Why the movement of labour is not "free"

Migration is no longer a taboo subject in Britain. But calm debate is rare, and rarer since the referendum.

The European Union actively uses the phrase “free movement” but most migration is anything but free. It is a process of moving labour from areas of unemployment and low wages to areas of higher wages used by employers across the globe. It should really be called the transporting of cheap labour rather than free movement.

Stephen Roach of Morgan Stanley Bank used the phrase “global labour arbitrage” which he described as a system of economic rewards derived from “exploiting the international wage hierarchy, resulting in outsized returns for corporations and investors”. Well, at least he was honest about who got the rewards.

Workers are opposed to this so-called “freedom” at the destination point of that movement, since it is done to depress wages there. In addition organised workers, professional regulators and even governments can also raise concerns at the point of origin of that movement, as has been seen when the Portuguese and Spanish nursing regulators in 2015 formally complained to the UK that agencies recruiting in their countries had been providing misleading information.

Employers love it

As Karl Marx pointed out, capitalism is a system that is always seeking to increase the profits of the employing class. It is very limited in how it can do this. Sometimes the price of raw materials will fall but mostly they rise. Of course sometimes there are technological breakthroughs that allow production of goods to increase hugely for the same or less labour time. But the main fallback for employers across the globe is to find ways of paying workers less.

‘A process over which we have no control.’

In the 19th century it was assumed that as the global demand for labour increased with industrialisation then wages would rise. Marx pointed out that this was not happening and developed his “general law of accumulation” which explained that “accumulation” by the capitalist class was entirely reliant on a “reserve army of labour”. When Marx was writing, the “reserve army” was within the nation and evident in the unemployed, but also in the constant movement of labour from countryside to town (as is seen in modern day China).

Since Marx’s day capitalists have developed their methods to include the “off shoring” of work with the relocation of industry and services from countries with higher wages to lower wages. In this situation it is the work that is moved to the reserve army of labour rather than the other way around. The process of “off shoring” certainly caused unemployment and depression of wages in higher wage areas of the globe.

But in the same historical period capitalism has also relied on the physical movement of labour from areas of low wage to higher wage – the better to depress wages at the point of destination. In Britain this migration has come from within and outside the EU.

The recent history of the EU has been of an eastward expansion and the facilitation of movement of labour from low to higher wage areas. Within the EU this is a process over which we have no control. There are now 3.2 million UK residents who were born in other parts of the EU, of whom 2.26 million are in the workforce. The speed and scale of migration is significant. Prior to 1997 net migration (EU and non EU) was rarely more than 50,000 a year. In 2004 the migration figure rose significantly, reflecting the EU’s expansion.

In the year ending June 2016 immigration to Britain reached 650,000 according to the Office of National Statistics – its highest ever annual level. Within this total EU migration was also at an historic high. Balanced against the number leaving, this gave a net migration figure of 335,000. It means that 335,000 more people are living here than one year ago – more than the whole population of Coventry or Cardiff. There are six EU member states where the average wage is less than a third of our minimum wage and another eight where it is less than half. It is no surprise that of the recent record number of EU citizens coming to live in Britain, 54,000 came from Romania, which has the lowest wage rates in the EU.

The government was pleased to report recent employment statistics for the period July to September 2016 which in comparison to the same period in 2015 showed a rise in employment of UK nationals by 213,000 to 28.39 million. But more significantly during the same period citizens from other EU countries working in the UK increased by 221,000 to 2.26 million.

Planning for a population

The key thing for Britain now is to survive and prosper outside the EU. For that we need a steady population size – not growing or reducing drastically. Note that our population was 50 million in 1950 and 65 million in 2015. Some migration is healthy – roughly the same number of immigrants and emigrants.

Governments, especially any which intend to act in the interests of workers, usually aim to meet the basic needs of a population, and that requires planning – which is the antithesis of free movement. Quite simply, it is impossible to plan to meet the needs of any population that is expanding in a chaotic and unpredictable way. This is felt by citizens in very tangible ways with pressures on housing, health, education, transport and other services. The gates of tube stations in London are now regularly closed as the sheer volume of passengers makes stations unsafe and therefore the flow has to be regulated by a queue system.

Newly migrated labourers are often housed in conditions that breach a range of environmental health standards. Fire brigades across the country have reported the increased hazard that they describe as “beds in sheds”, where people are living in sheds, garages or other illegally flung together accommodation.

Migration allows employers to avoid providing training for their employees. Instead they import skilled workers, arguing that Britain needs migration because of “skill shortages”.

Even those who are unhappy with the scale of migration to the Uk often suggest that it is acceptable for Britain to allow the migration of the “brightest and the best”. How can it be right for Britain to systematically lure those people educated at the expense of a country less wealthy than us? See Why self-sufficiency in health matters for the negative impact of the worldwide movement of health care staff – the damaging effect are felt most often those areas of the globe with the greatest health needs.

It is no surprise that the rise in migration since 2004 has coincided with the biggest attack on further education colleges which typically have provided courses to young people (and older workers who needed to retrain) in skills such as electrical engineering, plumbing and information technology.

Remarkably, during the Second World War Britain managed to upskill its workforce in a wide range of engineering, chemical industry and other skills, despite most of the workforce being at war! All areas of further education were involved – including universities which facilitated scientific PhDs in record time to increase knowledge. Someone needs to sit down and write a list of the known skills shortages along with the available courses. If no course is available, developing one must be treated as a matter of urgency. Yes, there are skill shortages – but more importantly there is a shortage of will to address those shortages.

Lucrative and lethal

Superficially it looks as if the movement of people around the globe happens as a matter of individual choice but this ignores how it is done. Of course there are still people who move across the world for personal or family reasons. But there is a range of agencies actively engaged in moving the working age population – at one end of the spectrum they may well be acting legally (if often unethically) while at the other end there is a global crime wave which now pays better than shifting other cargo such as narcotics.

Within the EU, movement of labour is largely facilitated by labour agencies which are paid a fee per worker moved. There are limited controls on those agencies, which in turn may adopt illegal and unethical practices. For example despite it being illegal since 2014 for employers seeking labour for a UK workplace to advertise only outside the UK in the European Economic Area, politicians from all sides in the referendum debate conceded that there are still UK jobs which are not advertised in Britain.

‘We are now facing a criminal trade in people that is unprecedented in history.’

But much of the current population movement in Europe and elsewhere is part of a huge criminal network. The movement of population into and across the EU entered a new phase in 2015 following Angela Merkel’s invitation to migrants to settle in the EU. Initially this was portrayed as assistance to refugees from Syria, but more than 40 per cent of those who have recently sought asylum in Germany are from countries in the Balkans which thankfully have not seen conflict in 20 years.

Once migrants have made it into an EU country, the borderless Schengen system creates chaotic movements of people.

The wars created by Britain and the USA in the Middle East have generated a huge rise in refugees but the vast majority of these refugees are in Turkey or Lebanon or elsewhere in the Middle East. What we are now facing is a criminal trade in people that is unprecedented in history, with people smugglers and traffickers moving people across the globe.

People smugglers move people from A to B for money. People traffickers are involved in what is called modern day slavery in that they move people for money but in addition keep control of them at the point of destination, generally setting them to work for nothing. The traffickers enforce control with threats to their families at their point of origin.

Modern slavery

The UK began to wake up to the horrors of modern slavery in February 2004 when at least 21 Chinese cockle pickers drowned in Morecambe Bay. In 2015 a Modern Slavery Act was passed. A review of the act in 2016 found that 289 offences were prosecuted under the act in 2015, and that there had been a 40 per cent rise in the number of victims referred for support. In July 2016 the Anti-Slavery Commissioner suggested that the number of crimes being reported and investigated under the act was falling short of the real number of cases of human trafficking and modern slavery.

The route used by traffickers and smugglers across the Mediterranean is being actively controlled by Turkey in a deal with the EU by which Turkey blocks rather than facilitates the illegal trade in migrants. But it could change its position at any time Criminal activity has switched to the more dangerous route via Libya and more deaths of migrants. As at 5 December, recorded deaths of migrants in the Mediterranean for 2016 were 4,715.

The problem facing the countries of Europe is not a migrant crisis. It is a people smuggling and a trafficking crisis, which needs to be tackled. See related article Points of profit for the stages in the trade. At each stage there is a different set of criminals who work as a cell – take one stage out and the others continue.

Each country needs to deal with the stage relevant to the flow. Instead of imposing fines, Britain could start with imprisoning the employers using this type of labour and confiscating their assets.