Where productivity and waste are appalling. And people are increasingly redefining their jobs to work on stuff that their customers (not a term that they recognise) not only don’t value but actively do not want.
Class war, unions – just throw these archaic terms in the dustbin of history and move on.
A BBC “journalist” (Ben Chu) not doing his job. No surprise there.
A BBC “journalist” (Ben Chu) not doing his job. No surprise there.
Mr Bastani seems to be conceding that controls around immigration are not the Third Reich. Slowly but, hopefully, surely his brain continues to make advances.
Mr Bastani seems to be conceding that controls around immigration are not the Third Reich. Slowly but, hopefully, surely his brain continues to make advances.