Socialist Worker

Migrants, shortages and wages

Some on the left say reduced numbers of migrant workers led pay to rise. Charlie Kimber argues the real cause of low wages and terrible conditions has been the failure of unions to fight for better

Issue No. 2771

Cleaning workers on strike in 2017

Cleaning workers on strike in 2017 (Pic: Guy Smallman)


Bosses in some industries are ­screaming about ­shortages of workers. They say there aren’t enough lorry drivers, there aren’t enough chefs, there aren’t enough butchers to slaughter the available pigs.

Supermarkets struggle to fill their shelves, Nando’s had to close 45 of its restaurants because of a chicken shortage, McDonald’s didn’t have enough milkshakes.

Some companies have—imagine the horror—even had to offer higher wages and bonuses to attract workers.

Socialists and trade ­unionists should warmly welcome any opportunity to squeeze more from firms that have grown fat on cheap labour.

For far too long workers have faced pay freezes and cuts. Now it’s time to hit back.

The Financial Times fears that present developments could see a long term trend “tilting the balance of negotiating power from capital towards labour”. Good—if it happens.

But there’s a row about why there “aren’t enough” ­workers, and it matters because the answer shapes the strategy for workers to win in the future.

One answer is that Brexit’s chaotic disruption of supply chains shattered the normal running of the economy.

There’s little doubt that the Tory version of Brexit has caused bottlenecks and obstacles to the distribution of goods.

Disruption 

The government’s—and the European Union’s—obsession with borders has caused some disruption.

But claims of worker ­shortages are also reported in the United States, France, Germany, Italy, the Netherlands and Scandinavia. And they are in similar sectors to Britain—hospitality, distribution, construction, health and social care.

So it’s not just about Brexit. And bosses were complaining about shortages well before the EU referendum.

British workers don’t benefit from less immigration
British workers don’t benefit from less immigration
  Read More

In 2015 the bosses’ Road haulage Association said there was a shortage of 50,000 lorry drivers.

The second major reason put forward, linked to Brexit, is the fall in the number of migrant workers.

Some on the left say rising wages now proves that migrants are a drain on native ­workers’ living standards and that ­cutting their number works to boost pay.

Brexit, they say, is therefore good for workers because it has cut immigration.

Certainly large number of workers originally from EU countries have left Britain in the last 18 months. But most workers have not seen a rise in wages.

Typical hourly wages ­advertised for cleaners, for example, have increased by 20p since March. But that just reflects the minimum wage rise of 20p an hour in April. There’s been no surge in pay rates.

And most public sector ­workers face a pay freeze or a below-inflation “rise”.

Justify

Left wingers who say fewer migrants have boosted wages often quote Karl Marx’s analysis of the “reserve army of labour” to justify their position.

Marx spoke of an “industrial reserve army” which plays a role in stepping up competition between workers and pressures them to accept lower pay.

Marx explained that ­capitalism is the first economic system where there are “too many” people and that some can’t be profitably employed. As capitalism expands it tends to spend relatively more and more on machinery and technology, and less on workers.

Marx spoke of an “industrial reserve army” which plays a role in stepping up competition between workers and pressures them to accept lower pay.

A portion of potential ­workers is surplus to capitalism’s ­requirements. Marx adds, “This surplus population forms a disposable industrial reserve army, that belongs to capital quite as absolutely as if the latter had bred it at its own cost.”

Take away the “reserve army” of EU migrants waiting to work for low wages and hey presto, goes the argument, there is a shortage of workers and wages go up.

But the main industrial reserve army in Britain is not migrants.

It’s the 1.6 million officially unemployed and the 1.8 million on the furlough scheme.

But no socialist would say the unemployed are the enemy of workers. Instead the argument has always been to unite employed and unemployed against the bosses.

Marx argued that ­workers must ­“organise a regular ­cooperation between employed and unemployed in order to destroy or weaken the ruinous effects of this natural law of capitalistic production on their class”.

Unity is equally necessary between migrant workers and workers born in Britain.

The central reason why bosses find it hard to recruit is not Brexit or curbs on migrants but low pay and rotten conditions.

Sarah O’Connor writes in the Financial Times that lorry drivers’ average hourly wage is now just £11.80. And this is for a job that requires a qualification and training that workers often have to pay for themselves.

O’Connor quotes a job advert from logistics firm XPO. “You’ll be working a minimum of 45 hours per week on an ‘any five from seven-day’ shift pattern, so your working days may change each week and could include weekend working.

“You will also be starting early AM and must be prepared to work through the night.”

No wonder you might not rush to fill that vacancy.

British wages have declined sharply as a percentage of gross domestic product since the mid-1970s.

The percentage going to workers fell from 1974 as the Labour government attacked workers and militant rank and file organisation declined.

The fall continued for much of the Tory Margaret Thatcher years, and then slumped again after 1984 and another recession.

Average wages have only just returned to the level of 2007-8, before the financial crash.

It’s about class power.

A low level of resistance ­enables bosses to force through poverty wages. Think of how many employers have felt able to make outrageous fire and rehire demands during the pandemic. They have insisted on pay cuts as the condition of workers keeping their jobs.

And far too often, such as at British Gas and JDE coffee, bosses secured what they wanted. Workers fought bravely against the deals, but union leaders let them down.

A low level of resistance ­enables bosses to force through poverty wages. Think of how many employers have felt able to make outrageous fire and rehire demands during the pandemic.

Low pay also stops migrants coming to Britain. Contrary to the myth, most won’t rush in and work for whatever bosses will offer.

Samuel Tombs, of the ­economics consultancy Pantheon Macroeconomics, points out that there are EU nationals who returned home during the ­pandemic last year who could come back to Britain if they wanted.

“Legally, most of these people can return if they wish. Indeed, applications for ­pre-settled and settled status have exceeded the official number of EU nationals in Britain at the end of 2019,” he says. But, he adds, “their enthusiasm to return is low.”

Survive 

If there is a long term squeeze on wages, what’s special about the situation now?

There are two temporary factors. The first is that the end of pandemic restrictions means bosses all try to recruit at the same time. This creates shortages.

The second is that, however inadequate, furlough schemes and similar measures have enabled quite large numbers of workers to survive—just— without working. They are under less pressure than if they had been sacked.

But all these schemes are now ending.

Across the world, ruling classes will try to use the renewed threat of unemployment to bear down on wages.

This was expressed most ­brutally by US Fox News host Laura Ingraham. Enraged by people who are reluctant to brave Covid-19 and return to work, Ingraham said, “What if we just cut off the unemployment?”

As she noted, “Hunger is a pretty powerful thing.”

The Tories are not quite so blatant, but it’s the same message.

Business secretary Kwasi Kwarteng recently told employers that as the furlough scheme ends “many UK-based workers now face an uncertain future and need to find new employment opportunities”.

The Tories hope workers who are ditched now will be so desperate to avoid the horror regime of meagre benefits, sanctions and poverty they will accept low pay.

The end of furlough and the simultaneous £20 a week cut in Universal Credit is not an unfortunate accident. It’s a strategy.

All of this means that unions and the left need a strategy for overturning the squeeze on wages.

It’s not much of a plan to hope for the present labour shortages to last forever.

There is no effective ­alternative to resistance, struggle and confrontation. Instead of obsessing about migrants, the left needs to concentrate on fighting bosses and the Tories.

We need more of the best form of “labour shortages” which can really improve wages and conditions—strikes,


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