Thursday, February 5, 2009

Irish Jobs for Irish Workers

With the unemployment rate now back to where it was in late 1997, there is one thing we can be sure of: a rising demand for foreign workers to leave Ireland. The ugly genie of xenophobia is being unleashed across Europe - as evidenced by the recent protests against foreign workers in the UK.

Nearly one in five unemployed workers in Ireland (18.6% in December pdf) are foreign nationals. Over half of these are EU accession country citizens (Poland etc), while the second largest group are English. Fewer than a fifth of foreign nationals signing on the live register in Ireland are non-EU citizens. Bottom line: they are mostly entitled to be here under EU law.

Even if that wasn't the case, would a demand for 'Irish Jobs for Irish Workers' (paralleling Gordon Brown's disgraceful call for the same for British workers) make a difference? Absolutely not. As socialist commentator Chris Dillow has noted about the UK protests:

1. A survey (pdf) by Christian Dustmann and colleagues shows that there is no evidence that immigrants reduce British wages on average. Yes, there’s pressure on unskilled wages. But this is offset by higher wages for more skilled workers.
2. David Card estimates (pdf) that the effect of recent immigration upon relative US wages has been “small”.
3. A survey of the impact of migration from new EU member countries to older EU countries finds that “any negative effects in the labour market on wages or employment are hard to detect.”

As he goes on the explain in a subsequent post:
The global recession is raising demands for protection against free trade. This is illogical. The question: does free trade hurt workers relative to some set of protectionist policies? can be answered independently of the state of the business cycle; it’s not the case that free trade is good in a boom but bad in a recession. The recession is just raising the salience of the gross losses from free trade; it’s not systematically affecting the net gains.
In other words: a rush to the protectionist doors in labour markets as in trade will damn us to a far longer and deeper recession than would otherwise be the case. Moreover, foreign workers are by definition more mobile than their indigenous counterparts - here in Ireland Constantin Gurdgiev estimates that two foreign workers are leaving for every one signing on the live register. The 'problem' of unemployed foreign workers is self-correcting in the main.

Sadly this has not stopped the Party of European Socialists demanding greater labour market controls in the EU, aided and abetted by trade unions. They really should know better, but there you go.

5 comments:

  1. Very fair comments. I wonder though, about the economic literacy of the Irish people. After all, these are the people who think it is perfectly fair to expect a government to support both high spending and low taxes, and get upset when this three card trick can only be sustained for a mere decade.
    The simplicity of blaming Johnny Foriegner seems right up our street.

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  2. And the signs in Poland saying "No Irish" are what now?

    Ah, I agree, I'm just stirring, but remember even the indigenous work force are traditionally pretty mobile.

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  3. I'm undecided about all of this. I certainly don't like seeing the likes of the BNP having grist to their mill. However, global;isation has mucked everything up and if there is going to be a realignment of capital and mass unemployment ... why not protectionism and a return to community produce, manufacture and service sectors. As I say, I'm undecided but the world is changing and it will be largely unrecognisable ...

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  4. I don't support protectionism, whether in labour markets or otherwise. However, the effort(by economists!) to persuade people that an increase in labour supply will not exert downward pressure on wages is truly one of the wonders of the world.

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  5. I believe people who worked here in Ireland and paid their taxes are entitled to be here.

    What about families who bought houses, their children went to school and etc? What? Go back now?

    If all immigrants/foreigners will go away, who will rent all the apartments and houses built in the boom time? What about colleges who make millions on part-time non-eu students/workers?

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