Wednesday, 8 January 2014

Nigel Farage Shows His Conservative Side

If you said to me, would I like to see over the next ten years a further five million people come in to Britain and if that happened we’d all be slightly richer, I’d say, I’d rather we weren’t slightly richer, and I’d rather we had communities that were united and where young unemployed British people had a realistic chance of getting a job.

I think the social side of this matters more than pure market economics.

I've long hated the word "communities", because most people no longer live in "communities". Eastenders and Coronation Street, societies where neighbours work together and go down the same pubs and shops may suit the needs of soap opera writers, but in the real world, we don't live like that any more. We really haven't lived like that since the late 70s when car ownership took off and we had more choices. People are far more atomised in terms of work, rest and play, and anything you do is not going to change that because in reality, that's how people want it.

To talk of "united communities" ignores the fact that people unite when they have to or want to, and I don't believe that the "social side" matters that much in those situations. OK, when we had actual communities, things like trust mattered more. You couldn't go stiffing the bloke who lived 3 doors down from you. But when you have people moving around the country for work, what difference is there between a Pole and a Welshman?

I'm not against the idea of restricting people based on economics - that if you don't, people will come here to live on benefits, but I have problems with the idea of the "social side", because I've generally got on just fine with all the immigrants I've met, whether Polish, Pakistani or American. What's the concern about the "social side"? That we'll end up being ruled by Sharia Law? If history teaches us anything, it's that the effect of the majority in an area is far more powerful on the immigrants than vice versa. What's the biggest effect on the white population of Asians coming to the UK? We now have lots more people who are good at programming? We have replaced fish and chips with chicken tikka masala? But on the other side, the impact has been far greater. Indian households have adopted western attitudes to sex and marriage. Sure, they may still get married at the Sikh temple, but they probably chose their husband, and probably had boyfriends growing up, unlike their mothers.

And as for getting young, unemployed people into a job, you do that by reforming the benefit system. People from Eastern Europe shouldn't stand a chance with applying for service jobs compared to British people for whom English is their first language but there's lots of them in Starbucks and Costas. The problem is simply that a lot of people won't take a minimum wage job when they can live on benefits.

26 comments:

Bayard said...

"The problem is simply that a lot of people won't take a minimum wage job when they can live on benefits."

I think you need to paraphrase that: "The problem is simply that a lot of people can't afford to take a minimum wage job when they live on benefits." If we had a CI and capped HB at social housing levels, then this wouldn't be a problem.

Mark Wadsworth said...

TS, Farage is not completely wrong on this.

You are right to say that there are no idealised "communities" like in the soap operas, however, when you are 'on the doorstep' people always talk about 'foreigners taking our jobs'. There is still a national, overriding sense of community.

It disturbs people slightly. They might be racist or economically stupid, but that's the way it is.

And to be honest, the economic benefits of carefully screened immigration are quite big but will not magically turn the country round, and it's a short term effect - those ambitious immigrants have children no better or worse than the native Brits.

And there is no benefit to uncontrolled mass immigration.

Also I second what B says, and will pre-empt DBC Reed's comment - foreign workers not only put up with shit wages and conditions but are also prepared to share small accommodation, that's what really gives them the edge in London, where they famously sleep six to a bedroom, allegedly.

Kj said...

What Bayard said. Other than that, sort of agree but still not. That "communities" in the wider sense of social cohesion, trust and so on is no longer important is not true. It may be true that it´s less so in your immediate surroundings because of labour mobility, but it´s still relevant in day to day dealings. I think it´s a gradient, and the results of too rapid demographic changes probably has some predictable effects as shown by Putnam. The whole process before "cultures" that are quite different equalise into some sort of common ground or whatever isn´t entirely without a cost to both parties. Even if you are right that the host country culture seem to win out in the long run.
That´s not to say that *that* is the reason to restrict immigration as professed by Farage, or that there aren´t policy choices we can do to mitigate this, but it is what it is.

As a nomad like everyone else, I´ve lived in different parts of the same city, and the one where you did know more neighbours, and that people were more "invested" (sorry for using tory/homeyspeach here), was indeed more pleasant and liveable. It didn´t have that much to do with immigration/background demographics though, in part because these parts were mixed but very well integrated. You can make the mistake of thinking everything is okay because most mixed communities work fine, when the ones that don´t are the ones that people are generally fleeing, including the not-so-recent immigrant.

Kj said...

MWIt disturbs people slightly. They might be racist or economically stupid, but that's the way it is.

Exactly. It might just be because we´re human, evolved to deal with in-groups, and even if we can adapt quite well, it just takes a bit time. I know older people who´ve changed a lot from being pretty down right racist in the 80s, when immigrants here was in it´s beginning, to not being so now.

The Stigler said...

Bayard,

Yes, I should have phrased that better.

Mark,
"You are right to say that there are no idealised "communities" like in the soap operas, however, when you are 'on the doorstep' people always talk about 'foreigners taking our jobs'. There is still a national, overriding sense of community."

I don't entirely agree. When people have an opportunity to express that preference, by buying British goods and services that cost more, they generally choose not to. What those people are really saying is "I want my job protected", but they can't exactly say that, or it sounds selfish.

Kj,
" The whole process before "cultures" that are quite different equalise into some sort of common ground or whatever isn´t entirely without a cost to both parties. Even if you are right that the host country culture seem to win out in the long run."

But one question is how much "culture" in a geographic or regional sense matters now, and whether we now have more in common with individuals within geographic countries than outside of it.

I've worked with Indian, Czech and American nerds, and they're more commonly joined by their nerdishnesss than separated by their languages. And it seems to me that French, German and Italian fashion designers are far closer to each other than the average French, German or Italian. You could probably take a bar owner from France and put him in charge of running a bar in England and he'd do a better job of running it than I would.

DBC Reed said...

To the problem that a lot of people won't take work on the minimum wage when they can live on benefits the answer is surely :put up the minimum wage to the living wage level (as unnervingly some Tories are saying now).
Also I agree with myself above: the uncontrolled market in landed property means i) unemployed cannot move where there's work because accommodation is too expensive ii)Brit workers with families cannot access the multi-occupied places single immigrants can put up with.
This is not "allegedly": Lithuanians across the road from us lived nine to a three bedroom house.And damn good too : they were terrifying and literally chased off all the kids lurking about who were a flaming nuisance.

Mark Wadsworth said...

TS, we are talking at cross purposes.

Thee and me are the metropolitan liberal elite, on the whole we like foreigners - because mainly we only meet nice ones, interesting ones, hard working ones etc. And we tend to meet them as individuals in our own social or business circle, not as whole groups.

If you lived on a council estate and only met Jamaican drugs dealers, hardcore Muslims, nine-to-a-house Lithuanians, dodgy Indian landlords, eastern Europeans who've "nicked our jobs" and so on, we might take a dimmer view.

Lola said...

DBC Reed. I think although I am not sure, that it is the other way about. That is putting up the MW just pushes up costs of business and living and we are back to where we started. Trouble is 50% of the MW is taken in tax. So just as easy to cut taxes by 50% and add 25% to the purchasing power of the MW.

Also, I'd be quite happy to sleep 6 to a room if the other five were Victoria's Secrets models (or similar approved). Mind you, I'd be dead in a week.

Lola said...

MW. A Miss Lola whilst at Uni rented a room in an ex council flat (possibly bought, but she was never quite sure) from the most appalling West African immigrant git. That would be one of thems that we rail against.

Bayard said...

'Twas not that long ago (well, fifty years or so) that us Brits were quite OK with sharing a bedroom, but the sexual revolution put paid to all that. Not that it would make much difference anyway: it's only because the majority won't share that the minority can cut costs by sharing, otherwise the extra rent-paying power of the bedroom-sharers would just put the rents up.
DBC, I have seen figures that show that if you raise the tax-free allowances so that full-time minimum wage-earners pay no taxes, then the minimum wage becomes the living wage, in respect of take-home pay.

DBC Reed said...

@Lola
Given that as well as costs of supply there is also the problem of the level of demand, I would have though we have gone far enough with keeping wages down.I was very surprised to see Godawful Tories on Newsnight last night agreeing that the Minimum Wage should go up .Also Cridland, the CBI bloke, has been telling his members they can well afford to put wages up.There is some talk now that the reason we are edging out of recession is that far from making cuts Osborne has increased spending on public sector wages (and a housing bubble)rather than delivering the Austerity he proclaims.The only argument with Labour is that the Conservatives have directed the increased spending and borrowing at less than deserving people.

Lola said...

DBCR. Well, as an employer, the MW is definitely discouraging me from giving a first job to an a low skilled person. I have someone in mind who lives at home and could well do with some work experience to get her going and I have a job she could do, but the MW means that I cannot justify employing her and I will find another way of sorting out the issue I have. From personal experience therefore MW destroys opportunity for new and low skilled workers.

The Stigler said...

Lola,

Living/minimum wages are just a really bad idea. If "society" wants people to have a certain amount to live on then "society" should pay for it. If someone's labour is only worth £5/hr, that's what it's worth. An employer isn't going to pay £7/hr to get £5/hr in return.

Mark,
I admit that I probably move in circles of nice immigrants, but we're not talking about hardcore religious types in terms of economic gain, are we?

DBC Reed said...

@TS
An employer also is n't going to pay £7 an hour if there is only £5 aggregate demand in the local economy.If everybody pays £7 then total demand goes up to that level and the pay increases are covered by increased sales.Henry Ford demonstrated this ,probably not intentionally,when he saw to it that his workers could afford cars.

Mark Wadsworth said...

DBC, Ford claimed - after the event - to have had that as a policy but in fact he did nothing of the sort. He paid his workers well because it was shit boring work and he preferred better pay and stable workforce to unionisation.

As TS says: "If "society" wants people to have a certain amount to live on then "society" should pay for it"

Which makes perfect sense. Let us assume that higher incomes => higher aggregate demand => more jobs etc, in which case it is ultimately self-funding.

But for each individual employer there is a first mover disadvantage.

So... rather than try and force employers to pay more and choke things off before they get started, just have a Citizen's Income funded out of general taxation (and preferably out of LVT).

That gives you the higher incomes and demand, even if wages per hour fall slightly.

Derek said...

MW: So... rather than try and force employers to pay more and choke things off before they get started, just have a Citizen's Income funded out of general taxation (and preferably out of LVT).

That gives you the higher incomes and demand, even if wages per hour fall slightly.


And funnily enough that was close to what happened at Ford. As it happened Detroit from the 1900s was run by Georgists who did their best to implement an LVT/CI solution within the constraints of tax law at the time. That was one of the reasons that Ford set up shop there. It was only after WW2 that the introduction of "business-friendly" sales and income taxes started to kill off Detroit. See http://inequality.org/progressive-tax-system-detroit-powerhouse/

Kj said...

TS: On a very mundane level, yes, cultures based on origins still matter, even if you may have more in common with someone on the other side of the globe in terms of specific interest. You have customs, codes, feedbacks etc. that makes things run smoothly for society as a whole. This can probably be aquired by just about anyone, but that depends on education, contact with arenas shared by "natives", like work, and polishing off some of the more incompatible bits. If you have a large enough subset of the population that is more or less separate from the dominant culture, and no plans of changing the tax/welfare system so that more people take part in the economic arena, it´s probably wise not to increase that subset of the population even more, at least reduce the speed somewhat. An increase in votes for BNP-style (and the softer variant) parties in western europe is an outcome of what MW says.

L fairfax said...

@"What's the biggest effect on the white population of Asians coming to the UK? "
The biggest effects for me were the bombs in 2005 and the death of freedom of speech 14/2/1989.
When we found out that there are people in this country who listen to the Ayatollah Khomeini

DBC Reed said...

Has anyone read Jesse Myerson's "Five Economic Reforms..." in Rolling Stone? (Like the old days when RS was radical).LVT (tick ) CI (tick)public banking North Dakota style (I'd tick ) sovereign wealth fund (KJ might tick).The fifth is a guaranteed job in public sector.Not sure about this but it might address the first mover disadvantage facing private sector in raising real wages from current slump.

Mark Wadsworth said...

DBC, I've skim read it and gave it tick, tick, lukewarm tick, cross(1) and cross(2).

1) While Sov Wealth Fund might (or might not) be good idea, we currently have a NEGATIVE SWF in this country (accumulated debt) so let's pay that off first. That idea gets a tick from me.

2) And guaranteed jobs is probably a waste of money. If you had LVT and CI you'd get full-ish employment anyway.

Mark Wadsworth said...

DBC, I've skim read it and gave it tick, tick, lukewarm tick, cross(1) and cross(2).

1) While Sov Wealth Fund might (or might not) be good idea, we currently have a NEGATIVE SWF in this country (accumulated debt) so let's pay that off first. That idea gets a tick from me.

2) And guaranteed jobs is probably a waste of money. If you had LVT and CI you'd get full-ish employment anyway.

Kj said...

DBC: read it, and I assume that it´s obvious what I´d tick and what not ;) A SWF is just a necessity for macroeconomic reasons for the few countries/states that have far too much money from natural resources than they can spend in any one year without causing a bit of trouble in the economy. I don´t see why normal economies should have one, except for putting away surpluses in good years and using in crap ones. Another problem with SWFs is that they are even worse than most institutional investors, and pretty much just bid up existing market instruments, acting as the big elephant in the ecology/room of the stock market. But what to do with all the cash instead is anyone´s guess.

Lola said...

KJ - Exactly my experience for SWF. And they are usually run by huge cronies of whomever happens to be power and at vast wages.

DBC Reed said...

Meanwhile Red Osborne, the master of Borrow and Spend, has just said he'd like to see the Minimum Wage go up.

Bayard said...

It seems very simple to me: the UK is competing for jobs in a global economy (apart from the things that can only be done here, like constuction, any small employer is at the risk of being out-competed by imports and any large employer has one eye on moving his manufacturing overseas to a country with cheaper labour). Thus anything the government does to increase the cost of labour by taxation or legislation like the minimum wage, is going to make the UK less competitive compared to places overseas, which means we are going to lose jobs to other countries.
Have I missed something and, if not, why can't the likes of Red Ed see this?

Derek said...

That's true as far as it goes, Bayard but I think that there are two more things to bear in mind.

Firstly there are four ways to make our exports globally competitive: we can reduce labour costs or we can reduce capital costs or we can reduce rent costs or we can reduce some combination. The human cost is much lower if we concentrate on reducing rent costs via LVT or capital costs via some sort of bank loan tax or the like than if we concentrate on reducing labour costs via abolition of the Minimum Wage or whatever, so I'd prefer to concentrate on reducing rent costs first.

Secondly, not all jobs in Britain are export jobs. Doctors, police, brickies and checkout operators are the sort of job that I'm thinking of. Minimum wage legislation for these jobs is only going to have an indirect effect at most on the UK's international competitiveness. So you need to look at the mix of "internal" UK jobs and "export" UK jobs to see how significant the MW actually is.

Having said that, the MW is a second-best solution to the low-wage unemployment problem. A Citizens Income would beat it hands down.