You could be forgiven for thinking that the end of restrictions of movement on Bulgarian and Romanian nationals within the EU from 1 January is the most important thing happening in Britain right now. It has certainly caused a frenzy of political and media comment, much of it pure speculation fuelled by some frankly idiotic numbers. “29 million Romanians and Bulgarians” entitled to settle here, scream UKIP leaflets; sonorous pronouncements by politicians about “benefit tourism” and “health tourism” when neither of these exists to any considerable extent.
At one level this is all about the lowest politics; that of a Tory government presiding over the fastest-falling living standards in more than a century, petrified by a fear of UKIP on the right, and with its election strategy led by the man who engineered the rise of race-hate as the defining face of Australian politics. But it’s about much more than that.
John Harris, in today’s Guardian, points out that in some respects there is a classic divide here between the grass-roots politics of anti-immigration and anti-Europeanism and the elite politics of those who point out that, in macroeconomic terms, immigration has always been good for the economy; a view that conflicts with what he perceives as the direct experience of people who have lost their jobs to lower-paid (and in many cases illegally-paid) immigrant workers – although he acknowledges that it’s horribly difficult to obtain any hard evidence.
But Harris does make the essential point: that at heart this is a debate about the increasing insecurity of low earners; the casualisation of low-paid work and the dysfunction of the housing market, especially the bottom-end of the rental sector. This is about the economics and politics of the race to the bottom.
Labour is now talking increasingly about low pay and the cost-of-living crisis – and in my view entirely rightly so; and as I’ve suggested before it’s a radical narrative, because it asks the important questions about who political and economic activity are for. It’s now becoming apparent that the squeeze on low pay in particular pre-dates the coalition and could go back as far as 2003-4; and the question is being asked increasingly about the role of workfare-type schemes in leading to that.
From a theoretical view the point is obvious; if employers are able effectively to employ staff for free under work-for-your-benefit schemes, that will bid down real wages. The effect on people in low-paid, unskilled jobs is therefore exactly what its critics claim immigration is doing. The difference, of course, lies in the politics and the rhetoric; on the one hand people on workfare schemes are ending the something-for-nothing culture, on the other low-paid immigrants are perpetuating it. But of course what is true in both cases is that employers are reaping the short-term benefits of falling wages – in the case of workfare through a deeply anti-competitive form of state aid. But the political debate is configured in a way that avoids that equivalence is obscured.
I think the only way through this is to understand that at heart, this is a debate about low pay, and about what looks like the increasing inability of late capitalism to generate a living wage for its workers. It means getting away from the toxic debate being waged between Tories and UKIP, and asking the fundamental questions about raising pay and shifting the balance of rewards from rentiers to wage-earners. It means admitting that workfare schemes are economically counter-productive as well as morally wrong. And it means, above all, not letting the Right set the terms of the debate. The extent to which Labour leaders can get a grip on the issues without following Lynton Crosby’s narrative may yet have a big effect on the 2015 election.