Interesting article by Don Flynn (formerly director of Migrant Rights Network) arguing that immigration does not suppress wages. He cites OECD data on GDP and wages since the 1970s (but he doesn’t provide any links to the source; and doesn’t make it clear if he is referring specifically to the UK; or what year the dataset ends on – OBS will ask him for this info).
According to Don, the OECD data shows that as a proportion of overall wealth created (he uses GDP as his measure) wages have been declining – from a high of 64 per cent in the mid- 1970s to a low of 52 per cent in 1998, when a slight recovery began.
If true, this is very significant. It means that the decline in proportion of GDP going to wages actually began AFTER tighter immigration controls were enacted (in the 1960s and 1970s). If true, this is a powerful argument against the idea that immigrants are suppressing wages, and points to employers and government policies as responsible for suppressing wages. If true, it suggests – as Don Flynn puts it – a working-class case for freedom of movement. It is employers and politicians, not immigrants, who are driving down the wages of ordinary working people. Immigrants and ordinary working people have a common interest in combining to resist wage restrictions. (And there are groups – like the Independent Workers Union of Great Britain – organising in this way).
This is worth investigating further. Some initial questions I have.
If wages have been declining as a proportion of GDP, what has been increasing? Has there been, for example, an increase in proportion going to pensions, or capital investment, or national debt payments? If the decrease is entirely accounted for by the increase in proportion going to pensions, then this may reflect an aging population, rather than an attack on the living standards of the working-class.
Wages overall as a proportion of GDP have not been evenly distributed across the workforce. There is significant income inequality in the UK. Has the decline in wages been concentrated in sectors where immigrants are concentrated, rather than in sectors where they have not (as some academic research suggests)? If this academic research is correct that does not mean that there cannot be a working-class argument in favour of free movement, but it does appear to invalidate Don Flynn’s argument.