Good News or Bad News ?

"Jon Venables could be murdered if identity revealed - judge"

Is that an argument for or against ?

Yazza - She's At It Again ...

I must confess that I haven't noticed an enormous surge in anti-Muslim rhetoric or action by "the establishment" recently. Indeed, after 9/11 and 7/7 their response was to visit mosques, give them extra police protection, talk a lot about a religion of peace and even define terrorism as "anti-Islamic activity".

But then I'm not as close to the establishment as Yasmin Alibhai Brown. Apparently the Chilcot enquiry, the sentencing of various hotheads for rioting, vandalism and attacking the police during a London demo, the Channel Four documentary on Islamic 'entryism' in East London politics, and, er ... er ... - well anyway , as Shameless Milne puts it, this tide of anti-Muslim hatred is a threat to us all.

The Yazztastic One cranks up the threat level as only she can. After all, I doubt that Shameless hangs out with many Muslims outside of his political activity. And I bet he doesn't pray before starting his column.

I can see that for the British establishment Muslims are contemptible creatures, devalued humans. As I prayed before starting this column I felt tears stinging my eyes and my face was burning as if I had been slapped many times over. Do they expect me to turn the other cheek? Millions of other Muslims must have felt what I did. And some may well go on to do things they shouldn't. Their acts will intensify anti-Muslim prejudices and will be used to justify injustice. The cycle is vicious and unrelenting.

Oh dear.

Once again at weddings and birthday parties, in quiet, tranquil mosques, at dinner tables across the land, including those of millionaire Muslims, I am hearing murmurs of trepidation and disquiet – voices kept low, sometimes vanishing into whispers, just in case; you never know if they will break down the door. These people are, like myself, well incorporated into the nation's busy life. Some own restaurants and businesses, others work in the City or law firms and chambers. At one gathering a frightfully posh, Muslim public school boy (aged 14), an excellent cricketer, said in his jagged, breaking voice: "I will never live in this country after finishing my education. They hate us. They'll put us all in prison. Nothing we do is OK. Do you think I am wrong Mrs Yasmin?" No I don't, though his hot young blood makes him intemperate.

Where do I start?

No, where do I start ? I can just see the Met top brass salivating at the thought of breaking down a few Muslim millionaires' front doors, can't you ? Excellent career move.

We're back in familiar Yazza territory :

"This week, I have been at three events where the majority of people in the audience were educated, sharp Muslims, some exceedingly rich and good friends with key politicians and Prince Charles. Guantanamo Bay and Iraq are topics that now madden even these establishmentarians.

One gentleman took my elbow, shuffled me to a discreet corner and whispered 'I have been here for 40 years, dined with royalty. Today, if I was young, I would go straight to Bin Laden. Mr Blair is a war criminal. Don't put my name down, but tell him we detest him'".

One of the things I love about Yazza is that she shoots straight from the hip. Can't say we've not been told. Pray God that she is, while wonderful, a self-centred hysteric with a 56-pound chip on her shoulder, unrepresentative of the wider Muslim community. Because if she's right that millions of Muslims feel anything like she does, there is indeed cause for concern.

Glorify the Father, The Spirit And The Son

Recorded in Toddington Church, Gloucestershire, though I can't hear any steam trains.


Ex-Sinfonye operative Jocelyn Montgomery (nee West) has some impressive (if somewhat gothic - that Nick Cave has a lot to answer for) new music out - Salt Birds. Just be careful you don't head too far in this direction, m'dear. As Lovecraft would say 'that way lies madness and the void'.

More Flag-Flappers

Remember Gordon 'Union Jack' Brown ?

Remember when 'Britishness' turned out only to apply to England ?

It looks as if our rulers are giving up on 'Britishness' and worrying more about 'Englishness'. John Denham MP on England :

"the next election will be determined by which party has the most convincing story about our society and our country. Who has the most convincing tale about where we have come from: and the most positive and optimistic story about where we go next."

So it's all a matter of good PR, you see. The trouble is that the most convincing tale about where we have come from will definitely not provide a positive and optimistic story about where we go next.

These stories work because we have a sense of who we are; what our society represents. Put a different way, people ask politicians to pass the ‘people like us’ test.

Keep digging.

"... at once progressive and patriotic ... Billy Bragg ... Morrissey ... multi-ethnic identity ... white working class ... disconnect ... zzzz"

This is the nub. Been here before, of course.

The problem of multi-culturalism was not its insistence on respect for those of different cultures, or of their freedoms to express themselves as they wish: it was the neglect of the glue that binds us together; it was the failure to recognise a multi-cultural society can only work if there is equal engagement and activity in building and developing shared values and the framework of a shared identity which enables us to be multicultural within a cohesive society.

Or to put it another way, the problem of multi-culturalism comes when people don’t have shared values and identity. In other words, one common culture.

Someone tell me - what does ‘multi-’ mean again ?

PS - one of the comments at Socialist Unity - you can see the confrontation here :

At yesterday’s confrontation, the EDL demo was composed overwhelmingly of young working class men. The UAF demo consisted mainly of palpably middle class students.

Which group is “our class”?

Another comment :

It was said the EDL chanted at UAF ‘you're not English anymore’, and this much to Mark P’s annyance is actually true. Once you become a socialist your first self identity is as a worker, part of an international class, that has more in common with workers from abroad than with bosses here.

I wouldn't mind that so much were it true. But the trouble is, the UK left mostly "has more in common with workers from abroad than with workers here."

Words Fail Me

Passing sentence, Judge Beckett told the two 15-year-olds that in determining the punishment part of their sentences he took account of their age, and the fact that the boy who struck the fatal blow had been doing well at school.

Compare and Contrast

The United Kingdom - from Bedfordshire council's enthralling document "Dealing with Racist Representations on Gypsies and Travellers"

Not only is it fair and morally responsible to treat racist representations seriously: it is also a legal requirement.
Romany Gypsies and Irish Travellers are recognised in law as a distinct ethnic group. The Local Government (Access to Information) Act 1985 requires any material which is defamatory or likely to incite racial hatred or contempt, and information the disclosure of which is prohibited by law, to be marked 'confidential' and not disclosed to the public.

Anyone who, either in writing or verbally, objects on racist grounds to a planning proposal is potentially contravening one of these Acts, by applying pressure to discriminate.

How do you define a racist representation?
In general terms, a racist representation is one which includes words, phrases or comments which are likely:
• to be offensive to a particular racial or ethnic group
• to be racially abusive, insulting or threatening
• to apply pressure to discriminate on racial grounds
• to stir up racial hatred or contempt
The context in which such words, phrases or comments are used must be considered carefully, in order to ascertain their true meaning and effect.

EXAMPLES OF RACIST REPRESENTATIONS (S31 of 1976 ACT) [applying pressure to discriminate]
• I object to the proposed Gypsy & Travellers site because these undesirable people
will damage my neighbourhood with their littering and crime will increase.
• If it is approved the number of gypsies in the area will make house prices fall. Put
them somewhere away from the normal community.
• The council should be more responsible and look after respectable peoples interests.

And we see the policy in action - here in Devon :

Mr Lee's objection stated that problems were caused by the number of families using another permanent site for vehicle wrecking. Mr Lee also highlighted that the police were called to the site a number of times and livestock was regularly let loose on his land.

The authority replied: "I have to tell you that if the council receives any more racist representations from you, this matter will be referred to the Commission for Racial Equality or the police for investigation."

And in Bedfordshire :

When residents were asked to provide feedback on council plans to build traveller camps on their doorstep they dutifully responded. More than 3,000 homeowners filled in forms outlining their views, many raising concerns over a possible increase in noise, traffic, rubbish and a detrimental effect on property prices.

However, such objections were not appreciated by Mid-Bedfordshire District Council, which partially or fully rejected nearly nine in ten of the replies for including comments 'of a racist nature'.

Meanwhile, across the pond, at the Official Portal for the State of Georgia, Governor's Office for Consumer affairs :

Irish Travelers Perpetuate a Tradition of Fraud

Around the time that schools let out, individuals known as Irish Travelers load up their pick-up trucks and take their show on the road. Sadly, their business is not a very entertaining one and can cost you way more than a ticket to the Big Top. These descendants of Irish immigrants live in nomadic clans and make their living by perpetrating home improvement fraud and selling substandard machinery at huge mark-ups.

While there are several communities of Irish travelers throughout the South, the largest is an enclave located just outside North Augusta, South Carolina. With the exception of their “marks”, Travelers have little contact with outsiders. Generally, in the spring, they spread out throughout the eastern seaboard and beyond.

Travelers go door-to-door, often targeting the elderly. They usually drive unmarked pick-up trucks with out-of-state plates, often from South Carolina. They are pavers, roofers, painters, repairmen who just happen to have left-over materials from a previous job, allowing them to offer huge discounts, but only if you act now. You will rarely receive a written contract from them, and if you do, the contact information will have only a toll-free number and a post office box, making it impossible to track down the conman when the homeowner discovers the inferior quality of the workmanship and materials.

Hmm. Quite a difference.








(via a comment replying to the Capitalists Nick Drew's point 5 in the following list, an attempt to answer the question 'why do we let politicians lie to us?'.

1) in most people the Will to Truth is very much weaker than the Will to Power (Nietzsche passsim)and several less exalted things besides, including

- the Will to an Easy Life
- the Will to Not Rocking The Boat (Homer Simpson passim)

being untrue doesn't count as much of an objection in the face of many other considerations

2) people for whom the Will to Truth is strong are generally Trouble-makers and hence outcasts, easily ignored / ostracised / burned at the stake

3) human beings are geared up to defend the Holy Lie (whatever it may be at any given time), using strategies like double-think, or shouting lalalalala very loudly, etc etc

4) why single out politicians ? Aristotelian physic is laughably false but it ruled the roost for centuries, through a combination of Church endorsement/ enforcement, and a complete absence of empirical curiosity / regard for consistency etc

5) many truths are deeply uncomfortable / embarrassing / infra dig. There are things one might just about get away with in the comments column of a blog, that are 100% true, and at the same time could not be voiced by any mainstream politician. This being the case, why do we even expect truth from them ?

6) despite all experience, we have a huge subliminal propensity to believe that, if a public figure can bring himself to state something as fact, or a newspaper to report it, it is probably true

7) tabloid journos have tapped into, and mastered, these phenomena - the doctrine of the reverse ferret, e.g. They make money from it. NuLab has tapped into tabloid journo-wisdom (Campbell etc al) and deploys the brazen lie, the shameless U-turn etc etc with confidence born of mastery

I could go on ... but hey, it's Saturday morning !)

UPDATE - the Georgia Consumer site really is rather good. From their page on scams to watch out for, this innovative (to me, anyway) Nigerian 419 fraud :

They met on a dating website just before Valentine's Day 2005. Richie described himself as "loving, caring and hard-working." His photo, of a handsome, bearded man in a cheek-to-cheek snuggle with a cat, sold Theresa Smalley on the "loving and caring" part. Richie explained "hard-working" in the first of their many online chats.

"He said he was from Massachusetts, but [that he] was supervising a construction project in Nigeria," says Smalley, a supermarket cashier in Middlefield, Ohio. Weeks into daily instant messaging, she knew she had lost her heart to Richie. By April she had also lost $2,700 to him.

Richie claimed he was paid in U.S. postal money orders and was having trouble cashing them at Nigerian banks. "He asked if he could mail me his paychecks and then I could wire him the money," says Smalley. "He even offered me some money for doing it, which, of course, I refused to take."

Over two weeks she deposited two paychecks in her bank account and wired the money to Nigeria; she wired a third payment to resolve what Richie called a "visa problem" so he could return to the United States and they "could finally meet."

Then the bank called. It seems Richie's deposited money orders were authentic. But they were worth only $20 each—they had been chemically washed and altered to read $950.

I like the touch with the cat. These guys are brilliant marketers. Mind, I'm almost inclined to believe she deserves it :

"The bank said I was responsible for the money I wired; it was everything I had," says Smalley, a divorced grandmother and college student pursuing a degree in social work.

Who's The Criminal Here ?

A landlord who lets people smoke in his pub ?

Or a smackhead who steals Poppy Appeal tins from shop counters, hiding them in his daughter's pram (his pregnant 'partner' nicks them, too) ?

The State gives its verdict.

Sentencing Michael Bailey at Oxford Crown Court last week, Judge Julian Hall said he was not going to jail him because the amount of money stolen was 'very little'. He told him: 'One's first reaction is to be quite horrified but I have to stand back a little bit and put it into perspective, having in mind the total amount of money involved is very little and why you committed these offences. It does seem to me they were drugs-driven. I'm prepared to suspend the sentence of imprisonment you so richly deserve.'

























At the same court last week pregnant Sabrina Burton was also let off the hook after she admitted stealing a poppy tin from a Londis shop in London Road on November 6. She also admitted stealing a MS charity box from Frog Orange in Windmill Road on the same day and attempting to steal another poppy tin from a shop on November 9. Judge Hall told her: 'It's the sort of case where everyone has a sense of outrage that you should do this - "how could anyone do something as mean as this?" - but I have to keep some sense of proportion. The monies taken were obviously fairly given for good causes, but they cannot have been huge amounts. I will give you a chance to put your life back in order. Your baby deserves it, if nothing else. It will do your baby the power of good if you keep off the drugs.'

A former pub landlord yesterday became the first person to be jailed in connection with the smoking ban.

Nick Hogan, 43, was sentenced to six months in prison for refusing to pay a fine imposed for flouting the legislation.

Why Aren't The Bank of Scotland Frauds ...

as documented by Ian Fraser, being picked up and run with by bloggers of left and right ? Fraser has loads of stuff - absolutely top grade journalism.

In the light of the many dodgy dealings of BoS staff, the unsolved murder of business manager Alistair Wilson raises unpleasant possibilities. Maybe the police need forensic accountants rather than DNA samples.

Here's the One Voice group for the victims of one set of frauds - Vavasseur.

The almost unbelieveable - but true - story of BoS executive Lynden Scourfield and BoS Reading is here. The basic modus operandi seems to be

a) a company (in all innocence) approaches BoS Reading branch for help

b) BoS recommend firms use 'turnaround consultants' Quayside Corporate Services, or else appoint Quayside personnel onto their boards as directors. Threats to withdraw lending if firms are reluctant to accept this advice.

c) once the nominees are in place, BoS hand over large loans.

d) nominees extract as much cash as possible while driving the businesses into bankruptcy, often picking up the distressed assets themselves at firesale prices. Small business owners lose everything.

You couldn't make this up. The FSA stinks to high heaven for its failure to nail the perpetrators.

Apparently the Reading branch of the Bank of Scotland is "with you all the way". But they never said where to.

And Another One ...

(an occasional series on the phenomenon of urban hipsters, right-on rebels or PC exemplars who for whatever reason need to get away from the vibrant multicultural melting pot of the city to a leafy, white and conservative area).

It may not be so leafy or conservative (in fact Fremantle is a leftie's dream city - Green MP and all), but I forgot this one - once never-off-the-box Ben Elton has 'done a Darcy' and gone to Australia.

Can't work it out - he donated all that cash to the Labour Party, yet this son of Catford seems not to like the end result.

I was under the illusion that Australia was a lot more diverse (in the UK sense) than it actually is. All the Sydney strife about Cronulla and 'uncovered meat' might create the impression of a UK situation. In fact the Aussies' insistence that immigrants bring with them from the old country useful things like degrees and in-demand skills means that 'Asians' in Oz are 'predominantly Chinese, Vietnamese, Filipino and Indian'. Only 19,000 of the population, for example, were born in Pakistan.

I don't get the impression, either, that there's a huge disconnection between the birthrates of 'native' Aussies and those of incomers - though I haven't seen the figures.

Elton's choice of Fremantle is more diverse (in an Australian sense) than most :

"For a city of small size, Fremantle is very diverse. Only 64% of the population was born in Australia. The largest overseas-born population groups come from the United Kingdom, Italy, New Zealand, Ireland and Germany. There are also sizeable Portuguese(Madeiran) and Croatian communities."

Hmm.

A Small Postette

At Biased-BBC.

Friday Night Is Music Night (finger in ear edition)

I mentioned among my many favourite female singers Nico and "another Anglo-Saxon princess with a harmonium, folkie Helen Watson of Muckram Wakes."

Here - my video response to John Martyn's Spencer.




I also added their Squire of Tamworth and Harry Belafonte's Suzanne - much better than the Leonard Cohen dirge. And Ms Watson has changed her name, but is still a princess.

"failing to show a commitment to equality and diversity"

I'm just wondering how the NHS suspension of Christian nurse Caroline Petrie in Somerset (for offering to pray for a patient - which apparently shows a failure of 'commitment to equality and diversity') sits with this NHS poster in Tower Hamlets.
















(the poster is in the news because Dr Anwara Ali, a local councillor as well as NHS pinup, has defected from Labour to the Tories)

If wikipedia is correct, the Arabic phrase Assalamu Alaikum ('peace be upon you'), while sometimes used by Arab Christians and Jews, is essentially a Muslim greeting.

Still, mustn't carp - she could well have been in a hijab or burka. Just along the road in Brick Lane people are eagerly awaiting the installation of their hijab gates, part of a council-funded 'cultural trail' which starts at a sixty-foot steel minaret affixed to the Brick Lane Mosque.

A spokeswoman for the council said the concept behind the arch was "loosely based on the sculptural form of a headscarf, reflecting the many cultural backgrounds that have occupied and sought refuge in and around Brick Lane over the centuries".

Using planning-gain funds paid to the council following the development of Bishops Square and Spitalfields market, the trail is intended to bring more tourism into the area and smarten it up. But locals complain that the focus has been too much on the Bangladeshi community, which makes up a third of the Tower Hamlets population.

At the centre of the trail is a 29 metre high minaret that has been attached to the Brick Lane mosque, a grade II listed building originally built in 1742 as a Huguenot church, then converted into a synagogue and now the Brick Lane jamme masjid [mosque]. Tower Hamlets council says the structure "is not a minaret" but a "large steel art sculpture".

A Heartwarming Tale

I was late when I first met my clients, the Lipkin family, outside my office. I was very late. I couldn't believe I was late.

I felt like an imposter. Maybe I was an imposter. I had dressed as professionally as I could: a sophisticated sports jacket, slicked-back gelled hair, elegant briefcase. My straightened posture exuded the charismatic confidence of a seasoned attorney. In my mind, at least.

I extended a hand and introduced myself to a family that was about to have their home foreclosed upon.

I was hoping they would never guess that despite being a licensed attorney two years out of law school, I was utterly paralyzed with fear—and earnestly praying to Allah that my potential clients were not about to call me out as an incompetent charlatan, punch me in the face, storm out of the office, and call the state bar seeking to disqualify me.

I was the guy who was going to save these people from being evicted from their own home? Who was I kidding?

In reality, "my law office" was actually my friend's office, which he'd lent to me so that I could meet these clients. The classy jacket had been purchased at a clearance sale in an outlet store at the Great Mall in Milpitas. The gel was the last remnant of a decaying and potentially expired bottle I'd probably had since college but never found the opportunity to use. The briefcase was a gift from my relatives in Pakistan—who, much like the rest of my family, were thoroughly shocked that I had passed the bar exam and become a licensed attorney. My business cards had been printed for free by Vistaprint, and despite having a professional front side featuring my name in bold letters and the words ATTORNEY AT LAW, the back side glared BUSINESS CARDS ARE FREE AT WWW.VISTAPRINT.COM!

Anyone who can make a US attorney into a sympathetic figure is surely a talented writer - but is he a talented lawyer? Wajahat Ali's first case.

Best Educated Generation In History ...

The "Blair generation" will be the best educated in history, the school standards minister, David Miliband, promised yesterday.

My daughter's homework sheet ....

A Funny View of Wealth

Two on immigration and the benefit or otherwise to the UK economy

a) our (former) man in Warsaw, Charles Crawford, tells all about the 13,000 Poles that turned into a million-odd :

What happened was this.

Parts of the Blair government were very nervous about a tidal wave of Poles and other Eastern Europeans washing over the UK once we opened our Labour markets unconditionally.

Or rather they were nervous about the Conservatives making a big row about it after Jack Straw announced the policy in 2003. The more so since most other EU countries in a show of noisy EU anti-solidarity made clear that they would not open their labour markets unconditionally.

Which meant that whatever tendency there was for millions of Poles and Czechs and Slovaks and the rest to storm out from their respective homelands to look for jobs would be funnelled mainly in our direction, making the tidal wave even more fast, big and scary.

So intense consultations took place round Whitehall - should the UK row back on this commitment?

PM Blair took a breezy decision. Let it rip.

Previous experience with Portugal and Spain suggested that there would be a surge of interest (and people) but in due course it would all calm down without too many problems. But he threw a small bone to anti-immigration fears by setting up a 'registration scheme' for new arrivals with a view to at least having some sort of numbers to use in subsequent debates on the issue. Other administrative devices were used to try to stop people coming over to UK and promptly claiming benefits.

Thus it transpired that I as Ambassador had to go along to the then Polish Interior Minister Jozef Oleksy to break the official news of our keenly awaited decision. Oleksy previously had been Polish Prime Minister, but had an unerring knack of attracting controversy and scandals - a droll and unconventional figure by most former communist standards.

I pompously told Oleksy that I had the honour to inform the Polish Government that HMG had taken an important decision concerning the UK labour market after Poland's EU accession in May 2004, namely:

• The labour market would be opened unconditionally with immediate effect on 1 May 2004.
• Any Poles who wished to travel to the UK to live or work could do so with out a visa.
• Moreover, an effective amnesty would be given to all Poles who had been living in the UK and working illegally (my emboldening - LT. I don't remember anyone pointing that out.)
• All Poles seeking to work in the UK would be expected to register under a new scheme, but registration was not a condition for getting a job.

Oleksy looked at me in amazement and said in Polish: "Gdzie tkwi haczyk?" What's the catch?

"No haczyk," I replied. "It's as simple as that."

Oleksy simply did not believe me.

b) a long, nay, massive chunk pinched from a new discovery, Cynicus Economicus, who was recommended in the Alphaville comments. I do hope he doesn't mind and recommend that you read the whole thing.

From his mighty economic overview "A Funny View of Wealth", his take on the oft-expressed view that immigration is good for the economy :

Immigration and the UK economy

Immigration is a matter that is discussed with extreme care because of the potential for the issue to become entwined with racism. This sensitivity has developed to such an extent that it has become, in polite circles, almost impossible to discuss anything but the positive impacts of immigration. This has stunted debate, and prevented a rational analysis of the economics of immigration. This section will look at immigration with no such constraints, and will try to examine immigration from an economic point of view.

Sources of Immigration

Immigration into the UK is, in principle, controlled by the government but the government is heavily constrained in the actions that it can take to limit immigration. International treaties such as 1951 United Nations Convention on the Status of Refugees, The European Convention on Human Rights, EU Regulation 1612/68 on the freedom of workers are just some of the constraints on government action.

The aim in this section is not, however, to review how people immigrate into the UK, but to try to understand the impact of immigration when it occurs.

Before looking at immigration it is worth noting that, as is pointed out elsewhere there is a major controversy over the statistics for immigration. For the purposes of this section we will note that the immigrants into the UK are from the New and Old Commonwealth, and the recent EU accession countries[8]. This means that many of the immigrants are coming to the UK from countries that are less economically developed than the UK, and that presumably they are coming to the UK (at least in part) to enjoy better economic opportunities. As such, this section includes an assumption that many of the inward migrants come with limited financial resources, and this particularly applies to migrant temporary workers from the EU accession countries.

Immigration and Wages

There are some people who argue that immigration does not have an impact on wages. This argument may have some validity if the scale of immigration does not lead to any significant increase in supply of labour in any particular labour market, such that the increase in overall numbers is negligible. However, in the case of mass immigration, as has occurred in the UK in the last few years, this argument does not have any foundation in logic whatsoever.

It seems faintly absurd that this needs to be explained at all. Any reasonable grasp of economics will indicate that, all things being equal, an increase in supply relative to demand will lead to downward pressure on prices. A decrease in supply relative to demand will lead to upward pressure in prices. Few would argue that, if the supply of steel increases relative to demand that there will be no downward price pressure, and few would argue that if steel supply decreases relative to demand that there will be upward pressure on prices (all things being equal). These are widely accepted principles in economics but, despite this, some people still argue that increasing the supply of labour has no negative effect on the price of labour. Apparently, when the word immigration is mentioned, the laws of economics are abandoned, and economists scrabble around trying to redefine the laws for this special case.

One of the reasons for such a fallacy is that some studies have shown what appears to be large scale immigration into a particular area whilst seeing no fall in wages. This suggests that immigration does not have a depressive effect on wages. The only trouble with such a suggestion is that it ignores the possibility of an upward pressure on wages due to supply constraints. The influx of labour may not make wages fall, but it may prevent them from rising. In this case, the increase in supply has a negative impact on the workers who would otherwise be wealthier as a result of wage increases.

In the UK labour market ‘all things are not equal’, as there is a minimum wage system. This means that, at the bottom end of the labour market, there is a level below which wages can not legally drop. It could be argued that this prevents downward pressure on wages but, once again, this does not allow for the idea of upward pressure on wages due to insufficient supply of labour. Furthermore, if an immigrant is illegal, then the constraint of the minimum wage may be ignored by employers in the knowledge that the worker is unlikely to complain about being underpaid. Even for a legal immigrant there is greater potential for them to be paid less than the minimum wage as they may be unaware of the minimum wage, or be ill equipped to complain about not being paid the minimum wage if they are denied it. In these circumstances the employer might take on a migrant labourer in preference to a native labourer, thereby having the effect on the native workers wages of ‘no wages’.

One of the arguments for immigrant labour is that it is addressing shortfalls in the UK labour market. At the very least this is a problematic idea when viewing the unskilled labour market, when there are large numbers of unemployed and economically inactive people in the UK. The numbers of such economically inactive are highly contentious so that a figure will not be given here, but there are certainly large numbers of individuals within the UK who could, at the very least, take the unskilled jobs such as building workers, fruit packers and so on. It would be very hard to argue that there is a skills shortage for this kind of work, as much of it requires minimal training.

Economists such as David Card point out that, in the US labour market for example, there are many more immigrants than unemployed, and therefore the immigrants can not be taking the jobs of the unemployed. They are taking jobs that would otherwise not get done, and are therefore beneficial to the economy[9]. The first question to be asked here is, how is that there are so many unemployed in the first place? The second question is, even if there are more immigrants than unemployed, then is it nor reasonable to say that some of the unemployed are in this situation as a direct result of labour competition from migrants? The final question to ask is what all of the additional immigrants are actually doing, and ask whether they make a net contribution to the economy overall? This last question is complex and statistics are used by varying points of view to justify their positions. However, as will be seen later, they are often forgetting some key considerations that need to be accounted for in measuring the immigrants contribution to an economy.

In the UK, as in the US, there is one other critical question that needs to be addressed and this is the question as to why UK employers are hiring people from other countries? As mentioned before, all things in the UK are not equal due to the minimum wage, but also because the UK employer needs to compete for labour with the UK benefits system (which is an indirect minimum wage that applies to anyone entitled to social welfare benefits). This system allows an individual to remain economically inactive, or to choose an option of accepting a low paid job for very little real remuneration despite a major increase in the expenditure of their labour. In such cases the value of the labour expended is far below the minimum wage as it needs to be calculated as the weekly pay minus the benefits, to give an actual wage for the work done. The rational person in this situation might reasonably ask whether the loss of their free time to work is worthwhile for what will often be little financial incentive as, in this situation, the UK worker is often working for extremely low wages[10]. By contrast, at least initially, the migrant worker may not be entitled to such benefits[11] and is therefore happy to accept the wages that the UK worker will not accept. In accepting such wages the immigrant removes the need for UK employers to raise wages to a sufficient level to give an incentive to the UK worker to choose labour instead of benefits. In short, the immigrant worker is depressing wages to a degree that the dependence on benefits by UK labour continues, despite apparent labour shortages. The result of this is that the inactive UK workers remain as a drain on the state, and a drain on the economy overall.

If we accept that hiring an immigrant worker can lead to a British worker remaining economically inactive, the calculation to the cost of the economy of the migrant labourer might be expressed as the weekly cost of benefits minus the tax input of the migrant labourer who has been substituted for the British worker. In nearly all imaginable and realistic cases the tax will be insufficient to cover the benefits given to the British worker leading to a net loss to the state, and therefore a very substantial net loss to the economy.

What of the skilled immigrant worker? How does this worker impact on wages? Here the argument is similar to the unskilled labourer in that, if there is an increase in supply, there will be a negative impact upon wages for native workers, with a likelihood of reduction in wage levels, or a reduction in the rate of increase in wages. However, in this case, it may be that there is a genuine shortage such that organisations are completely unable to satisfy their requirement for skilled labour, regardless of the wages that they are willing to provide, and there may be a time lag in training new workers that will prevent current demand being met. This could have a negative impact on certain sectors of the economy where the labour is needed, leading to an overall negative effect on the health of the economy overall. In this case the jobs that are undertaken by the skilled migrant labourer would simply not be done without the migrant. It might also be argued that the skills are provided very cheaply, as the immigrants already have the necessary skills with no need to invest in training.

To consider the impact of immigrant skilled workers it is worth considering one of the most discussed examples, the shortage of plumbers that has been resolved with the immigration of large numbers of Polish plumbers. Prior to the arrival of the Polish plumbers the problem had become so severe that the subject was becoming a matter of (at least middle class) humour. Whilst the shortage was leading to expense and inconvenience for consumers, it was also probably more than a matter of inconvenience for industry, where plumbing problems were no doubt going unresolved, systems not being built, or being built late, built to poor standards amongst many other problems. This might lead to the conclusion that the introduction of Polish plumbers brought a real benefit to the economy by filling a very real skills shortage, and a skills shortage that was having a negative impact on the well being of the economy overall.

It would be difficult to argue against the idea that, in the short term, the Polish plumbers offered real economic benefits. However, it is in the long term that the fabled Polish plumber looks a less attractive a proposition for the economy. In order to see why this is the case it is necessary to view the situation prior to the arrival of the Polish plumbers. The cost of plumbing was (inevitably) rising due to the shortage of skilled workers, and the competition for skilled workers was leading to increases in the wages of plumbers. The rising wage levels meant that plumbing was becoming an increasingly attractive area of work, and was attracting new entrants to the trade[12]. This suggests that, given sufficient time, supply and demand would have resolved the plumber shortage without any intervention, or any need for external labour. When considering the impact of migrant labour on plumbing, it is possible to suggest that the introduction of immigrant plumbers provided an alternative to this solution, by the substitution of labour from another market.

This substitution of migrant labour for training native labour has the self evident effect of removing the demand for native labour to be trained, and therefore has the potential for a situation in which a labour market can become dependent on immigrant labour. In a case where the migrant labour is temporary, this might be considered a serious problem on the grounds that it is quite possible that the problem will re-emerge some time in the future, once the immigrants return to their home countries. The alternative is to have a continuous flow of immigrant plumbers into the market place, thus the dependence.

Perhaps the most important point, when considering the case of the plumber shortage, is that plumbing is an area of work that, had the financial incentives continued growing, might have provided sufficient incentive to motivate the economically inactive to have chosen work over benefits. By introducing the immigrant labour wages ceased to rise, or dropped, and the result was that the incentives for entry into the trade were reduced, thereby helping to maintain people in economic inactivity.

This is not to ignore the problem that, had it not been for Polish plumbers, there would have been a shortage of plumbers for several years, whilst sufficient entrants to the plumbing labour force were trained in the necessary skills. However, if designing a better ‘plumber policy’, one free from constraints, this shortage might have been addressed by a transitional arrangement where the immigrant plumbers were permitted to remain in the UK for a fixed period of time, with a period of phasing out the immigration. Such an arrangement would need a clear end date to ensure that the market was prepared, by commencing training ‘native’ plumbers. Of course, the reality is that such a scheme would not be enforceable under today’s immigration constraints, and can only be a hypothetical solution to skills shortages.

Having dealt with skilled workers it is also necessary to look at the impact of highly skilled immigrants on the labour market. If we take the example of an immigrant working as a merchant banker in the city of London, surely here is an example of immigrant labour providing clear benefits by bringing in skills that are of great value in the economy as a whole, and creating real gains for the economy. One argument is that, in recruiting such highly skilled immigrants into the UK, there is a substantial benefit from acquiring the skills without the expense of having to train/educate the people in their skills[13]. As they arrive they are already in the position of being productive workers, with no need for investment by the state or employers.

In addition to the immediate financial benefit of ‘high skills at low cost’, these highly skilled workers may be able to add significant value in the sectors in which they work in other ways, such as their ability to introduce new ideas, new methods, and a host of other benefits, which are related to the combination of high levels of skill in conjunction with their experience of their own home country systems. Furthermore, just increasing the level of high skills, for example taking the case of scientists, will have potential to increase the potential for improvements in technology, process, and other economic enhancements through the sheer presence of numbers. More highly skilled people, increases the prospects of more innovation, more new companies and so on[14].

There is a simple initial attractiveness to this argument but the situation is very much like that of the plumbers, but with considerably longer time scales to develop the necessary skills. However, the case of skilled workers differs from plumbers in one respect; it is an area in which the immigrants are not a substitute for the economically inactive, as very few of the economically inactive would have the qualifications or potential to undertake this kind of labour. As such it would be difficult to argue that there should be restrictions on such highly skilled workers coming to the UK as the benefits are often quite clear.

There is a more worrying underlying question to ask, as follows; ‘Why it is necessary to import such talent in the first place?’ This will inevitably lead to the follow on question of what it is in the infrastructure of the UK that is lacking, such that it is failing to produce such talent internally? Is the requirement for highly skilled immigrants just a sticking plaster that hides a deep wound in the infrastructure of the UK?

The upward pressure on wages resulting from immigration

Whilst supply and demand tells us that immigrants will inevitably have a negative impact on wages in the job market in which the immigrants are working, there is the possibility that immigration may create an upward pressure on wages elsewhere. This will occur in situations where a company can lower the wages of workers, and therefore cut costs of their business as a result. In these cases the company or organisation will free up more cash, and some of that cash may be channelled into the remuneration of other people within the organisation, such as senior managers or business owners. A good example of a formal route for such a process would be in the provision for bonuses based upon profitability.

Whilst such an increase in remuneration may be a positive for those in receipt of them, it is unlikely that this has any positive benefit to the economy overall, as the increase in remuneration is a transfer of money from non-immigrant workers to the recipients, rather than the generation of ‘new’ money through, for example, more efficient production methods. In short it is a case of an increase in wealth differentials between managers/owners and workers, rather than the generation of new wealth.

Remittances and Repatriation of Funds - the Missing Argument

The issue of remittances and repatriation of funds is not heard in discussion of immigration, and yet may be one of the critical factors in considering the economic benefit of immigration. It is not clear whether this is not mentioned because of ongoing sensitivity about the subject of immigration, or whether it is because economists have just simply not considered the issue. As a consequence there is little solid evidence that can be provided and this section is therefore even more speculative than other areas of this discussion, relying on a combination of reason and guesswork.

Note 1: I define ‘remittances’ here as money which is sent by the immigrant to their country of origin to help their family or friends with financial support, and ‘repatriation of funds’ as the situation in which the immigrant returns to their country of origin taking with them their savings and investments that have been accumulated as an immigrant worker.

Note 2: I have written to the ONS to request information on the way that they collect information on migrant transfers (these show up in the balance of payments statistics). Their first answer they gave suggests that no account is taken of remittances whatsoever, and that inwards and outward flows of money of inward and outward migration are based upon the passenger surveys at landing/departure points. This method of calculation requires accurate numbers for migrants (non-existent) and the co-operation of migrants who need to volunteer their financial affairs at the time of embarkation/disembarkation. At first sight this appears to be a poor method of calculation, and my follow on questions to my initial enquiry to the ONS remain unanswered. My suspicion is that they are painfully aware that their methods are probably not much better than wild guesses.

Temporary Workers

These can be anything from a City of London financier, through to a waitress in a bar. In all cases they share the characteristic that they intend to remain in the UK for a finite length of time, whether that is the length of a contract, whether they will leave when they have achieved x value of savings, or until they go home to get married and so forth.

The important aspect of temporary workers is that, on leaving the UK, they will eventually take their accumulated savings with them, and this may have a very negative effect upon the UK economy, if we consider the immigrant’s net contribution.

If we return to the example of the Polish plumber discussed earlier, we can make some ‘back of a cigarette packet’ calculations for the temporary worker. We might surmise that the Polish plumber has decided to work in the UK for two years and has an aim of saving one third of their take home pay to take with them when they return to Poland. In this case we can make a guess that the worker will be saving at least £5000 per year, and this means that the Polish worker will take a cash lump sum of £10,000 when they leave the UK. In real terms this is the equivalent of importing a medium size family car into the UK.

If we take the case of a skilled financier earning £150,000 per year in the city, it is very likely that after a two year contract in London they will be taking at least £50,000 out of the country in a cash lump sum.

Permanent Immigrant Workers

For immigrant workers coming from developing economies, one of the attractions of working in a developed country is the ability of the migrant to earn enough money to help support their family in their home country. One example of this is the Philippines, where remittances provide vital foreign currency for the country’s economy.

There may be many kind of remittances, from fixed monthly payments to the family, or providing one off payments to educate a relative, or to help a family member start a new business. The key point to consider in all cases is that this is cash leaving the UK economy with no return for the UK economy. This is different from investment where the money is sent to another country with a view to gaining a return on the investment. It is a cash gift.

No speculative figures are supplied here as such figures would be even more speculative than the example given in the case of the temporary workers. However, it is possible to assume that the numbers, when viewed over the immigrants lifetime, might be very large indeed, in particular in the case of immigrants who are successful and therefore earn large amounts of money.

Close ties with country of origin

In addition to taking cash sums out of the economy, there is also the possibility that immigrants will be more likely to have a negative impact in other ways, when compared to a person of equal economic status who is a native worker.

One obvious example is that of return visits to the home country. This can be seen as being equivalent to a native worker taking a holiday in another country. Cross border tourism is an industry that sees large amounts of cash being transferred from one economy to another, and is therefore an equivalent to an import of a good. The question that is raised with the immigrant worker is whether the frequency, cost and duration of their trips is greater than that of a native worker who is of equivalent economic status. In this case it might be reasonable to suppose that the immigrant worker (including temporary workers) is more likely to travel out of the country, thereby removing greater cash sums from the economy.

Another area which might see a negative impact is in the purchase of goods and services. There may be a tendency for immigrants to prefer to purchase products and services that originate in their county of origin, for cultural reasons and for reasons of familiarity. An obvious example of this is the introduction of Polish products into supermarkets based in areas with large numbers of Polish immigrants, or the many Asian supermarkets that largely stock products from the Asian sub-continent.

Once again, the impact of this skew towards buying goods from the country of origin is not measured, and therefore the real value of the resultant rise in imports is unknown and uncalculated. It would, however, be reasonable to speculate that an immigrant, when compared to a native of the same economic status, is more likely to purchase greater numbers of imported goods, with the negative impact this has on the balance of payments.

So what do remittances and repatriation of funds mean for the UK economy?

It is here that the question becomes very blurry, as the figures are not known. However, if we were to take the example of Central European temporary immigrant workers and make some assumptions, the figures become rather disturbing.

If we imagine that there are 500,000 Central European temporary workers, and we assume that they will be staying in the UK for an average of two years, with an average savings rate of £4000 per year, we can then say that each immigrant will repatriate £8000. If we then multiply this by 500,000 we can say that, over a period of two years, there will be a cash loss to the UK economy of £20,000,000,000. This is a significant amount of cash lost to the UK economy.

However, when we look at this loss, it is even more severe than it first appears. When a person earns money and spends the money in the country in which it is earned, the money recycles through the economy. Even when a person uses some of their cash to buy an imported good, such as a television, a substantial proportion of the money remains in the economy. In the case of the television there is the UK internal distribution of the television, the promotional costs, the shop that sells the television and so on. At each of these stages UK based companies, and workers, are involved in the transaction, and part of the money paid when the purchase is made pays these companies and workers, who in turn spend their money and recycle the money to others. In the case of repatriation of funds, compared with buying an imported good or service, the loss is greater because it is an absolute loss of that money to the economy.

In the case of remittances, it is far more difficult to make a calculation of the impact upon the UK economy, as there are far too many unknowns to even start to make guesses. However, it would be safe to assume that remittances from immigrants would, in total, add up to significant sums of money.

The Pensions Argument

The UK, as for many Western economies, has a potential problem with the demography of the native population. In short, the population is ageing and this means that the number of retired people, when compared to the number of working people, is going to increase dramatically in the coming years. At the heart of the problem is declining birth rates, and increases in longevity. The problem arises when considering how pensioners will be supported in their old age by the state, as the number of economically active people needed to pay the taxes of retired people is set to decline in proportion to the number of pensioners. The result of this is that there will be less economically active people to support each pensioner.

One of the arguments for immigration is that immigrants add to the labour force, and often immigrate when they are young. This influx of younger workers is seen as a solution as it will maintain the young population at a higher level than would otherwise occur, thereby ameliorating or solving the problem. Furthermore, some studies show that immigrants have larger numbers of children, thereby raising the birth rate and counterbalancing the decline of the birth rate of native people.

The first problem with this argument is to return to the argument about economically inactive native workers. If the cost of immigration is the retention of these workers in inactivity, then the immigration is just substitution, and substitution at great cost.

In the case of skilled workers who are immigrating permanently this is a different argument, and a case may be made for such workers, provided that, after remittances and other factors, they present a net gain for the economy. However, even in this case there is a fundamental problem in the infrastructure (and society) that is being solved by the immigrants from other countries. The first problem needing to be answered is why individual UK workers are not making provision for their own retirement, and the second question is why is the birth rate falling. Whilst highly skilled immigrants might help in this situation, the reality is that immigration is covering more fundamental problems that might be addressed more effectively, and economically, in other ways.

Cheaper Goods and Services

It could be argued that the downward pressure on wages results in cheaper goods and services. For example, if you have low cost fruit pickers, this will make a kilo of strawberries cheaper, thereby offering a real benefit to all of the people who eat strawberries. This appears to be an economic benefit offered to the UK population.

However, if you consider that the immigrant labourer is helping to keep an economically inactive person inactive, then the situation looks rather different. This is because, what the person saves in the price of strawberries, they will pay in taxes to support the economically inactive person, and the higher tax will outstrip the cheaper strawberries creating a ‘dis-benefit’.

In addition, if wages are negatively impacted by an immigrant, the consumer of a good or service that utilises the immigrant labour may feel the benefits of the cheaper good or service, but the benefit is a transfer from the native worker whose earnings are lower than they would otherwise be, to the consumer. There is no net gain but a transfer.

Outward Migration (Emigration)

In viewing outward migration, once again, we encounter the problem of the lack of accurate statistics and we therefore will again need to speculate and reason in place of using research. Whilst passenger surveys may give an indication of numbers and financial information, they are also likely to be very inaccurate. Lacking any other statistics we will at least use the recent ONS statistics for the outflow, a number of just over 200,000 individuals in the last year, and 800,000 have people have left and not returned since 1997[15].

Who are these people that are leaving the UK? One group is that of people moving to Southern Europe, Thailand and other countries for retirement. These individuals will take with them their accumulated wealth and will spend that wealth in another country. This represents a significant outflow of wealth, and an outflow that will continue as these individuals draw on their pensions, and other assets (such as through the sale of their house) to finance their new life abroad. On the positive side, they will also not be using the NHS and other services in the UK economy on a regular basis, though some will still probably return to the UK for severe health problems. Whilst each individual case will be different, the probability is that this outflow is a negative for the economy.

Another group that are emigrating are highly skilled UK workers, who are going to countries such as New Zealand, Canada, the US and Australia. To give a snapshot, over 15,000 people from the UK emigrated to New Zealand in 2004/5[16] and just over 23,000 individuals to Australia in 2006/7[17].

The systems for these ‘immigration’ countries are heavily biased towards immigrants who are graduates and postgraduates, and also heavily biased towards people with experience in careers with specialist and ‘in demand’ skills. If we look at the example of New Zealand the majority of UK immigrants were in the skilled and business categories. These are just the kind of people that would normally be adding value to the UK economy by contributing their combination of education, training and skills. They are also people who will have probably accumulated savings and, in light of the property boom in the UK, will have considerable equity in their UK property. Once settled in their new country, these assets will inevitably be transferred to the new country, once again with a commensurate outflow of wealth from the UK. If we imagine a fairly typical immigrant profile, we will see a 25-35 year old graduate working in a good occupation, living in their own home, and having saved enough money provide some security when they arrive in their destination country. In this case we might make a reasonable guess that, at a minimum, most emigrants will leave the UK with at least £30,000 in cash and assets. If we use the figures for Australia and New Zealand for one year, we can see that this is very large outflow of wealth from the UK Economy representing £1,140,000,000 for just these two countries, and this is using a very conservative estimate of the assets that they are withdrawing. Perhaps more importantly, in addition to taking cash out of the UK economy, these immigrants will also be taking out the investment in their education and training, and their potential to add value to the UK economy.

The final category of emigrant to consider are the entrepreneurial business people, a category that would be impossible to quantify or identify. For this there are no statistics, and no way of determining the numbers or any sense of value of the loss. However, a visit to South East Asia will quickly show that there are large numbers of just such individuals, who can often be found in cities such as Bangkok, Shanghai, or Manila. Strike up a conversation and they will probably tell you how they have given up on the UK, and moved all of their business interests to their new country to avoid stifling regulation in the UK economy, the inflexibility of workers, and how they benefit from the low taxation and quality of life in their new home country. What is the loss to the UK economy of such individuals? It is impossible to say, but it is certainly a significant loss. In one recent case in Bangkok I met an individual who had withdrawn ‘several million’ from the UK economy, and who now just maintained a tiny presence in the UK economy.

Non-Domicile

There is one category of immigrant into the UK that certainly add wealth to the UK economy, the very wealthy ‘non-domiciles’ who have chosen to live in the UK for a limited period of each year. The UK tax system, in conjunction with the many attractions for wealthy people in London, have attracted large numbers of these individuals. They often bring sizeable amounts of capital, as well as significant spending power, into the UK. It is certainly one of the elements that contributes to the wealthy feel of London, visible through private banking, luxury shopping and entertainments. However, there has recently been a political backlash against the tax concessions granted to these individuals, and the long term future for this category of immigrant is starting to be questioned as a result. Whether these individuals choose to remain is not yet certain, but changes in their tax status may have a negative impact on numbers in the medium to long term. Only time will tell whether the attractions of London will be sufficient to retain these providers of wealth into the UK economy.

Conclusions

The first thing to conclude from this review is that there are some aspects of immigration that need to be studied as a matter of urgency. Without more information the economic consequences of immigration will remain unknown.

The second conclusion is that the immigration of all types of unskilled workers is almost certainly going to have a significant negative effect on the economy. We can also view the case of the skilled worker as a negative in general, but an occasional necessity for a short duration. With regards to the permanent immigration of skilled workers, this is likely to be a negative, in particular due to the negative impact of remittances and the particular skew of the spending. However, this would need to be looked at further in more detail to draw any firm conclusions.

As for highly skilled immigrants, short term immigration may be necessary for a period, though for longer periods than skilled workers. However, if this is necessary question need to be asked about why the UK infrastructure is failing to provide such skilled individuals. For permanent highly skilled immigrants, it is likely that they will have a greater positive overall impact on the economy over their lifetime, than negative. They may also make negative contributions through remittances, and more import orientated purchasing, but it is likely that these impacts will be counterbalanced by the positives that they bring.

For UK citizens emigrating out of the UK, it is likely that the loss to the economy will be substantial in the short term, and even more serious in the long term. The majority of emigrants will be the very people that the UK should be retaining, as they are the people who are most likely to make positive contributions to the economy.

The last point to make is that, even if the negative economic impacts of migration are understood, there is little that can be done to reverse the current patterns of migration without significant changes to the structure of UK immigration rules. As such the best that policy can achieve is to try to ameliorate the negative impacts, though no easy solutions or ideas come to mind.



[8] Emigration from the UK reaches 400,000 in 2006, National Statistics, 15 November 2007, retrieved from www.statistics.gov.uk on 7 December 2007

[9] Lowenstein, R: The Immigration Equation, 9 July 2006, The New York Times, retrieved from www.nytimes.com on 18 November 2007.

[10] If we imagine a person who is on a hypothetical benefit of £100 a week, and they accept a full time job paying £140 per week, their hourly rate of pay then becomes £40 divided by 39. There are many forms of benefits and therefore many different scenarios that could be explored. I have chosen a hypothetical example as this is the simplest way of explaining the principle. It is also worth noting that, even if not actively calculating their real wage, people facing the benefits or work choice will be very likely to have a sense of what the relative rewards are in each case.

[11] If they are entitled to benefits and they utilise this facility, very few people would (I hope) argue that they are anything but a negative for the UK economy.

[12] I seem to remember a newspaper publishing the story of a lecturer from a college of higher education giving up lecturing to go into plumbing as the wages were so much better.

[13] It should be added that there is a significant risk in investment in people, as they do not all succeed in their training, some will die or be incapacitated, some will not follow the career direction their training suggests, and others may immigrate into another country. In all of these cases the investment of the state, or other institutions, into their education is a waste.

[14] The same arguments might be made for unskilled and skilled migrants. However, there is an assumption that, rightly or wrongly, that more skilled people are more likely to have far higher potential for positive impacts. It is an assumption that seems perfectly reasonable, as highly skilled people are more likely to intelligent and hard working (as highly skilled people are likely to be where they are through either significant effort, greater intelligence, or a combination of both - notwithstanding that some highly intelligent people do not have opportunities to excel).In addition they already have skills that will allow them potential to utilise their strengths. In short they are more probable candidates to add significantly to economic well being, whereas the unskilled, and skilled are far less probable. This is clearly an area where that could produce significant debate, but I agree with the assumption that highly skilled workers are more likely to generate wider economic benefits for the reasons outlined, as this seem to me to be entirely rational .

[15] Emigration Soars, The Telegraph, 16 November 2007, Retrieved on 7 December 2007 from www.telegraph.co.uk

[16] Immigration Trends 2004/5, New Zealand Immigration, retrieved from www.immigration.gov.nz on 7 December 2007

[17] Settler Arrivals 1996/7 to 2006/7, Australian Government Department of Immigration and Citizenship, retrieved from www.immi.gov.au on 7 December 2007

Education and Self-Esteem

from a fascinating Atlantic piece by Don Peck, on the economic crisis and a potential lost generation. Lots of stuff there, it's just this section on education changes that struck me. I imagine the parallels with the UK are pretty close.

Many of today’s young adults seem temperamentally unprepared for the circumstances in which they now find themselves. Jean Twenge, an associate professor of psychology at San Diego State University, has carefully compared the attitudes of today’s young adults to those of previous generations when they were the same age. Using national survey data, she’s found that to an unprecedented degree, people who graduated from high school in the 2000s dislike the idea of work for work’s sake, and expect jobs and career to be tailored to their interests and lifestyle. Yet they also have much higher material expectations than previous generations, and believe financial success is extremely important. “There’s this idea that, ‘Yeah, I don’t want to work, but I’m still going to get all the stuff I want,’” Twenge told me. “It’s a generation in which every kid has been told, ‘You can be anything you want. You’re special.’”

In her 2006 book, Generation Me, Twenge notes that self-esteem in children began rising sharply around 1980, and hasn’t stopped since. By 1999, according to one survey, 91 percent of teens described themselves as responsible, 74 percent as physically attractive, and 79 percent as very intelligent. (More than 40 percent of teens also expected that they would be earning $75,000 a year or more by age 30; the median salary made by a 30-year-old was $27,000 that year.) Twenge attributes the shift to broad changes in parenting styles and teaching methods, in response to the growing belief that children should always feel good about themselves, no matter what. As the years have passed, efforts to boost self-esteem—and to decouple it from performance—have become widespread.

These efforts have succeeded in making today’s youth more confident and individualistic. But that may not benefit them in adulthood, particularly in this economic environment. Twenge writes that “self-esteem without basis encourages laziness rather than hard work,” and that “the ability to persevere and keep going” is “a much better predictor of life outcomes than self-esteem.” She worries that many young people might be inclined to simply give up in this job market. “You’d think if people are more individualistic, they’d be more independent,” she told me. “But it’s not really true. There’s an element of entitlement—they expect people to figure things out for them.”

Ron Alsop, a former reporter for The Wall Street Journal and the author of The Trophy Kids Grow Up: How the Millennial Generation Is Shaking Up the Workplace, says a combination of entitlement and highly structured childhood has resulted in a lack of independence and entrepreneurialism in many 20-somethings. They’re used to checklists, he says, and “don’t excel at leadership or independent problem solving.” Alsop interviewed dozens of employers for his book, and concluded that unlike previous generations, Millennials, as a group, “need almost constant direction” in the workplace. “Many flounder without precise guidelines but thrive in structured situations that provide clearly defined rules.”

All of these characteristics are worrisome, given a harsh economic environment that requires perseverance, adaptability, humility, and entrepreneurialism. Perhaps most worrisome, though, is the fatalism and lack of agency that both Twenge and Alsop discern in today’s young adults. Trained throughout childhood to disconnect performance from reward, and told repeatedly that they are destined for great things, many are quick to place blame elsewhere when something goes wrong, and inclined to believe that bad situations will sort themselves out—or will be sorted out by parents or other helpers.

"Trained throughout childhood to disconnect performance from reward" - or, as Melanie Phillips put it, "All Must Have Prizes".

A Few Snowflakes On The Curate's Hat

We're doomed : Jeremy Warner on our knacked economy and inflation. I myself am of the opinion that Brown's 'low inflation' economy was based on Chinese productivity keeping goods prices down and mass immigration keeping service wages (and prices) down - while inflation in housing roared ahead. What's this 'spare capacity' going to produce ?

Much of the present City debate around inflation therefore seems to me to be too simplistic and somewhat wide of the mark. The standard view, reflected by the Bank of England, is that once the present spike in inflation is over, abundant spare capacity in the economy will force prices back down again, allowing the persistence of very low interest rates into the indefinite future. This in turn will underpin house and other asset prices, including shares.

I'm not sure that either of these assumptions is correct. In the old days of largely closed domestic economies it might indeed have been true that a collapse in output would cause price and wage pressures to abate.

Unfortunately, the inflationary pressures of the future are quite unlikely to come from domestic demand. Instead, they will come from emerging markets, where fast growing consumption is already causing prices to rise sharply. After decades of exporting disinflation to the West, these markets could soon be exporting quite serious inflation.

The implications for monetary policy are alarming. During the Great Moderation, disinflationary pressures from China and Eastern Europe allowed UK interest rates to be lower than otherwise, which in turn helped cause upward pressure on asset prices and a bubble in credit.

There is now every chance of the reverse phenomenon occurring; interest rates might have to be higher than warranted by domestic demand to keep inflation at bay. That in turn will be bad news for growth, employment and asset prices – unless, of course, the Government wants to opt for a higher inflation target ...

I've been saying for a year or more that they won't be able to resist keeping the tap turned on and inflating their way out of one trouble and into a different sort. What would a Cameron/Osborne administration do ? Anyone know ? I can't make head nor tail of most of their pronouncements.

Two recent Alphaville posts raise the spectre of the press. I like this comment :

No, they'll say "the recovery is faltering and the economic situation worse than we thought, so more QE is required to safeguard recovery".

What they won't say is "we used QE to defer enormous amounts of economic pain and it also helpfully assisted the government in financing the deficit, but the trade-off is that all that deferred pain will descend like the wrath of god if we stop, because none of our structural problems, such as an unaffordable public sector and levels of household leverage, have been tackled, so we'll keep trying to defer the pain in the hope things get better on their own somehow. But they won't."

And this one :

'Just one more hit... I need it I just need it... I will quit tomorrow. I can quit. I will turn my life around...'

Oh Dear.

Can Pay, Won't Pay - Paul Kedrosky quoting an unnamed Greek banker on the debt crisis :

Once upon a time, Greece was a model small democracy. An extremely frugal government ran tight budgets and provided an extremely basic safety net, and truly threadbare services for a very low cost: Tax collected was minimal.

While tax rates may have been high, collection was virtually nil. A small oligarchy was the only source of capital and had the acumen, education and experience to deploy it as the country developed. Old families controlled the steel, cement, foodstuffs and construction companies that rebuilt Greece after the war. As recently as 1980, debt/GDP was at 30% and it would have been much lower were it not for the high costs of defense. When Greece joined the EU in 1980, all that changed. It was party time. Money that was sent to build the Greek infrastructure was funneled pretty much directly into the pockets of the oligarchy as well as the new Socialist oligarchy that emerged.

This was not chump change. It was 6% of GDP for 30 years. With the exception of farmers, who did extremely well off of the Common Agricultural Policy, the rest of the money went pretty much straight to Swiss bank accounts. As an example, Greece has paid 250% over list for F16's and Mirage fighters and has spent EUR 750 million for an airport that was built by the same company that originally bid EUR 220 million for the project. No prizes for guessing what happened there. Once the addiction to easy money set in, the government of Greece was transformed from a lean provider of defense, basic health, basic education, a basic road network and extremely basic pensions to an auctioneer of projects to the oligarchy.

The families who control business in Greece used a system of bribes the government was happy to accept and set up a newspaper each to deliver threats its members would rather not. Sticks and carrots, and lots of Euros. And once the system was established, there was no need to stick to the money that was coming from the EU. ERM entry cost our politicians the printing press, but thanks to low EUR rates, the government could now service previously unthinkable amounts of debt with impunity. A residual part of that money may have ended up in useful projects, but the bulk ended up in the pockets of the twenty families who run Greek business.

A big chunk of that money, in turn, has been invested by these families in bringing to Greece every foreign franchise from Starbucks and Pizza Hut to IKEA and Stanley Kaplan, driving existing companies out of business in the process. In summary, EU funds have done to Greece what oil did to Nigeria, while low EUR rates have allowed the government of Greece to be able to service a debt of 100% of GDP, most of which has gone straight to the pockets of the oligarchy. Man on the street, with the exception of the farmers, has not benefited one jot. This does not make all Greeks poor. Shipowners do very well, and a natural resource called the sun is very helpful to our 165,000 hoteliers. Man on the street never saw the benefit of the 250 billion the government has borrowed. Ergo, support for austerity now that the bill has come is zero. You won't see anybody accept an Irish solution in Greece.

The notion that Brussels will dictate to Greece terms on public sector wages and impose a May deadline are, frankly, comical.

Important Personal Qualities For Other People

I've been reading Normblog for seven long years now, and the years haven't actually seemed that long - whether that's Norm's writing or the phenomenon he noted here I'm unsure.

His profiles are always interesting and occasionally raise a wry smile when noble theory and human practice are closely juxtaposed. Here's writer Alis Hawkins :

Do you think you could ever be married to, or in a long-term relationship with, someone with radically different political views from your own? > No.

What do you consider the most important personal quality? > Tolerance.

A Small Postette

at Biased-BBC.

"The Cat Ate My Data"

Phil Jones, the professor behind the "Climategate" affair, has admitted some of his decades-old weather data was not well enough organised. He said this contributed to his refusal to share raw data with critics - a decision he says he regretted.

But Professor Jones said he had not cheated over the data, or unfairly influenced the scientific process. He said he stood by the view that recent climate warming was most likely predominantly man-made. But he agreed that two periods in recent times had experienced similar warming. And he agreed that the debate had not been settled over whether the Medieval Warm Period was warmer than the current period...

His colleagues said that keeping a paper trail was not one of Professor Jones' strong points. Professor Jones told BBC News: "There is some truth in that".

Hmm. I wouldn't win any prizes for a tidy desk myself, any more than this chap would. But it is somewhat unfortunate.