A couple of years ago Labour were telling us that there'd be no recovery under Osborne's Plan A. Then when it turned out there'd been no double dip recession (let alone a triple dip) and that the economy was growing strongly, Miliband told us we were having the wrong sort of recovery. Now when it turns out that Britain's economy is one of the fastest growing in the industrialised world, he is telling us there's a cost of living crisis because wages are low and stagnating.
Miliband is right about wages, and he's been right for quite a few years, certainly since well before the 2010 general election. He didn't seem quite so concerned about it then.
It must be rather galling for the Tories to hear this latest attack on its handling of the economy. During the Blair / Brown years Britain accepted about 800,000 migrants from Eastern Europe. The Government's own figures show that over 50% of new jobs created went to people born outside the UK. In London the figure is over 80%. Leaving aside the cost to the UK of these hard-working young people in terms of health, education, housing and general infrastructure (not to mention the cost of keeping on benefits the British people - many with brown skins - they displace from the labour market), there is also a cost in terms of wage levels.
If you increase the pool of available labour, the cost for employers of acquiring staff rises less quickly than it otherwise would have done. That's why the CBI is in favour of immigration. Businessmen know that, as with any commodity, you increase the supply and the cost tends to go down.
In other words Labour's decision to allow the citizens of new EU nations to work here in 2004 is partly responsible for lower wages, and therefore for the cost of living crisis for which they are now blaming the Tories.
Miliband's solution to this problem his party helped create is to urge companies to pay their staff more. But as many economists have pointed out, the only consequence of this would be fewer people in work. Companies become less competitive, they push their prices up, they sell fewer products and have to lay off staff. Thus the people who keep their jobs benefit, but others get pushed onto the dole, where the state has to pay for them. Increased wealth for some rather than for all hardly seems like a Labour policy.
Miliband's idea, like his plan for an energy price freeze, is economically illiterate. Which raises the question why he is saying these things. As I keep pointing out, the Labour leader is said to have taught economics at Harvard. I'm presuming then that he understands the mechanics of supply and demand. The only explanation I can think of for his pushing policies that defy economic credibility is that he is a cynical opportunist.
Undoubtedly most people don't know enough about economics to understand why wages might stagnate, and why it's so hard to get them to rise again when you are importing a work force at the same time. This looks like naked populism by Miliband - I suspect he knows these policies won't work, but he also knows that a lot of people like the sound of them.
I still believe that Labour will win the next election. But judging by the increasingly desperate implausibility of his policy initiatives, I'm not sure Ed Miliband does.
