Saturday, May 24, 2008

The Cost of Labour

Given that New Labour were the ones who tried to stoke up anti-immigrant xenophobia in Crewe and Nantwhich, on the assumption that the 'white working class' is basically racist and authoritarian, we can almost bet that the government will place themselves to the right of the Tories on this question at the general election despite the evident failure of this strategy by yesterday morning. That is, while the Tories will be trying to position themselves as the nice party of progress, disavowing the furious xenophobia and anti-Islamic bigotry of the Conservative Party from base to peak, New Labour will do all but throw on the jackboots and chant "skinhead, oi oi" in the vain hope of staking out a 'populist' territory. Am I over-stating the case? Is this overly pessimistic? I don't think so. If the experience of Margaret Hodge didn't teach the Labour leadership that pandering to racism just bolsters the far right, then nothing could, not even the loss of 18.2% of the vote in a heartland seat on a high turnout.

Undoubtedly, many Labour members thought the campaign was disgusting. They will agree with Compass that the campaign was "poisonous" and "smacks of the poison spread by the far right". They will plead with the party bosses to come up with something to deal with spiralling inequality and slightly ameliorate the class structure that is generating so much justified resentment. And they can even offer a pragmatic argument, if no one will listen to the principled one. They can say that if the government stokes up racism about immigration, they can't expect to benefit from it because the racists will quite logically say that it happened under New Labour's watch and vote for someone else. But is anyone listening? Are there any forces capable of making this point heard? Does New Labour even have anything else to offer? Like I say, I think not. Brown may be overthrown, but he'll only be replaced by some oleaginous Blairite. We are just going to have to get ready for a 2010 atrocity, with all the filthiest rhetoric about immigrants and 'yobs', and all of the worst aspects of the government's social authoritarianism given a full public airing. The only possible antidote is the antifascist movement which, if it mobilises quickly and en masse, can undermine the vague 'respectability' that the media and politicians have been giving to racist arguments about migration and Muslims. As a start, United Against Fascism and Love Music Hate Racism have called a national demonstration against fascism and racism on 21 June, starting from Tooley Street behind the London Assembly building.

Anyway, that's a long intro to what this post is actually about. Anti-racist argument about immigration rightly stresses the contribution that immigrants make to the economy and the society in general. The TUC points to the benefits to public services, and our growing need to make up a labour shortfall caused by a declining birthrate and a longer life expectancy. We rightly point out that services we value could not have been built without the work of migrant labour. When we are told by some who should know better that immigration pushes wages down, empirical refutation isn't difficult to find. For example, a recent study for the Low Pay Unit found that overall pay tends to increase a bit as a result of immigration, although the lowest paid might experience a slight fall. Even conceding for a moment the ridiculous idea that addressing domestic inequality by raising barriers to preserve global inequality is some form of social justice, the evidence suggests that restricting immigration is a poor way to reduce domestic inequality. One kind of argument that sometimes comes out though, especially from pro-market commentators, such as Nigel Harris (whose book Thinking the Unthinkable is a very good treatment of the whole topic, despite his present neoliberal orientation), is that immigrants do the kinds of jobs that 'indigenous' workers will not, and that this leads to economic growth. Such is the view propounded by the Home Office. Now, it is just uncontroversially the case that, for example, the recently influx of Eastern European workers into the UK did stimulate growth and coincided with an overall rise in real pay for most workers. Undoubtedly, those workers were filling a supply gap that was not being met otherwise. Yet there are two problems with this kind of argument. The first is that it implies a kind of voluntary unemployment by British workers. The second is that it implies that the exploitation of migrant labour is okay, and actually a good thing. This may be a logical argument for some elements of the CBI, but it isn't our argument. It is true that the argument implicitly favours a freer movement of labour, against the global management and coercive systems (border controls, visa and pass systems, detention centres, extensive surveillance etc) which seriously weaken our class. To that extent, it is superior to the anti-immigration argument from the likes of Polly Toynbee, who has falsely argued that higher immigration leads to greater competition for work and lower wages all round. But it still misconstrues the case.

I find it useful just to look at what Marx said about the source of wages. In Capital, Volume I, chapter six, the argument is put that wages are the payment, not for labour, but for labour power. That is, capital is augmented (makes a profit) because it withholds a definite quantity of unpaid labour. What one is paid for is labour power, one's capacity to work, understood as "the aggregate of those mental and physical capabilities existing in a human being, which he exercises whenever he produces a use-value of any description." One is paid so much as is necessary to reproduce that labour power in its "normal state" - Marx speaks of reproducing the means of subsistence, but here he clearly refers to a historically produced subsistence as opposed to the minimum amount of nutrition, clothing and so on that one could possibly live with. The means of one's subsistence can include sufficient wages to use the internet, purchase a car, mortgage a house or pay rent on a flat, have the normal range of consumer durables, including a washing machine and perhaps any other labour-saving device that allows you to get to work on time and have sufficient hours after the working day to unwind and recuperate for the next eight hours. It would also include support for a family, which is after all the unit through which the labour is replaced. If you look at the UK national minimum wage, or the US mimimum wage, the level is determined not by reference to some ahistorical level of bare subsistence, but by how much it costs to reproduce one's labour in the here and now. If the rate is far too low in both cases, this is a concession to the needs of poverty employers whose margin of profit is slight. In comparing the wages of migrant and 'indigenous' workers, one therefore has to look at the determinants of the cost of labour power.

The combined costs of reproducing one's labour power as a Polish worker is lower than the cost of reproducing one's labour power as a British worker. We can suppose this is given some expression in the minimum wage levels in both countries. The British minimum wage is roughly equivalent to 1,190.49 per month, whereas the Polish minimum wage is roughly 329.49 per month. So, suppose a degree-educated twenty-something man migrates from Warsaw to London for a year or two to get some money together. Say he has a wife and small children. As will often be the case, he takes a demotion and works in relatively low-skill jobs for wages that would not sustain much of a life in London, but will support a single man in cheap accomodation and allow him to send a bit home every month. Further, because of his precarious position, the employer has more leverage and can extract more intense work and higher levels of productivity (naturally, the employers prefer to speak of the admirable motivation of such workers, as if it was just a cultural quirk rather than the result of a particular mode of capitalist discipline). In the case of someone who has got here by illegal means, the advantage is even more decisively on the side of the employers. It is a similar story with undocumented workers in the US. So, where a job might have gone unfilled because the cost of reproducing labour was too high for the employer to afford it, suddenly he might be able to hire two or three additional workers. The rate of employment can actually increase dramatically as a result of such immigration, and in fact that seems to have happened.

Necessarily, anti-racists have to play the numbers game. When the right complains that immigration is somehow deleterious to our economy and public services, we rightly point to increased employment, higher growth and increased tax receipts. But of course, the advantage to the employers partially depends upon this international coercive apparatus which loosely corresponds to a global 'colour bar'. It maintains a rough segregation of labour that permits the continued flow of managed migration without allowing the cost of labour power to equalise across nationalities. That is far from the 'free movement of labour', because freedom is impinged variously by quotas, by status differentials, by a plethora of restrictions that are designed to enhance profitability. The basis upon which socialists support free movement for labour is not that it delivers cheaper labour for business, but by contrast that it strengthens us as a class to be able to move wherever there is work, rather than existing as part of a domestically-confined large reserve army of labour. At the moment, European capital supposedly requires 8% unemployment - the 'natural' or 'non-accelerating inflation' rate of unemployment. Anything lower and the bargaining power of labour pushes up the cost of labour power (that's the 'accelerating inflation'), which is disadvantageous to the employers. However, we don't necessarily fancy being appendages to the machinery of capital, and that is what we become when migration is restricted to suit its interests.