The case for mass migration is built on lies

It expanded demand. It filled all the jobs the British didn’t want to do. It made the economy more dynamic, and it rescued us from demographic stagnation. For the past twenty years, everyone from big business to the economic establishment to Left-leaning wonks pumping out think-tank papers lectured us on how mass immigration made no difference to wages. In fact, it made us all richer.

But hold on. Now that we have left the EU and put in place some modest, normal restrictions on who can come into the country, it turns out that wages – and blue-collar wages most of all – are soaring. The immigration lie has been exposed for what it was. A deceit. And we are owed an apology.

If Shell had a couple of tanker drivers for every “expert” who told us that mass, low-skilled immigration had no impact on wages then the fuel crisis would be fixed in the blink of an eye. Common sense, and the briefest acquaintance with chapter one of an economics textbook, would seem to suggest that if you increase the supply of something – in this case workers – then the price will go down. And if there is unlimited extra supply, the price will never go up.

Although everyone accepts that that is true of most commodities, for some reason labour was viewed as an exception. In fairness, there are some differences. Additional people earn and spend money, so to some degree expand the economy. And often the new arrivals weren’t competing directly with native workers. Lots of oh-so-clever models were constructed to prove there was no impact. Anyone who argued otherwise was sneered at for ignoring the “evidence” and dubbed a bigot.

Now that we have restricted freedom of movement from the EU, what is happening? Wages are rising rapidly. Average earnings are going up 8 per cent annually, and in trades such as transport or construction by 20 per cent.  While this has much to do with the effect of workers returning from furlough, these are still astonishing figures.

The Labour Party, the main architect of unrestricted immigration, ties itself up in knots over whether to back a £15 minimum wage, deaf to the irony that most companies would kill to find someone willing to work for less than twenty quid an hour right now. If this was a lab experiment, and to some degree it is, the conclusion would be clear. Turning off the flow of workers increases salaries.

With unlimited access to a young, talented workforce from Poland, Hungary and the Czech Republic, British companies became hooked on cheap labour. Why spend hundreds of thousands of pounds automating that supply depot when an agency in Budapest could supply plenty of guys to do the night shift at minimum wage? Who needs to spend money on complex check-in software for a hotel when you can hire a cheerful Portuguese youngster for peanuts? It was great for profits, and also pretty good for skilled professionals who didn’t compete for those jobs. But it was hardly great for productivity.

Even worse, we created industries based entirely on cheap imported labour. Britain is the only major developed country where hand car washes have been available everywhere. We produce far more chicken than Germany, although it is a larger country (and not the organic, free-range kind, but the battery, force-fed stuff) using an immigrant labour force. Does that make any sense? Not really. It is tough for the owners of battery chicken factories, but it makes more sense to import birds from the EU than people.

Sure, there will be some disruption. And some prices will rise, although in other cases profits will be lower instead. We are witnessing that now. The Government could have planned for the transition better, and so could business, but we need to keep a couple of points in mind. The market works through shocks and disruption. They are not usually this extreme, to put it mildly, but they are also part of the process. And it is very difficult to plan an economy. You can try, but there’s no point being surprised if it goes wrong.

The important point is this. The experts and business leaders who told us immigration didn’t impact wages got it badly wrong. The result? Wages stagnated for millions of blue-collar workers for years. We won’t get an apology – but we also shouldn’t listen to them again.