Simon Danczuk has a point about immigration and wages - just not a very good one

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Simon Danczuk, the Labour MP for Rochdale and a rare working-class voice in the Labour Party has written a passionate - almost emotional - piece about the effect of immigration on working-class communities:

That many of these job opportunities have all but disappeared to some working class Britons in parts of the country worries me greatly. As a Labour MP, I strongly believe my party should be forever beating a loud drum about the value of work, about instilling a strong work ethic into people and about how character and achievement comes from hard work. My fear is that an increased reliance on cheap migrant labour to drive some sectors in our economy is chipping away at a bedrock of working class pride, allowing a once strong work ethic to drain away and it’s being done with a comfortable and badly misinformed political consensus. 

I understand this - I've asked on many occasions why all of the 400+ jobs killing chickens in my ward are held by immigrants when the rates of unemployment in Bradford remain stubbornly high. How is it that someone will come all the way from Slovakia or Romania to do a minimum wage job in Bradford but that city's home grown unemployed can't or won't take those jobs?

But we do need to recognise the fact that, across the whole economy, immigration has a positive effect on wage levels:

The research looks at the period from 1997 to 2005 and finds evidence of an overall positive impact of immigration on the wages of native born workers, although the magnitude of the effect is modest. Immigration during these years contributed about one twentieth of the average three percent annual growth in real wages.

So we get economic benefit from immigration - every study finds this to be true - but, as with every aspect of economic development, while the economy may benefit there are some losers within that economy:

“Economic theory shows us that immigration can provide a net boost to wages if there is a difference in the skills offered by native and immigrant workers. However, across the whole spectrum of wages it is impossible for everybody to benefit. Some workers will see a gain, others a loss.” 

Danczuk recognises this fact when he comments on the electricians and bar managers undercut by competition from immigrant. And it's important that we recognise how this can effect those working-class communities Danczuk is writing about. However, we have to ask some tricky questions here, with the biggest question being whether we want to forgo the positive economic benefits of immigration for the whole economy because there are some losers? We might also consider those broader societal issues of cohesion and social capital in answering these questions.

We could introduce an essentially protectionist policy - keeping out immigrants that compete with those working-class folk. I say protectionist because it's not really any different from excluding the goods that the cheap labour could make if it stayed in Romania or India. But protectionism produces losers too - we just replace one set for another.

Or we could find a way - some of that much vaunted redistribution - to ensure that the working-class communities in places like Rochdale don't suffer lower wages because of immigration. Partly this is about the level of minimum wages but it's also about taxation and about creating new opportunities for work that lift those communities out from low skill, low wage work.

Simon Danczuk's complaint also reflects a changing world. Those traditional working-class communities get fewer and smaller with each generation, the new jobs aren't unskilled labouring but a service sector jobs. For sure, working in a call centre is probably a pretty soul-destroying job but is it really any different from the dangerous, dirty drudgery that typified the work of past generations? The truth is that native-born folk don't take those bar jobs, labouring jobs and jobs killing chickens because they don't have to. This isn't the demise of the work ethic but simply that there are jobs that pay just as well in warm offices and shops. The decline of traditional working-class jobs can't be laid at the door of the immigrant.

Finally the work ethic (not a concept I'm a special fan of) isn't defined by a litany of pain or suffering but by that thing Danczuk has proved - if you put the effort in, learn and take the opportunities life throws at you, you've more chance of succeeding economically. And that's what that twenty-something Slovakia shows by being prepared to cross a continent to get a shot at a better future.

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Why football is better for its millionaire players

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Tom Finney was a great player. I have this on good authority - Stanley Matthews, Matt Busby, Bobby Charlton, Booby Moore all said so. Who am I to argue.

And it was a different age, the grounds were packed, crammed to the rafters with fans of all ages. But the players, for all that we described them as heroes, were treated like corporate chattels:

On a pre-War summer tour with England against Italy, Austria and Switzerland, he was made an astonishing offer by Prince Roberto Lanza di Trabia, millionaire president of Palermo in Sicily, a then astonishing £130 a month, a villa by the shore, a Ferrari, flights for his family whenever wished, and a £10,000 signing-on fee.

With the retain-and-transfer slavery employment of the Football League, by which a player could never leave without his club’s approval, Finney could do no more than quietly make his way home. To the end of his days, he would smile quietly about the memory. 

Because Preston North End wouldn't let Tom Finney go his wages - the maximum wage - were just £20 a week. And there was nothing he, or any other player, could do about this, the clubs - private businesses - were profitable, taking the money from millions through the turnstiles but living under the football league's rules meant they could keep that money. The people who brought the fans in their thousands every Saturday afternoon - Finney, Mortenson, Matthews and so on - they didn't get to see that cash.

Today the biggest chunk of the money the fans pay to watch football goes to pay the wages of the players not the dividends of the clubs' owners. "They're not worth it", we say. "Whatever happened to the working class game" we exclaim. And we are wrong. The game is better for player power, better for so much of the money going to the men who make the product, who provide such glorious entertainment for us and who are the focus of childhood dreams and adult passion.

Football is a better game for its millionaire players.

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Understanding trade unions...a thought about pensions

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To what extent this applies in the UK, I'm not sure but:

...labor overhaul is something of a make-or-break moment for Italian labor unions, which still hold sway over negotiating national labor contracts and have held a series of demonstrations against the changes. But today, the unions represent more retirees than workers, and younger Italians have come to see them as part of the problem.

Given the age profile of public sector employment (at least here in Bradford), it seems to me that pensions rather than wages will come to dominate trade union activism - indeed, many public workers seem far more keen to strike over pensions than over wages.

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It really is absolutely none of your business, Mr Clegg

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Nick Clegg really doesn't have the first idea about what the word "liberal" means:

Nick Clegg has committed the government to a crackdown on excessive executive pay, saying that austerity in the public sector had to be balanced by curbs on "irresponsible and unjustifiable" pay rises in the private sector.

The clue here, Mr Clegg, lies in the word "private" - that means it is absolutely none of the government's business. How much business owners choose to pay executives is entirely a matter to be agreed between those business owners and those executives.

This is simply Mr Clegg seeking cheap headlines by playing to the gallery.

Clegg said he was particularly outraged by a recent report saying that directors working for FTSE 100 companies had had pay rises up by 49%. He said they were getting the extra money even though their firms were not doing any better and that this was "a real slap in the face for millions of people in this country who are struggling to make ends meet".

Outraged! Get that folks - now even if the headline is true (and trust me, dear reader, it isn't) it is still nothing to do with Mr Clegg unless he is a shareholder in one of those FTSE 100 companies. In which case the place to raise his concerns is the general meeting of the company not an interview on the BBC.

In the end, it isn't a zero sum game. High levels of executive pay do not lead to lower wages elsewhere. And the FTSE 100 companies are international businesses employing international executives.

Finally, Mr Clegg, let's look at the realities of this high pay. The Chief Executive of Sainsburys - a massive, multi-billion pound turnover business - earns around £900,000 per year. This is less that Carlos Tevez, who occasionally turns out to play football, earns in two months. I reckon the shareholders of Sainsburys are getting a rather better deal, don't you. Mr Clegg?

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