Immigration & Welfare Reform

Unsurprisingly, Fraser made some sound points in his two recent posts on immigration. But the main lesson, surely, to be drawn from his argument is that the problem lies with British welfare policy rather than British immigration policy? Fix the former and some of the economic concerns about the latter might be reduced.

Then again, how much of the anti-immigration argument is actually predicated upon economics? Or, to put it another way, who counts as an immigrant? I rather suspect that there aren’t too many people terribly exercised by Australians or Americans or Frenchmen or Irishmen holding down jobs in Britain. Which, if true, would lead one to suppose that the “problem” is not foreigners per se but the wrong kind of foreigner…

Actually, according to the ONS’s most recent  Labour Force Survey, you’re still more likely to have a job if you were born in Britain than if you were born outwith the UK. That is, 74.1% of British-born people of working age are employed compared to 68.4% of those born outside the UK. The demonisation of immigrants – which, just to be clear, is not something I am accusing Fraser of – holds that they are a) stealing British jobs and b) welfare scroungers. Can they really be both thieves and scroungers? This seems unlikely.

Fraser argues that “Between Q1 of 1997 and Q1 of 2009, immigrants account for 106% of new jobs in the private sector – ie, there are more new workers (1.55m) than new jobs (1.47m).”  But since one in five workers are employed by the public sector this seems a pretty arbitrary and, I would humbly hazard, a potentially distorting measurement. (Incidentally, the government now includes all RBS and Lloyds Banking Group employees as “public sector” workers.)

Consider this chart (Table 8 of this pdf.), appropriated from Chris Dillow:

As Chris argues:

Does this mean foreigners are taking “British” jobs? Not necessarily. It might just show that the recession is bearing disproportionately hard upon firms that employ British workers; remember, recessions are about a minority of people suffering a lot, not about averages. And the recession is hitting some industries harder than others. Of the [net] 455,000 jobs to have gone in the last 12 months, finance has lost 187,000, manufacturing 212,000 and distribution and catering 198,000. I suspect these – and especially the firms hardest hit within them – employ disproportionately Brits. Other sectors (including construction) have been little affected, whilst the public sector has expanded.

A look at employment rates by country of birth shows that many foreigners have suffered more than Brits. Employment rates for Africans, Americans and workers from new EU countries have fallen more than those of Brits. It’s been largely people from the sub-continent who have found work. So, despite the sharp downturn in recent months, there are still more British-born workers in employment than there were seven years ago. True, the number of foreign-born workers has risen (although it seems to have flattened off recently) but only to the point that it accounts for roughly 15% of the workforce. That 15% includes, of course, the Indian doctor and the Philippino nurse who treated you last time you were in hospital.

Again, the greater problem is surely, as Fraser implies, Britain’s welfare policy, not its attitude towards immigration.

Politically, however, I wonder if Fraser is in danger of over-estimating the importance of the BNP. He writes:

But it does strike me that the best way to fight the BNP is not to ban its MEPs from the House of Commons (as our MPs are now trying  to do) but actually start learning about, and dealing with, the dynamics of migration. BNP support is the scream of the forgotten voter – and unless Westminster collectively starts to reach out to these people then the BNP’s success story may well have a good bit left to run.

This seems to give the BNP too much credit. I suspect there are more fans of Newcastle United in Britain than there are BNP voters. Just as I wouldn’t – sorry James! – pay much attention to the (frequently absurd) antics of the Toon Army so I don’t think that pandering to a party that attracts support – in a meaningless election to boot – from just 2% of the electorate is all that advisable either. Sure, not all BNP voters are necessarily racist but it seems pretty likely that much of the party’s support is predicated upon adverse economic conditions and the endless, if often tempting, search for someone else to blame. In that context, talking about immigrants “taking” British jobs seems an unnecessarily simplistic way of describing fairly complex economic and labour market patterns.

In any case, surely the “forgotten voter” is actually the voter who doesn’t vote at all, not the chap who votes for the BNP?