Squaring the circle on immigration

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It had to happen. Amber Rudd, the Home Secretary, has refused to commit to a net migration target. Facing a barrage of complaints from the hospitality industry about potential staff shortages post-Brexit, Rudd appears to be softening the government's line. She told BBC Radio 5Live's Pienaar's Politics:

"My personal view is we need to continue to bring immigration down. I want to make sure that we do it in a way that supports businesses.”

So what way might that be, then? After all, her boss is on record as saying she thinks net migration should fall to the tens of thousands. Currently, it is in the hundreds of thousands: according to the latest ONS statistics, net migration for 2016 was 273,000 (net inflow), of which 164,000 was from outside the EU. Even if immigration from the EU stopped completely after Brexit, it would not be enough to bring net migration down to levels Theresa May considers "sustainable". The UK would also have to impose much more draconian restrictions on non-EU immigration. How this can be in any way supportive to business is difficult to imagine. No wonder Ms. Rudd doesn't want to have a definite net migration target.

But in the Sun, Ms. Rudd's interview with Pienaar's Politics comes across entirely differently:

THE HOME SECRETARY yesterday vowed to “push” big chains like Pret a Manger to hire more Brits – and kick their addiction to EU staff. Amid a fresh row over immigration targets, Amber Rudd said it was up to business to “look after people who are otherwise unemployed”.

And instead of quoting Ms. Rudd's business-friendly rhetoric, the Sun highlighted this comment:

“I did hear that Pret a Manger had come out and said it’s absolutely essential for us to have European workers because if we don’t we’re going to have to make more of an effort to recruit in the UK. Well, good. I’d quite like them to make more of an effort to recruit in the UK. So we will push them as well to do more in the UK.”

Oh yes, very friendly to business. Pret a Manger has already said it will try to recruit more British people. So Ms. Rudd's response is to say "we will push you to do even more". Riiight.

But I am wondering where the queues of British people waiting to work in Pret a Manger are. I haven't seen any, have you?

It is not just service industries like Pret that are under pressure to "hire British". The Sun says that manufacturers, too, need to "wean themselves off" cheap foreign labour. But where are the hordes of unemployed British that are being denied jobs?

The truth is that they don't exist. The latest Labour Force Survey shows that in the year ended February 2017, the total number of people in work rose by 312,000. Nearly three-quarters of adults aged 16-64 are in work: that is the highest proportion since 1971. Unemployment is the lowest it has been since 2004, and lower than at any time during the 1980s and 1990s:

In short, the UK does not have armies of unemployed and inactive people crowded out of jobs by high immigration. Despite net migration in the hundreds of thousands, British people are not struggling to find work.

Ah, but what about young people? Surely unemployment is higher among the young?

Well, it is - sort of. The unemployment rate among 18-24 year olds is currently 10.8%, which is about double the adult unemployment rate. Among 16-17 year olds it is much higher, over 25%.

But these percentages are deceptive. A large proportion of 16-24 year olds are economically inactive, mainly due to being at school, college or university. So although the percentage of unemployed is high, the actual numbers out of work are low. The Labour Force Survey says that in the three months to end April 2017, the number of 16-24 year olds describing themselves as "unemployed" was less than 600,000, and of those, nearly a third were students looking for part-time work. Nor do most young people remain unemployed for long. According to this Parliamentary briefing paper, at the end of February 2017 only 81,000 16-24 year olds had been out of work for more than 12 months, and the numbers are falling fast: a year before, the number of young people out of work for more than 12 months was 31,000 higher. Clearly, immigration is not stopping young people from finding work, either.

The fact is that British employment has been so successful in the last few years that now there are insufficient unemployed British people to fill the vacancies that would be left if net migration were reduced to the tens of thousands. And it would not be skilled jobs that went unfilled. Principally, it would be unskilled jobs in the hospitality, care and agricultural sectors.

The trouble is, many middle-aged and elderly voters are convinced that unemployment is still up at 1980s levels. After all, we had a recession, didn't we - and when they were young, recessions meant high unemployment. The 1980s recession was especially brutal and long-lasting: in 1985, youth unemployment was still 20%. And everyone keeps telling us that the 2008-9 recession was even worse. So there must be lots of unemployed young people. Or maybe under-employed young people, doing a few hours of casual work but desperately in need of a proper job. Stands to reason, dunnit?

The statistics tell a different story. The Labour Force Survey shows that even under-employment is no longer the problem that it was: full-time employment is rising fast. These days, the problem is low wages, not lack of jobs.

But people don't believe the statistics. Even though in the Labour Force Survey, those surveyed self-report their employment status, there is a widespread belief that the Government is fiddling the figures. Many people believe unemployment is much higher than reported. So they demand that firms should stop importing labour and employ British people. Amber Rudd's "hire British" resonates with them.

However, UKIP's policy of zero net migration resonates too, if only because it reminds older voters of their youth. Paul Nuttall clings to a romantic notion that EU migrant agricultural workers will be replaced by students picking fruit in their holidays, as he did when he was a student. I have news for you, Mr. Nuttall. These days, most students already work, not only in their holidays but during term time as well. So where is this army of student fruit pickers going to come from, pray?

UKIP's version of "back to the future", unrealistic though it is, puts Amber Rudd under pressure. She must somehow square the circle of being hardline on migration, thus attracting UKIP voters, while appeasing Tory-voting businessmen and women who fear that they will have to pay significantly higher wages once the flow of cheap labour from overseas is stemmed. Hence her confusing rhetoric, and her discomfort at being asked for hard figures. She is playing a spin game.

And it is a dangerous game, too. Of course, many people would welcome higher wages. But the other side of higher wages is higher prices. We have become accustomed to cheap food, cheap consumer goods, cheap entertainment, cheap care. So when the middle-aged and old can no longer afford to replace their cars every three years, because manufacturers have weaned themselves off their diet of cheap labour; when they have to cut down on their meals out because pubs and restaurants have put up prices in response to the higher wages demanded by their British staff; when buying fresh fruit and vegetables takes up more and more of the weekly food budget; when the cost of Granny's care home shoots through the roof.....then it will not be the 1980s that they remember. It will be the 1970s.

I wonder whom they will blame?

Related reading:

Intergenerational unfairness
Austerity and the rise of populism
Grieving for a lost empire
A dent in the surface of time

Brexit Employment migration UK Unemployment 2017-05-15