Tuesday 18 April 2017

Jonathan Portes and the strange world of the migration lobby.

I only read stories in the papers which are actually surprising.  Most of them aren't.  North Korea on brink of nuclear meltdown?  Really?  Donald Trump does something daft?  No!

But a couple of things in the Times this morning caught my eye.  This first was that in a story entitled "Plea for barista visas to keep coffee shops running", the Migration Watch head Lord Green is reported as arguing for two year visas for young people to help the hospitality industry.  I'm slightly suspicious of Migration Watch, and it was strange to find Lord Green saying something so liberal, and, it must be said, so daft.

The paper's Leader, probably written by Oliver Kamm, also had things to say about migration, and came close to acknowledging the flaw at the heart of the pro-migration case.

Those of us sceptical about the merits of unrestricted migration have argued for years that it has a distorting effect on the labour market. If you increase the supply of something the price of it tends to do down. Fine for the affluent like me who get cheap access to the service industries. A disaster for the low-paid however (and that's to say nothing about the impact on the NHS, school places or the availablity of housing).

Ah, say the pro-immigration types like the egregious Jonathan Portes, but this is to fall victim to the lump of labour fallacy, the idea that there is one fixed body of work to be done which does not grow according to the number of people available to do it. Migrants, argues Portes, create jobs by just being here.  Every 100 migrants who come to the UK create more than 100 additional jobs.

I once tried to get Portes to say how many jobs each 100 migrants create. This was on Twitter, so it was not a particularly sophisticated exchange. Portes would not (could not?) give a figure. He blocked me. Our exchange must have left an impression on him however because - I still follow him - he referred to me only the other day in an exchange with someone else, well over a year later.

Still, you get the picture. Migration is a great creator of employment.

That being the case, what would happen if you cut migration? It's obvious. The number of available jobs would start to decrease. If fewer migrants come to the UK, fewer jobs will be created and unemployment would go up.

This would, you might imagine, be the cry of those arguing for more migration. But curiously it is not. From all corners of academia and business the fear is not of higher unemployment. It is of a labour shortage.

What happens if there's a labour shortage? The price of labour goes up. The Times leader could not bring itself to acknowledge this. It warned of higher prices, but it could not bring itself to accept that this would be because people would be paid more.

The pro-migration lobby wants it both ways. More migration equals more available jobs. But less migration equals more available jobs too as there will be fewer foreign workers to fill them. It's an argument that the Mad Hatter would have been proud to own.

In the meantime the UK has nearly one million unemployed people under the age of 24.

If only we could be sure of more foreign workers to help them into the world of work!

PS Jonathan Portes has now started urging journalists to question Tory politicians about the "cost" of reducing migration to tens of thousands per annum. This has been predicted by the OBR to be in the region of £6bn p.a. Portes' enthusiasm for this idea has reached the BBC's Reality Check department, set up by the corporation to challenge "fake news". But hold on. The OBR's is a prediction. It is an economic forecast. Its value is pretty close to zero. Economic forecasts are there to be revised upwards. Or downwards. One can understand a lobbyist like Portes jumping on the OBR forecast like a ram on a sheep at tupping time; but the BBC? Don't they know what a forecast is? Apparently not. Not much of a Reality Check, but a pretty handy stick with which to beat the Government.