One clear reason is economic: Mass low-wage migration depresses wages, especially on the lower rungs of the labor market. Progressives would do well to come to grips with this reality, even as the Trumpians would be wise neither to overstep their mandate nor to limit their policy to showy and polarizing deportation actions.

To see why, it’s worth examining the history. Between 1965 and 1995, the share of Americans who favored lower immigration rates rose to 65%, up from a third. The shift in attitudes corresponded with a dramatic rise in low-skilled legal — and especially illegal — immigration. Migrant encounters at the US-Mexico border reached 1.64 million in 2000, more than double the rate in 1980 (the 2000 peak would be surpassed under Team Biden).

Mass illicit immigration was and continues to be a feature of the neoliberal model that first took hold in the Seventies. The neoliberal order establishes the primacy of the market over state and society by promoting the free flow of goods, capital, and, crucially, people (that last element is often omitted by progressive critics of neoliberalism). Unsurprisingly, the decade that saw the highest volume of illegal immigration was the Nineties — an era of unfettered globalization, deregulation, and free trade epitomized by the North American Free Trade Agreement.

Nafta facilitated the exploitation of cheap labor south of the border by outsourcing manufacturing jobs to Mexico. The agreement was also devastating for Mexican small farmers, who couldn’t compete with subsidized US agriculture. The resulting mass of indigent farmers migrated largely north into the open arms of American agribiz—the same force responsible for ruining their livelihoods. In 1990, the share of illegal farm workers in the United States was just 12%. By the turn of the millennium, it was about half, where it has remained since.

Until the 2010s, many Democrats embraced a comparatively hard line on illegal immigration, in keeping with the party’s working-class base. In his 1995 State of the Union address, President Bill Clinton lamented how “the jobs [illegal immigrants] hold might otherwise be held by citizens or legal immigrants”.

Back then, it was free-market Republicans like Ronald Reagan who celebrated the exploitation of illicit labor in jobs “Americans won’t do”. Never mind that these jobs were overwhelmingly occupied by Americans prior to the arrival of millions of illicit workers. Never mind, too, that native-born workers still form the majority of the workforce in sectors with large numbers of illegal employees, such as construction, household labor, dry cleaning, and landscaping.

An earlier generation of labor leaders and social democrats viewed mass illegal migration as one component in a broader suite of policies, including outsourcing and union-busting, meant to squeeze wages. United Farm Workers founder Cesar Chavez, for example, repeatedly denounced illegal migration and would make a point of alerting the authorities to employers hiring such workers. In 2007, Bernie Sanders said: “On one hand you have large multinationals trying to shut down plants in America, and on the other hand, you have the service industry bringing in low-wage workers from abroad”. The result: “wages go down”.

Negative sentiment toward immigration is driven by the net volume and type of immigration to a given country, dividing native populations from newcomers over wages, skills, and cultural background. The last variable, culture, is mercifully less salient in the United States, given the country’s spectacular capacity to assimilate migrants. In sufficient numbers, though, low-skilled illegal immigration necessarily provokes a backlash, including in cases where migrants and the native-born otherwise lack meaningful cultural differences.

To be fair to open-borders advocates of the Left and the libertarian Right, public opinion had been comparatively indifferent to large volumes of low-skilled legal immigration until recently — that is, except among Republicans. Plus, despite high overall immigration, illegal immigration declined dramatically after 2000, with border crossings plateauing at around 300,000 a year in the 2010s. By this point, the Nafta shock in Mexico gave way to the low-growth but resilient Mexican economy of today, leading to a 90% reduction in illegal entries by Mexicans. Mexico’s role as a source of outmigration was soon eclipsed by the likes of Honduras, Guatemala, and El Salvador.

Successive presidents also oversaw crackdowns at the southern border and boosted deportations. The Obama administration instituted family detention, deporting 2.9 million people in its first term and 1.9 million in its second. By comparison, the first Trump administration managed 1.5 million deportations, including a smaller proportion of violent criminals.

Then came the social-justice revolution of the mid-2010s, which consummated the Democratic Party’s capture by college-educated professionals. Mantras such as “no human being is illegal” gathered strength in Democratic circles as activists denounced Obama as the “Deporter in Chief”. The progressive zealots got a boost from Trump I, the cruelty of whose child-separation policies did wonders for the cause of limitless migration. Despite the first Trump administration’s “zero-tolerance” policy, illegal immigration remained unchanged up until the pandemic; pandemic-induced travel restrictions caused overall immigration to fall near zero in 2020.

At that point, more Americans (34%) favored increased immigration than disfavored it (28%) for the first time. Emboldened in their opposition to Trump, Democrats excised what little immigration dissent remained in the party. Having previously called open borders a “Koch Brothers proposal”, Bernie Sanders embraced a moratorium on deportations and called for decriminalizing border crossings under pressure from the liberal press.

The Biden administration followed suit, announcing a temporary pause in deportations and adopting a near limitless interpretation of asylum law. While a global surge in immigration was to be expected following the end of pandemic restrictions, voters correctly interpreted Democratic policy as offering an unprecedented incentive to would-be migrants. At least 10 million foreign nationals without legal permanent status entered the country since 2021, per the Congressional Budget Office, the most of any four-year period in history.

In June 2024, Biden backtracked, issuing an executive order barring migrants from soliciting asylum when average daily encounters exceed 2,500. The result was a decline in monthly crossings by around 80%. The move was supported by minorities and working-class voters but abhorred by affluent progressives. Indeed, by the end of 2024, monthly crossings were lower than under Trump prior to the pandemic.

So here we are. The question now is how tough immigration enforcement should be, and whether Republicans — and eventually, Democrats — will once again overreach in their respective preferences.

The starting point for the debate is a simple proposition: namely, that mass deportations are entirely justified, representing a return to Obama-era deportation policy. Under Biden, a total of 1.49 million newcomers were removed — a shockingly paltry figure, given the total number of unlawful entries. Currently, Team Trump seems to be prioritizing the 1.4 million migrants who have received final orders of removal. Logistically speaking, it will be difficult to deport even this number anytime soon.

The goal of the new administration should be to craft a lasting immigration policy benefiting American workers. This will require gaining buy-in from Democrats where possible. Improving the asylum system requires sending a signal to migrants they are certain to be deported unless they have a credible claim of asylum. At the same time, employing more immigration judges for the current asylum backlog is eminently desirable and an area where Republicans could work with Democrats. It’s counterproductive for the sitting president to antagonize deportees’ receiving countries — however obnoxious their leaders may also be.

A points system based on migrants’ skills — ideally similar to that used by Canada prior to the pandemic — should also be adopted. While it’s true that Americans have historically tolerated high levels of low-skilled immigration, restrictionists are correct that chain migration doesn’t ultimately serve the national interest or workers. Shifting from family-based to skills-based migration would go a long way toward taming the anti-immigration fervor of the GOP base.

During his first term, Trump expanded Obama’s family-detention policy in an effort to deter migrants of all stripes. This and later family separation was what resulted in the administration’s failure to deport more violent criminals than its predecessor: Trump I turned public opinion against itself. Disturbingly, Trump’s proposal to expand migrant detentions in Guantanamo Bay suggests a willingness to double down on past failures, though the administration appears to be prioritizing removals with infractions beyond just illegal entries thus far.

Further, the Remain in Mexico policy was a marked improvement that helped curtail the 2018 spike in illegal immigration, whose revival will similarly benefit the current asylum backlog. Contrary to progressive critiques, Mexico as a whole isn’t unsafe, with many migrants residing in vibrant metropolitan areas while they solicit asylum. Then as now, the policy’s success will turn on Trump’s willingness to maintain a productive relationship with Mexican leaders.

Like her predecessor, Andrés Manuel López Obrador, Mexican President Claudia Sheinbaum has displayed a willingness to work with Trump, making record arrests of migrants and drug seizures, as well as constructing facilities to receive deportees. Having cajoled Mexico (and Canada) into substantial action, the effectiveness of the president’s tariff threats cannot be denied. Given his decision to impose tariffs anyway, however, it will be hard for either country to justify continued cooperation with Washington.

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By Lee Fang

Republicans should also note that their rationale for a military intervention in Mexico directly contradicts the premise of the Remain in Mexico policy. If carried out, an invasion would fuel a migratory catastrophe. If or when Mexican cartels’ recent terror designation is taken to its logical conclusion, the resulting torrent of actual refugees would undo decades of declining illegal immigration from Mexico. Trump could, instead, aid Sheinbaum’s proposal to expand the recently inaugurated Maya Train into Central America, a prospect certain to deter migration by creating jobs and fueling development.

Finally, if Trump is truly serious about deterrence and American workers, he should support the passage and aggressive enforcement of mandatory E-verify. Forcing employers to confirm the immigration status of workers — and making an example of those that don’t — would go a long way in curtailing migrant exploitation and raising wages for native workers.

Progressives should back these efforts. As it is, their simultaneous defense of unrestricted low-skilled immigration and opposition to H1B visas serves the class interest of their professional constituents. After all, the exploitation of H1B workers directly undercuts the bargaining power of high-skilled college graduates—the same group that benefit from a ready supply of undocumented maids and landscapers. But this policy mix has proved deeply unpopular with the non-college majority that decides US elections.

In the same vein, it’s telling that the immigration rhetoric of populist Republicans — such as Vice President JD Vance — echoes that of pre-Trump labor Democrats. This isn’t to say that the comparably oligarchic Republican Party is truly representative of working-class interests. It does, however, speak to the changing nature of both parties’ coalitions.

Progressives can continue dismissing the impact of illegal immigration on wages — relying, ironically, on the same neoliberal economists they would otherwise condemn. The reality, however, is that working-class voters will continue to believe that their wages will be undercut by foreign workers willing to work harder and for less than they would.

Democrats should recall the counsel of the civil-rights icon Barbara Jordan: “For the system to be credible, people actually have to be deported at the end of the process”. For their part, Republicans should avoid an overestimation of their mandate that has and likely will once more empower their progressive enemies.

With this sweeping reform, Labour hopes to rebalance the rewards of capitalism towards workers. Who can blame them? Between 2007 and 2015, the UK was the only advanced country in which wages contracted while the economy expanded. The theory is that giving workers a seat at the decision-making table (also known as co-determination) will ensure their interests are championed, and giving them a stake in the companies they work for will increase their productivity.

Unsurprisingly, business leaders responded with hostility. Yet the plan is not hugely radical – in fact this model is the norm in one form or another across much of Europe. Predictably the conversation quickly turned to Germany and its famed industrial model.

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Could Mill's model mend capitalism?

By Victoria Bateman

Defenders of the policy, perhaps trying to quiet thoughts of Venezuela, pointed to Germany as a more responsible and socially just model of capitalism – the respectable counterpoint to the Anglo-saxon flavour of financialisation and short-termism. And while the academic literature is mixed, there is evidence that greater co-determination leads to higher wages, less short-termism, greater productivity, and even higher levels of income equality. If the aim is to give workers a fairer deal, McDonnell looks to have hit on the right polices.

On the other hand, detractors point to the scandalous lapse in corporate governance show by the Volkswagen emissions scandal, as well as industrial inefficiencies – Toyota makes as many cars as Volkswagen with half the workers. In the wake of the scandal, the cosy relationship between union leaders and the dominant shareholding families was blamed for facilitating the cover up. This would suggest that Germany’s more worker-friendly model has some worrying flaws.

The desire to look outside our borders for inspiration is not uncommon – market fanatics, for example, extol the virtues of Singapore, while anarchists wax lyrical about Kurdistan – but it is foolish. Because what the proponents of international examples too often ignore is national context. McDonnell’s plan would be implemented in a system institutionally distinct from its European cousin. In the UK, the form of banking, the concentration of shareholders, the character of industrial relations, and the basic corporation structure are all substantially different from Germany, rendering comparisons meaningless.

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The second half of the VW scandal is that many guilty managers kept their jobs

By Harriet Maltby

Rather than trying to copy and paste policies from abroad, politicians and policymakers need to examine how reforms will interact with our own institutions, and consider what other policies might be necessary as complements.

In the UK context, co-determination may not be as susceptible to the scandals it precipitated in Germany. The cover-up at Volkswagen was not the fault of the workers’ councils alone, but the product of easy collusion between them and the dominant shareholders in the Porsche and Piëch families. While such a setup is par for the course in Germany, ownership in the UK is much more broadly dispersed – in about 90% of companies listed on the London Stock Exchange, no shareholder owns more than 25%. Comparatively, the Porsche family has majority voting rights in Volkswagen. In theory, this may minimise the risks of co-determination experienced in Germany, making it a safer bet in the UK.

Ultimately, however, it will take more than co-determination and shared ownership to rebalance British capitalism towards workers. The UK has myriad, long-standing economic problems which amount to a new British disease. For a start, the UK’s financialised model is driving a culture of short-termism, which sees big business prioritise share buy backs over investment in training and wages. It’s difficult to see how McDonnell’s reforms will shift the obsession with quarterly earnings – shareholders will still expect those returns.

Further reading

Corporate buyback culture is financial engineering not value creation

By Charlotte Pickles

It is also far from clear how the reforms will boost private sector R&D investment – the UK has the lowest level in the whole of the OECD – which is essential for driving innovation; and innovation is key to boosting productivity and therefore wages. And nor will they help the many towns around the UK struggling to attract jobs and stimulate growth – yet a geographical rebalancing of the economy is essential if workers are to thrive outside of Britain’s cities. McDonnell’s commitment earlier in the year to Community Wealth Building funds, aimed at supporting co-operatives and mutuals at a local level, hints at a model of inclusive growth unmoored from Whitehall bureaucracy, but the idea needs fleshing out.

Yet with UK capitalism in desperate need of comprehensive reform, it is nonetheless the Labour party that seems to have the most promising plan. McDonnell has pledged that a Labour government would take on socially irresponsible businesses, overhaul the accountancy cartel and introduce legislation to strengthen the rights of insecure workers. If you look past a few headline nationalisations of public utilities, despite the much-noted Marxist connections of the leadership, Labour’s plan is about reforming capitalism, not replacing it.

It is hard not to be cynical about such an initiative, not least because it comes on the back of a deluge of criticism directed at Amazon for its aggressive tax avoidance and exploitative treatment of warehouse workers. Bezos’ generosity looks an awful lot like an attempt to distract from those brand-damaging facts.

It is also an exercise of power, as philanthropy often is. Some philanthropists, such as Microsoft chief Bill Gates, seem genuinely to want to make a difference in the world. Others, however, are demonstrating that they have the power to dole out money on a whim – Bezos is the only American among the world’s five richest people to not join the Giving Pledge.

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'Open' London is built on exploited labour

By James Bloodworth

This attitude to philanthropy was summed up well by the American industrialist Andrew Carnegie, who viewed the “man of wealth” as “the sole agent and trustee for his poorer brethren.” The philanthropist, he went on, should use “his superior wisdom, experience, and ability to administer” to help the poor and needy because he is able to do so “better than they would or could do for themselves”.

Grasp this pseudo-paternalistic view of humanity and you begin to understand how the super-rich are able to rationalise their tax avoidance and reconcile it with care in the community. Men like Jeff Bezos view it as their job, rather than the job of the democratic state, to distribute their vast riches. In pledging a fraction of his wealth to assist the poor and needy, Bezos is flaunting the power that only unimaginable riches can bring – the power to dodge the full force of the tax man, dole money out on a whim and be applauded for it as a munificent philanthropist.

There is particular effrontery in adopting a lofty philanthropic air when you can’t seem to find the money to make life bearable for workers in your warehouses. I have written many times about my experiences working in an Amazon warehouse back in 2016. Workers were urinating in bottles because they were afraid to take toilet breaks (a recent survey by Organise found that 74% of Amazon warehouse workers in England were scared to go to the toilet because of productivity targets), and disciplinaries were given out by management for taking sick days, regardless of whether they have a doctors note. The agencies Amazon used to employ workers in the warehouse frequently underpaid people – one young woman I interviewed was paid 62p an hour by one such agency, and it took six weeks for her to claw back the money she had earned.

Further reading

Our broken tax system is threatening the free market model

By Charlotte Pickles

Bezos may see his philanthropy as ‘giving back’– the cliché deployed by every self-important philanthropist – but his company was giving very little back to the community of Rugeley, the town in which the warehouse I worked in was located. Every job as a picker or packer in the warehouse was temporary and lasted for nine months, providing little stability.  “Be under no illusions, this is a temporary job,” we were informed on the first day. And despite being the biggest employer in the town, few local people worked at Amazon. Instead the warehouse relied on an army of Romanians bused in predominantly from neighbouring areas – apparently the only people economically desperate enough to put up with the Victorian working conditions.

This state of affairs exists because companies like Amazon are run like dictatorships. A cult of personality prevails – witness the army of sycophantic Twitter users who turn up under any article critical of Amazon to blast out positive statements about the company. One of these paid-up brand ‘ambassadors’ seems to turn up whenever I tweet about the company these days. Within the warehouse, language is distorted in an Orwellian fashion. If you lose your job at Amazon you are not sacked or fired, but, euphemistically ‘released’.

Workers’ representation – through forums such as trade unions – are all but non-existent. Those on the shop floor at Amazon are, as Carnegie put it, subject to the “superior wisdom, experience, and ability to administer” of higher ups like Jeff Bezos.

Last year Amazon trebled its UK profits yet paid less in tax than the year before. If Bezos really cared about the lives of the poor he would use some of that profit to pay his workers a decent wage – enough, perhaps, so that they do not have to sleep in tents, as has been reported in Scotland. The billionaire may believe he is better able to spend the money generated by his workforce than they would or could do for themselves, but his charitable initiative, based in the US, will do nothing for low income families outside of North America.

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Bezos has said that his new network of pre-schools will “use the same set of principles that have driven Amazon. Most important among those will be genuine, intense customer obsession.” Yet it is precisely Amazon’s intense customer obsession that has led to such detrimental workforce conditions. If a 24-hour Amazon Prime delivery requires an army of downtrodden workers, hidden away in vast warehouses where they are afraid to take a toilet break, how are those who work in Amazon’s network of pre-schools going to fair? If “the child will be the customer”, as Bezos puts it, is the teacher going to be the professional equivalent of the warehouse skivvy peeing in a bottle?

Charity is inevitable in any society. It is foolish and utopian to believe that the state can provide cover so comprehensive that nobody ever slips through society’s cracks. But the increasing reliance, particularly in the United States, upon mega-rich givers reveals wide economic distortions – the 1% are getting ever richer partly because of the low wages that mean ordinary workers are struggling to make ends meet. Before rushing to laud Jeff Bezos for his generosity, we should judge him for the exploitative treatment of workers in the company that has made him so wealthy.

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Audiocast: How dead-end jobs killed small-town pride

By James Bloodworth

Yet there is often a deep hypocrisy when it comes to the ideology projected on to it.

I am not talking about the alt-right’s depiction of London as a JG Ballard-esque inferno, replete with ‘no-go’ areas for non-Muslims. That image is the product of conspiracism, paranoia and bigotry. My assault on the hypocrisy of the city should not to be confused with some of the barely-disguised attacks on the people who live there by this gang of hot-air merchants. London is, in the main, a welcoming, tolerant city in which people from all backgrounds mix and rub along. In this sense, it really is the liberal metropolis hubristically depicted by sections of the media.

Yet this feel-good narrative hides a much deeper – and altogether less reassuring – side to London. For our capital city is one of enormous class inequalities, few of which are assuaged by the ubiquitous, back-slapping rhetoric around diversity and inclusiveness. And worse, the narrative of liberal progress is too often co-opted by those who profit from the exploitation of some of London’s poorest residents.

I have experienced this first hand. In 2016-17 I spent nearly three months driving an Uber cab in the capital. Uber – perhaps more than any other company – could be a metaphor for the uneasy relationship between glossy liberal cant and unvarnished economic reality.

The number of private hire drivers in London increased by 13,000 – a jump of 25% – in the two years following the launch of UberX, the low-cost option that most passengers use for normal journeys. In 2012 there were 5,000 passengers using Uber’s app in London; by 2016 there were 1.7 million. As any Uber-using Londoner will know, it is unusual to meet a driver who is not a first or second-generation migrant, while Uber’s own data suggests that around a third of its London drivers come from neighbourhoods with unemployment rates of more than 10%.

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In other words, London should be having a conversation with itself about exploitation, in this instance exploitation dressed up as liberation. Many of the Uber drivers I met were not budding entrepreneurs; they did the job out of desperation. “It’s like they’ve accepted it because they’re immigrants, you know,” one Eritrean Uber driver told me of his friends. “I mean, they don’t really have any options”.

During my onboarding session with Uber, we were showered with hip and feel-good rhetoric about the ‘diversity’ of the company by a 20-something, jeans and t-shirt-clad Uber office employee. Progressive buzzwords rolled off his tongue while we were effectively told that workers’ rights were a relic of the past. Money-making – or the idea of it, for you never did make much money as an Uber driver – was recast as something intrinsically bound up with liberal principles like tolerance and diversity.[1. ‘Woke capitalism’ was also very much promoted at Amazon, the worst company I have ever worked for in terms of workers’ rights]

This is representative of a certain type of politics, one which self-satisfyingly labels itself ‘open’, in contrast to a parallel and ‘closed’ populist nativism. Liberal London, with its tolerance, its openness – just ignore the impoverished fleet of Uber-Eats and Deliveroo riders and the army of low paid service-sector workers – is cast as a beacon.

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Thus, our politics is increasingly as follows: on one side are the alt-right who wish to foment a culture war, and on the other are those for whom a large gap between rich and poor is acceptable – so long as the boardroom which sits atop this hierarchical structure happily features a representative sample of women and non-white faces.

Better boardroom representation is undeniably desirable, but it does little for those who trudge into work every day to clean said boardrooms (and who, by the way, are overwhelmingly non-white and migrant). Much of the city’s wealth is built upon this vast network of exploited migrant labour, yet the mainstream narrative of ‘equality’ rarely equates to giving these people a bigger slice of the economic pie.

Peer beneath London’s floorboards, if you will, and there are people every bit as left behind as those marooned in former collier towns in the north of England. London is the richest part of the country but also the most unequal. After taking into account housing costs, the Capital has a higher proportion of people living in poverty (28%) than anywhere else in Britain. It is within some of the richest London boroughs, such as Kensington & Chelsea, and Westminster, that some of the highest rates of poverty can be found – pockets of deep deprivation among vast wealth. And London also lays claim to the highest rate of child poverty of any English region at a third of all children.

For London’s left behind, the sense of failure is compounded by the visibility of vast wealth just a few blocks away. Streets of beautiful multi-million-pound houses sit cheek by jowl with grim housing estates. For the residents of the latter, the owners of the former may as well be living in a parallel universe.

I remember seeing the glistening penumbra of the Shard through the grimy window of the digs I stayed in when I was an Uber driver. In my shared accommodation, an assorted group of migrant workers slept in beds partitioned off with strips of flimsy cardboard; the Shard’s luxury apartments were on the market for up to £50 million.

According to an analysis of the 2010-12 Wealth and Assets Survey, the most affluent fifth of Londoners owned an average £1.78 million in wealth, compared to the poorest fifth who owned an average of just £4,000.

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For all I have grown to love London, its liberal projection encapsulates an ideal that a Spanish friend has termed ‘lean-in multiculturalism’. It is dominated by a temperament which, as the American literary theorist Walter Benn Michaels puts it, “has no problem with seeing people being left behind, as long as they haven’t been left behind because of their race or sex”.

To be a hypocrite is often to be half correct. And so it is with London. It is self-evidently right to promote tolerance along with racial and sexual equality. But equality – or more precisely, a rhetoric of equality – that is unmoored from a sense of economic justice is not really equality at all. It certainly has little to say to the Uber driver – or for that matter, to the millions of others toiling away in London’s low pay economy – who have precisely zero chance of diversifying a company’s boardroom any time soon.

The biggest shift of the late 20^th century, a shift set to engulf the 21^st, is from labour to capital as a factor of production. As with the first Industrial Revolution, the core issue is the reallocation of resources that will result from the application of new technology.

Second only to resisting invasion by a foreign power, full employment has long been the core concern of political leaders. It’s the key to public sentiment – and re-election. It’s a key reason why Trump made a big deal out of criticising offshoring, competition from China, and cheap immigrant labour – even if the bigger challenge to jobs is automation.

Unemployment numbers have in fact been low in recent years. Yet something strange has been happening in the United States and, to a lesser extent, to other industrialised economies. Despite full employment, wages have been depressed. What’s more, plenty of people have ended up without jobs – and not even looking for jobs, which is why their absence from the workforce is hidden from the headline unemployment rate. As candidate Trump claimed back in 2016: “The five percent figure is one of the biggest hoaxes in modern politics.” He was onto something.

Male ‘workforce participation’ is the term economists use for men of prime working age who have jobs – and it has been steadily eroding for decades. Between 1954 and 2016 it dropped from 98% to 88%. In other words, a lot of people disappeared from the unemployment stats because they stopped searching for work. They decided to occupy themselves in other ways – by taking ‘early retirement’ on the golf course, caring for their grandchildren, playing video games, or falling into a spiral of addition. They became the ghosts of the unemployment statistics.

John Maynard Keynes, doyen of 20^th-century economists, foresaw just this situation nearly a century back. With a somewhat ironic turn of phrase he spoke of the emergence of a “new leisured class”, as machines take jobs.

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Alongside the new jobless, we have many more people who do have jobs but whose standard of living has been increasingly depressed. The income stats are terrifying. According to Oxford economist Carl Frey and his colleagues, between 1979 and 2013 “the real wages of the vast majority of Americans … stagnated or even declined”. Productivity rose 64.9%, yet for 80% of the workforce wages went up by only 8.2%.

The shift in reward to the owners of capital has been immense. According to Frey, “A prime explanation is the robot revolution, which has contributed to both joblessness and wage reductions, especially among American men.” Specifically, “Diffusion of robots . . . has caused unemployment and wage reductions in particular among workers in blue collar jobs without a college degree.” Frey remarks that this “mirrors” the first four decades of the Industrial Revolution in the UK – when incomes stagnated or fell. “A large segment of the workforce has become detached from the engine of growth.”

What does this mean for an American working family? “The income distribution of 1979 would leave today’s top 1% with $1 trillion less in annual income and [add] $11,000 for a family in the bottom 80%.” These are astonishing numbers. It is unsurprising that with such a diminishing share of income going to workers there is a growing sense of political disenchantment – even radicalism. As Frey notes, from an economist’s point of view if workers don’t accept the “market reallocation” of their value, they will seek other kinds of redress.

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But what technology takes away, it also gives back. It is those same developments in digital technology driving automation that have granted the disaffected, and those who wish to play on their disaffection, the tools to hit back.

The disenchanted flyover voter – mid-life, male, lacking in education – does not need to be a social media activist, just a consumer. He can connect with like-minded people and access content to stoke his frustrations.

Enter Brad Parscale, head of digital for the Trump campaign. In a remarkably candid interview with the US television network CBS, Parscale laid out the Trump strategy to capture the hearts and minds of the disaffected voters in key states.

Apparently, Facebook offers political campaigns specialists who are “embedded” in the campaign and help drive it. Parscale claims he was able to ensure all the Facebook people embedded with him were actual Trump loyalists, though Facebook denies that campaigns had a choice in whom to accept. Either way, the Trump campaign signed on to the highly sophisticated marketing game. They tested 50-60,000 messages a day, up to 100,000 some days. The goal? As Parscale puts it, to reach “15 people in the Florida Panhandle” – micro-targeting voters based on their concerns.

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And on top of this Facebook targeting, Donald Trump’s mastery of Twitter enabled a torrent of rabble-rousing tweets to be delivered directly to his followers, further stirring up discontent. And we now know that Russia has been aggravating the situation – both through ads from spurious organisations, and groups led by fake individuals. The goal has been to induce division by playing on the fears, legitimate and otherwise, of disaffected flyover Americans – and it is working.

Emerging digital technologies are pouring fuel on the flames of disaffection felt by flyover communities – both through their impact on labour markets, undercutting jobs and holding wages down, and in enabling those feeling aggrieved to find like-minded individuals and access content that reinforces their sense of disenfranchisement. Mitigating the impact of the Fourth Industrial Revolution on its losers must surely be a priority.

Ideas include confronting crony capitalism; tackling the root causes of low productivity; and shifting the burden of taxation from income to wealth.

Those all look good to me, but the thing about long-term reforms is that they take a while. Is there anything governments could be doing right now?

There is, argues Noah Smith in a piece for Bloomberg. We could ban “non-compete agreements”:

“These [agreements] bar employees from going to work for a company’s competitors, short-circuiting the process of competition by which companies bid up wages. Simply banning this type of anticompetitive contract would help bring back bidding wars that increase workers’ power and pay. Some states, like California, have already done this.”

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Writing about the same issue for the Atlantic, Annie Lowrey points out that the problem is more common that one might think:

“…non-compete and no-poaching clauses used to be common only among executives and other high-income workers, but now roughly one in five workers are covered by them; more than half of major franchise businesses… include no-poaching agreements in their contracts. This suppresses wages by reducing competition for workers—and is now seen as one of several reasons wage growth has been so sluggish during the recovery.”

But without such arrangements how would companies protect their investments? Indeed, why would they invest at all in things like training and innovation if free-riding competitors can poach their staff unimpeded (along with everything they’ve learned while onboard)?

That might be a valid point in regard to staff in senior positions and for specialist companies like tech sector start-ups. But for most employees, non-compete agreements are an unjustified imposition. That’s especially true of large, diversified companies with competitors in a number of different sectors; it would be entirely unreasonable to prevent workers from accessing so many sources of alternative employment.

When restrictions of this sort are placed on low-skilled, low-paid staff it looks as if the thing being protected isn’t the company’s ‘secret sauce’, but the cheapness of a rigged and captive labour market. With full, or nearly full employment, becoming a feature of many local and national economies, any persistence in wage stagnation should be looked upon with increasing suspicion.

Further reading

Full employment, decent pay and affordable housing: choose two

By Peter Franklin

For companies above a certain size and positions below a certain wage level, barriers to job-hopping should be removed as a matter of urgency. If employers want to hold on to staff then they should pay and treat them accordingly. 

This is something that we all have an interest in. Even if you’re well-paid and happy in your job, it’s your taxes being used to fund the support mechanisms – like social housing, tax credits and other subsidies – that make low-paid employment even minimally sustainable. In effect, low-paying businesses are profiting from your labour, not just that of their own staff.

Ultimately, it’s an issue of basic fairness. In a globalised world, multinational corporations can only get that way because different countries allow them to sell their goods and services at the best possible price. If the words ‘free market’ are to carry any moral content then the same freedoms should be enjoyed by ordinary working people.

In a sense this is unsurprising; for too many people, the system isn’t working. While unemployment is low, employment isn’t giving people what it’s supposed to. Wages remain below the pre-crash peak, and most people in poverty are now in a working household. That’s partly due to woefully poor productivity growth, but it’s also about how wealth is shared. Even before the crash, productivity and average pay had decoupled – increases in GDP are no longer benefitting the majority of workers.

Beyond wages, for too many people, work is a miserable experience. We’ve seen a massive rise in insecure forms of work – including zero-hours contracts. Too many people are stuck in low-pay jobs with little chance of progression. And just one in three workers feel able to influence decisions at work. In this context, with millions feeling left behind and lacking a voice at work, it is no surprise that the ‘take back control’ narrative had such resonance during Britain’s EU referendum.

The decline of the union movement is a major factor in explaining the ills of our current labour market. The purpose of a union is to aggregate the power of working people so that they can protect and improve their pay and working conditions. Weaker unions has meant weaker labour power, and this has contributed to rocketing inequality, as workers have been less able to secure a fair share of the wealth that they help generate. In the four decades up to 1979, union membership more than doubled, and the share of national income going to the richest 1% fell by two thirds. Stronger unions made Britain a more equal country. In the nearly four decades since, union membership has fallen by half, and the share of national income going to the top 1% nearly trebled.

Left-wing voices aren’t the only ones raising concerns. The Chief Economist of the Bank of England has recognised that declining union membership has contributed to wage stagnation, and the OECD has shown that falling collective bargaining coverage is associated with rising inequality.

While many advanced economies have seen a weakening of the union movement, the change has been particularly stark in the UK. Since 1979, the proportion of workers who are union members has fallen by half, and the coverage of collective bargaining has fallen by two thirds. What’s more, it’s the workers who could most benefit from membership – low skilled, low paid workers who lack bargaining power in the labour market – who are least likely to join. While most public sector workers are still union members, 13.5% of private sector workers are.

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The decline in the trade union movement has been in part due to changes in the economy and to changing business models. Shifting social attitudes may also have played a part, but support for the movement remains strong. Eight in ten adults and seven in ten Conservative voters say that unions are vital to protecting workers’ interests.

One thing we cannot ignore, however, is the role of Government policy. We have seen a prolonged and ideologically-driven attack on the union movement. While some of the measures were justified – such as the requirement for a ballot for industrial action and the banning of the closed shop – the cumulative impact of successive legislative restrictions, endless attacks from much of the press, and opposition from many employers has been to create a ‘hostile environment’ for trade unions. Remarkably, despite the lowest levels of industrial disputes since records began in 1891, the Coalition Government chose to further tighten restrictions on trade unions with the Trade Union Act 2016.

This approach must be reversed. Government should recognise that unions could be vital partners in delivering on their priorities. Unionised workplaces have higher pay, higher levels of training, and lower inequality. They have higher levels of job-security and a better work/life balance. Trade unions could help in the delivery of the industrial strategy, in boosting productivity and, crucially, in ensuring the gains are fairly shared. Stronger unions could also help tackle the rise in insecure forms of work, and the one-sided flexibility that sees workers shoulder all the risk.

Inevitably, when you highlight the need for stronger unions, some will warn of a return to the Winter of Discontent. But an increase in union membership and collective bargaining doesn’t have to lead to industrial unrest; countries such as Sweden combine high levels of membership and collective bargaining, and low levels of industrial unrest as part of a modern, innovative and productive economy.

In our recent report for IPPR’s Commission on Economic Justice, we identify key steps that government can take to address the growing power imbalance. We call for a renaissance in collective bargaining, with the promotion of sector-based bargaining in industries such as adult social care, where low pay and exploitation are endemic. We call for measures to level the playing field so unions can better recruit and organise, including a ‘Right to Join’, under which employers would be required to inform workers of their right to join a union on day one of employment. And we call for unions to be embraced as social partners in driving industrial strategy and boosting skills.

If we want to boost productivity and pay, if we want to tackle the scourge of inequality, and if we want to ensure that our economy works for working people, then trade unions must be our allies.

Further Reading

Why did union leaders abandon the workers?

By Paul Embery

This was strikingly apparent in some of the places I visited in 2016 during the research for my book, Hired. For those who are not part of the hidden world of Britain’s warehouses and call centres, it is easy to ignore those that are, because the latter are typically too exhausted to leave any meaningful record behind.

You can punch your credit details into Amazon’s website without ever having to think about what goes on in one of its vast ‘fulfilment centres’. Just as the people who broke their backs in the pink splodges on the map did not exist in the minds of those who sipped sherry in England’s drawing rooms a century ago, so the people cocooned inside Amazon’s warehouses may as well not exist to those browsing the company’s website. Plus ça change, plus c’est la même chose.

The cheapness of a service can also arguably alter the mentality of the person using it. While this may be anecdotal, I was told on several occasions by Uber drivers during my research that the low cost of the rides altered how customers typically responded to the person picking them up in a cab. “It’s to do with the rates,” a forty-two-year-old Eritrean Uber driver named Aman told me emphatically:

“For any service you pay, if you pay a high price you tend to have respect for that person…even though it’s the same job, or it’s the same service you are receiving, you’re gonna respect whoever is helping you more, unfortunately.”

Though not quite the same thing, while driving for Uber myself I noticed a peculiar disconnect on the part of the customer between the fare they were paying and the money I took home at the end of a shift. People in the back of my cab would regularly bemoan ‘surge’ pricing, seemingly oblivious to the fact that this mechanism – whereby a multiplier is applied to standard rates during periods of high demand – was essential from a driver’s point of view in ensuring that you earned something close to a living wage.

There is a dilemma here though: how does one oppose environmental degradation and waste, sweatshop labour and a ‘race to the bottom’, without depriving working people of the consumer goods that make life worth living? Every worker is, as it were, also a consumer, and the Amazon warehouse which is characterised by a precarious and poorly paid workforce is also churning out the consumer goods that are affordable enough for working class people to buy and enjoy.

In the case of Amazon, however, the nature of the jobs being created by the company does seem important when the company has very often been enticed to set up in a particular area using local authority cash. A street leading up to Amazon’s huge fulfilment centre in Swansea was purpose-built for the company by the Welsh government – to the tune of £4.9 million. That money came on top of an £8.8 million regional selective assistance grant given to Amazon for the cost of the warehouse to encourage the company to come to South Wales. Moreover, the year the purpose-built track was finally completed Amazon paid just £2.4 million in tax in the UK on £4.3 billion in sales – less than 0.1% of its total revenue.

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In other words, Amazon’s cheapness is not only a result of the precarious labour force that toils away in its warehouses – local ratepayers are also picking up some of the cost.

Of course, reigning in companies like Amazon might seem an impossible task when parts of the country are crying out for jobs and when average incomes are stagnating. But local authorities should look beyond job numbers alone when spending money in the hope of enticing big corporations to an area. In the Amazon warehouse I worked in in Rugeley, most of my co-workers were Romanians bought in on coaches each day from surrounding towns and cities like Wolverhampton and Birmingham. In this context it is hard to see how Rugeley was gaining a great deal of benefit from the company’s presence.

As to where the responsibility for sourcing goods and services on an ethical basis rests, it is first of all with those who can afford to pay a little more for things. There are of course ways of dealing with low pay and precarious work that go beyond consumer activism. But just as it is possible to give to charity while working towards an end to the need for it, so each of us might consider the true cost of the cheap products or bargainous rides home – and then act on that knowledge. In the twenty-first century when the internet allows us to source ethical alternatives, there are fewer excuses for ignoring what really goes into producing the plethora of cheap goods and services that we’ve slowly grown accustomed to.

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