Friday, June 6, 2014

Peter Saunders from the UK: Free movement of labour bad for Britain's youth

More than a quarter of British people who voted in the recent elections to the European Parliament voted for the UK Independence Party (UKIP). I was one of them. UKIP wants Britain to leave the EU. It also supports immigration controls in place of the free movement of labour required by EU membership.

A left-wing friend challenged me on this. Wasn't I being inconsistent, arguing in favour of free   markets yet voting for a party that wants to shut down Europe's free market in labour? My answer was that free movement of labour worked well when EU countries were at roughly comparable levels of prosperity (which was the case when the European Economic Community was first set up). But today, the EU encompasses poor countries as well as rich ones. Romania's average wage levels are about one-fifth those in Britain.

A free EU labour market is great for bright, enterprising Romanian workers, who can go to Britain and earn more money. It's also good for UK employers, who get good workers at a low price, and UK consumers, who can buy cheaper goods and services as a result.

But it is bad for hundreds of thousands of young, relatively low intelligence, poorly-educated,   and often lazy Brits with no social skills. They won't and can't compete for the low-level jobs in McDonald's which Poles and Bulgarians are now doing, so they end up on welfare instead.

If Britain didn't have a welfare state, free movement of cheap labour from poor countries might work, for Britain's poorly-motivated youth would have no choice but to compete for whatever low-level jobs are on offer. But with a welfare state, unrestricted immigration cements them into long-term, large-scale welfare dependency instead.

A few years ago I wrote two Centre for Independent Studies papers (available here and here) addressing the problem of finding low-skill jobs for low-ability youngsters to do. I argued that if we want to push poorly-motivated youngsters of limited ability off welfare and into work, we have to ensure there are enough routine, low-responsibility, low-skill jobs for them to do.

Countries like Australia and Britain have seen millions of these jobs disappear in recent decades due to global competition (the Chinese are doing them) and new technology (machines are doing them). The minimum wage doesn't help, either, with wages often set above the value of the work that might potentially be offered.

These problems are made even worse if the low-skill jobs that remain in the country all get taken by keen, young immigrants. It's great having bright, polite Poles serve me my Macchiato in Costa Coffee, but it means idle British-born kids are rotting their lives away on benefits.

So unless Britain is prepared to scrap its welfare state (unlikely), it needs an immigration policy like Australia's, where you can come in only if you can offer skills the economy needs.

The crunch problem, however, is that Britain is not allowed to introduce an Australian-style strategy of selective immigration based on skills. Australia can do this, because it is a sovereign country. But as an EU member, the UK no longer has the freedom to make such decisions.

Professor Peter Saunders is a senior fellow at The Centre for Independent Studies. 

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