The focus of government, the media and organised labour on the ConDem Spending Review cuts to public service and welfare has included much talk of jobs, especially job losses.
But most people are ignoring the economic effects of the capitalist structures enshrined in EU agreements that ensure a “reserve army” of migrant labour. These include: EU free movement of labour; free movement of services, which allows EU firms to bring in workers from both inside and outside of the EU; and the secretive “Mode 4” trade commitments being made on our behalf in Brussels.
These regulations allowing corporations to cash in on wage differentials across borders mean that the earn/spend cycle in Britain, which is so key to economic health, is broken. Migrant workers may earn at the wage levels of one country and spend at the prices of another, but money taken out or sent out of Britain is lost to the British economy. In addition, the welfare bill increases as British workers are displaced – even where there is reduced access to welfare for the unemployed.
According to Polish academic research, 34 per cent of remittances to Poland have been coming from Britain. But another 34 per cent have been coming from Ireland – a very small country, with just 4 million people. Ireland is now broke. In contrast to much of the EU, including Britain, the Polish economy is not in recession. Migrant workers come of course from a wide range of countries, often harming the interests of their home countries as well.
A blind eye
Why do economists and economic reporters not recognise this factor in all the economic discussion and the pain of cuts?
Since the ConDem “immigration cap” was announced there has been silence on the concerns of the British public both on permanent migration issues, and on the separate issue of labour migration, which is generally intended to be temporary (although this is often not the case, as primary schools which have received unforeseen influxes of Polish children testify). These concerns are about jobs, job displacement and downward pressure on working conditions.
The cap confuses these separate concerns, which is politically convenient, while failing to address either.
In addition, there has been intense corporate and government propaganda over the past few months on the need to maintain the “rights” of transnational corporations to bring in workers. Corporations’ “Intracorporate Transferees” (ICTs) have been exempted from the temporary cap,
In fact the most important function of the “cap” will be not what it limits, but what it exempts; and the pressure is intense for ICTs to be exempted from the final form of the cap. EU member states’ commitments to allow the cross-border movement of people involved in the provision of services depend on national policy. The cap, with its limits, but more importantly its exemptions, will be our national policy.
Thus the cap is a huge trick, but one that has been very effective for some months in silencing concerns about immigration and labour migration, including in relation to the huge budget cuts and job issues, and, fundamentally, the national economy.
With so much superficial talk around of “opposing cuts” it is strange that so little energy is being applied to the clearly detrimental economic effects of replacing British workers with migrant labour.