Imagine Scott Morrison calling the policies of his own party of the past few years: “The same old broken model with low wages, low growth, low skills and low productivity, all of it enabled and assisted by uncontrolled immigration.”
Imagine a senior minister warning business they weren’t going to go back to “being reliant on the addiction, if you like, of cheap, unskilled labour from abroad”.
Imagine Morrison promising to substantially lift the minimum wage.
Climate isn’t the only signal difference between Boris Johnson and his Tory UK government and Morrison’s clutch of right-wingers. Johnson is embarking on an economic program that combines nativism and a rejection of core neoliberal beliefs.
Australia is at a similar moment in its economic history as the UK, albeit for different reasons: both face the challenge of whether to reopen their labour markets to foreign labour. Here it’s because of our pandemic border closure; in the UK it’s the implementation of Brexit that means it is now facing the consequences of closing off access to labour from the European Union.
And Australia is governed by a party controlled by big business, with its obsession with high immigration and low wages, and a governing class convinced of the need to keep immigration running at high levels.
The Johnson Tory government, however, appears determined to keep out foreign labour shut out by Brexit, and remove access by EU citizens to employment.
The result is, according to the latest data from the UK Office of National Statistics, annual pay growth in the May-July quarter of between 3.6% and 5.1%. The uncertainty is because the British data series is affected by changes in job composition resulting from the pandemic, but even the smaller figure is more than twice Australia’s current wage price index growth of 1.7%, and is a small rise from the result from April-June.
The result is also a significant supply chain crisis due to a dearth of truck drivers — traditionally an industry that relied heavily on European workers given the integration of freight and logistics in the UK into European markets. With a hard border between the UK and the EU, and British wages unappealingly low, the UK has found itself without enough truck drivers, forcing Johnson to issue visas to attract European drivers and deploy the army to deliver fuel.
Other industries dependent on low-skill, foreign labour, such as animal slaughter, have also suffered (cue warnings of insufficient turkeys and Christmas hams). And in aged care, where Brexit-induced staff shortages are exacerbated by a lack of fully vaccinated staff, the industry is pleading for Johnson to add all care workers to the government’s “shortage visa” list and lower the wage level at which they’re allowed to bring in foreign workers — a literal demonstration of Deputy PM Dominic Raab’s complaint of business being addicted to “cheap, unskilled labour from abroad”.
Johnson’s response is that shortages and lack of workers are temporary and that employers will have to learn to pay British workers higher wages — a radical idea coming from a Tory prime minister, even one as unconventional as Johnson.
Johnson is ideologically incoherent — to be generous — and certainly no ardent free marketeer: “Fuck business” was one of his less classicist responses to business complaints about the impacts of Brexit.
He also has a deep political need to demonstrate that there is some benefit to the UK from Brexit. Having exploited the tribalism generated by neoliberal economics and open borders with the EU during the Brexit campaign, he’s now pursuing a “hermit kingdom” wages and immigration policy that flies directly in the face of the neoliberal imperative to enable the free flow of labour to keep wages suppressed — despite warnings from the usual suspects that curbing immigration would harm the UK economy.
And his government is remarkably sanguine about the impact of worker shortages and higher wages on inflation, which the Bank of England (BoE) expects to top 4% by the end of the year. Business Minister Kwasi Kwarteng said at the weekend that the BoE would “take a view” and aim to curb inflation, but that “we need to have a focus on higher wages”.
Such words uttered by a Labour politician would have been roundly denounced as paving the way for a reckless return to ’70s-style stagflation. It’s even more extraordinary coming from the party of Margaret Thatcher — who Johnson deliberately echoed when he declared at the Tory party conference recently that “there is no alternative” to a high-wage economy.
But it also suggests the Johnson government is fully committed to countenance not just a rise in inflation but a rise in interest rates — perhaps a significant one — in its efforts to boost wages. What has widely been seen as a temporary blip in inflation may indeed turn out to be longer term — and that’s exactly what his government is aiming at.
One response from the UK business community was to suggest that business be allowed to bring in whatever labour it needed, but pay the same as British workers and face an additional tax to make migrant workers more expensive than British workers — a “market-led solution”, according to the proponent, Tory peer Lord Wolfson. That in theory would create an incentive to avoid relying on immigrant labour — if industrial relations laws can be properly enforced.
As the Australian experience with low-skilled migrant workers shows, that’s easier assumed than accomplished.
Tomorrow: rising minimum wages and rising employment.
“Other industries dependent on low-skill, foreign labour, such as animal slaughter, have also suffered (cue warnings of insufficient turkeys and Christmas hams).”
This is very poor reporting by Keane. He makes this aspect sound like a joke, while taking a (justified) swipe at the miserable media cliché of forcing a Xmas angle onto any story that can bear one, no matter how tenuous. The crisis in the UK’s abattoirs is huge. Private Eye has been reporting for months the dire consequences of the UK government giving one company, Eville & Jones (yes, really), a monopoly on providing veterinary inspection services to abattoirs. That company depends very heavily on exploiting cheap overseas vets. Warnings have all been ignored, no conmtingency plans made, and now abattoirs cannot operate even if they can get the truck drivers to deliver. There is the additional crisis from lack of other supplies such as carbon dioxide. The reult is not a mere shortage of some Xmas luxuries. Hundreds of thousands of animals that cannot be slaughtered for consumption are going to be culled and either incinerated or otherwise disposed of at enormous economic and environmental cost.
Couple of weeks ago, 4Corners, the contamination of the EU food-chain included a piece on the way Poland was “producing cheap meat” with vets going to remote abattoirs and only inspecting the heads of cattle, footage incuded obviously febrile fevered carcases. But if you’re not paid enough to care; if the place is so remote from prying eyes (even looking for you, within a 20 K radius of a by-products deparment); if the higher-ups had been bought; and you make sure you never touch the stuff, then who could blame them for not doing their job – probably good training for “Boris’ Merry Old Blighty”?
I hate to use a meat-related metaphor, but Johnson’s bad turkeys will be coming home to roost.
Such predictions have been made for years, long before he was PM. And yet his popularity is as high as it’s ever been. As the front cover of Private Eye put it months ago, and could justifiably keep repeating, ‘New Bombshell Sees PM’s Popularity Slump to Record High’
The UK, or at least England, seems to be genuinely delighted to be governed by an incompetent lying clown who has filled the cabinet with spivs and idiots while his decisions (or lack of decisions) have killed many thousands, set off an increasingly destabilising crisis in Northern Ireland, put energy supplies on the edge of collapse, sent the economy backwards, emptied the shops, crippled the central institutions of state, shattered the NHS, plunged the most vulnerable into destitution (twenty quid a week cut in already inadequate benefits), raised taxes to unprecedented levels and simultaneously shifted the balance of taxes from the wealthy to the poor. What’s not to like? Because, you know, That Boris, he’s such a cheerful cove, he makes me laugh…
What to expect from a country that has a House of Horrors (Lords) and has recently elected the 23rd PM from Eton school with a 19th century voting system. Also the latest polls show Johnson’s popularity subsiding after defying gravity for a long while.
Thatcher never won a majority of the vote (even in 1979) and thus never came within cooee of majority support, due to turnout rarely appraoching 2/3 of the electorate – the Brexit vote at 72% was the highest turnout in the last 100 years.
And never, ever did she top any popularity poll.
Nonetheless, with a complicit Moloch press she was the longest serving PM in over 200yrs – until knifed by her colleagues.
The UK seems to be suffering from “Mad Clown’s Disease”?
USA having the same problem with transport. Seaports jammed, cargo unable to be unloaded, lack of truck drivers and public in panic of emptying shelves. Prices rising. Will truckies and Dock workers get higher wages? Seems business not able to plan ahead as this situation was visible some time back. No contingency plans. Just in time method of supply chain not working during pandemic.
The usual reaction to talk of immigration suppressing wages is screams about xenophobia and racism. Then stats rolled out showing a net positive to the economy (or at least GDP).
Both the Tories and the LNP have been pushing high immigration while pretending they didn’t.
The LNP and Tories both dog whistle to those who are opposed due to racism – here we have a few “irregular” arrivals tortured as a distraction from the large numbers arriving via the capital city airports. In the UK the Tories had Brexit and now Patel is fulminating about channel crossings all while arrivals continue from Africa and the subcontinent – funny I thought racists were more triggered by people of colour…
Hilariously the UK now has proper labour shortages as EU citizens took the hint and moved home. I guess continuously telling people to “go home” actually worked – even if it was meant as a distraction.
In any case Australia is less addicted to cheap labour than the UK. High immigration seems more related to the Ponzi scheme where we tear down the capitals and rebuild them as fast as we possibly can.
In Oz we don’t appear to have the same reliance on cheap nannies, gardeners, cleaners, tradesmen, etc supporting the lower middle class lifestyle. We don’t have every surveillance camera manned by someone poised to issue a fine or every parking restriction policed 6am to midnight regardless of the weather.
As for Johnson – the sudden embrace of “high wage – high productivity” is more parking his tanks on Labours front lawn. It seems to be a pivot from courting racists/Brexiters as a distraction while doing nothing to slow non-EU immigration to stating a problem they created by leaving the EU as an opportunity. I wouldn’t read too much into it other than political opportunism.
The knock on from suspension of immigration for the last 18 months is yet to show itself in Oz. The property market hasn’t reacted rationally to the glut of apartments at least in Sydney. Perhaps that’s still to come?
“Meanwhile” there’s that report on Johnson’s “Covid management” did to the country…?