I’ll start with the economics. Goodhart gives a fair summary of the
current consensus about the effects of immigration on the labour market.
It comes in two parts. First, in the medium to long term the ‘lump of
labour’ fallacy is just that: it isn’t true that the number of jobs in
the economy is fixed, and more jobs for immigrants doesn’t mean fewer
for natives. Second, the evidence suggests that in the UK immigration
has little or no impact on employment even in the short term; it may
drive down wages for the low-skilled, but the effect is small compared
to that of other factors (technological change, the national minimum
wage and so on). These things are now well established, and Goodhart
appears to accept them. So it comes as something of a surprise that he
should cite with approval Fraser Nelson’s observation that mass
immigration ‘broke the link between more jobs and less dole’, and that
he goes on to argue:
To have millions of long-standing
residents sitting at home on benefit while poorer foreigners come in
and take the jobs that they should be doing makes no sense for the
country as a whole; it creates a kind of Saudi Arabianisation of the
labour market. The number of British citizens on out of work benefits
has fallen from a peak of about six million in the early 1990s but even
in the long boom it never fell below 4.5 million.
It
can certainly be argued that had better policies been pursued – in
particular, if more had been done to get lone parents and those on
incapacity benefits back into the labour force – the number of people on
benefits might have fallen even further in the 2000s. But the idea that
reducing immigration would have made a meaningful difference doesn’t
fit the facts, in terms of timing or geography. In the period between
1979 and the early 1990s, which Goodhart describes as one of low and
stable immigration, the numbers on out of work benefits tripled to six
million, from two million in 1979. This wasn’t just an effect of the
deindustrialisation of the early 1980s; much of the rise actually came
in the early 1990s. And the persistence of benefit dependency in the
2000s among long-standing UK residents was at least as great in areas
with few immigrants as in those with many.
Goodhart
cannot escape from his instinctive view that the political economy of
immigration is a zero-sum game, even as he accepts that both economic
theory and the evidence say no such thing. ‘A disproportionate number of
new jobs,’ he writes, ‘seem to have been going to recent
immigrants.’ But this is an expression of the ‘lump of labour’ fallacy
he elsewhere dismisses. The belief that if immigrants get ‘more’ of
something (jobs, education, opportunities, political power), natives (or
whites) must get less. This guides his discussion of the local economic
impact of immigration in Merton, South-West London: ‘Poor whites [are]
doing the worst of the lot.’ Such people have ‘mainly opted out: they
seldom vote, and a lot of the younger people are “Neets” – not in
employment, education or training.’ It isn’t entirely obvious from
Goodhart’s description of Merton why immigration is responsible for
this. Do the immigrants displace natives from jobs, schools and polling
booths, or do they somehow drag them down? Either way, such facts as
there are in this sentence appear to be wrong. Do fewer working-class
whites vote in Merton than elsewhere? I’m not aware of the existence of
any statistics on local voting by ethnicity or class, but both the
Merton constituencies (Mitcham and Morden, and Wimbledon) had a higher
than average turnout at the last election, and more than two-thirds of
Merton voters are white. As for Neets, the Merton Council report cited
by Goodhart found 87 white Neets aged 16-18. Is that a lot? Not really:
there are about 2300 whites in the relevant age group. Whether the
council’s data are directly comparable with official statistics isn’t
certain, but if they are then the chances of a white teenager being Neet
are considerably lower in Merton than they are nationally. (The
official statistics suggest that Merton’s Neet rates are pretty low.)
Goodhart
is of course right that young Brits, especially those not from
middle-class backgrounds, are having a pretty hard time. But the
question is why. Think about it this way. Suppose you’re poor, young and
white: where in the UK don’t you want to be? That’s a subjective
question. But from an economic point of view, one might want to consider
such criteria as the proportion of young people who don’t get decent
GCSEs and the number who are out of work. By those yardsticks, the
answers are reasonably clear. Nationally, just under 60 per cent of kids
whose first language is English get five good GCSEs including maths and
English. There are eight local government districts where that figure
dips below 50 per cent: Hartlepool, Middlesbrough, Knowsley, Blackpool,
Barnsley, Hull, Nottingham and the Isle of Wight. Job prospects for
young white school-leavers in these areas are, not surprisingly, poor:
the proportion on the dole ranges from 12 to 18 per cent, compared to
the national average of about 8 per cent. Yet of these areas, only
Nottingham has a substantial non-white or immigrant population. In
London, children whose first language is English are somewhat more
likely (about 62 per cent) than the national average to get five good
GCSEs, despite considerably higher poverty rates. Young whites in London
don’t often end up on the dole: only about 5.5 per cent, close to the
lowest rates in the country. Things are a little worse in Merton, where
GCSE results are about average, and the proportion of young whites
claiming benefits is about 6.5 per cent, but that’s still well under the
national average.
So, to put it bluntly, if you’re going to be
white, British and poor, all the statistical evidence suggests you’d be
better off being born in Merton – or anywhere else in London, surrounded
by immigrants – than in the mostly white areas where educational
outcomes, in particular, are worse. We need to be careful here.
Correlation doesn’t imply causation. There are lots of possible
explanations for the figures I have given; in particular, the remarkable
improvement in London’s schools, especially for more disadvantaged
children, over the last decade. And there’s little doubt that the
depression of local economies in some Northern cities is responsible for
both the high unemployment and relatively low immigration in those
places. Econometric analysis suggests that there’s little or no
association between high immigration and employment or unemployment
rates.
Goodhart is right that we should be worried about the
future of ‘our’ young people from disadvantaged backgrounds. Youth
unemployment was stubbornly high even before the recession, and labour
market prospects for young people without skills and qualifications are
likely to remain bleak if and when the economy recovers. But surely he
should be focusing his attention on those areas where young people’s
prospects are objectively worse, not places like Merton, where they
appear to be improving. And surely the issues to focus on are the ones
that matter in those areas: economic decline, poor schools, employers
uninterested in developing the skills of young people in low-paid jobs –
not immigration. To believe, as Goodhart does, that the ‘renegotiation
of EU rules on free movement to allow for local worker preferences’ (in
other words, to keep out Romanians or Bulgarians) would do anything to
improve the life chances of young Brits isn’t just wrong, it’s a
dangerous delusion.
The
strain is even greater when Goodhart turns his attention to the
supposed decline in social mobility. It has become the conventional
wisdom on both right and left that social mobility is decreasing. As
Goodhart recognises, the extent of the decline, let alone its causes, is
controversial; while mobility as measured by income does appear to have
declined, the story is less clear when it comes to social class. But he
decides to blame immigration in any case: ‘One third of all graduate
jobs in London are now taken by people born outside Britain,’ he writes,
‘which may be one factor behind the apparent slowdown in social
mobility in recent years.’ How on earth are we supposed to understand
this claim? I’ll make two remarks. First, the disputed evidence of the
decline in social mobility in the UK relates to the period before 2000;
the very sketchy subsequent evidence we have suggests there has been no
further decline. As with Goodhart’s analysis of benefit dependency, the
effect he is looking at – in this case the putative decline in social
mobility – does not coincide with the years of high immigration. Second,
Goodhart’s theory sits a little oddly, to say the least, with his
general argument that recent migrants have been disproportionately low
skilled, depressing wages and reducing job opportunities for low-skilled
natives, while benefiting better-off natives. Indeed, he cites the
best-known paper on wage impacts, which, as he says, ‘found that
immigration overall had led to a small increase in average [native]
wages’ and a somewhat larger increase in the wages at the top end, ‘but
also a small reduction in the wages of the bottom 20 per cent’. These
effects are fairly minor, but they are hardly consistent with the idea
that British graduates are losing out.
So let’s ignore Goodhart’s
talk of social mobility and reinterpret the sentence in a way that makes
sense. Let’s assume he is simply saying that there are fewer graduate
opportunities in London for natives because so many immigrant graduates
come here. If that were the case, presumably the London graduate labour
market would be oversupplied with graduates compared to the rest of the
country, which is much less attractive to high-skilled immigrants; as a
result, the graduate earnings premium would be lower in London, and
native graduates would seek employment elsewhere. Yet every quantitative
analysis tells us that graduates earn more in London compared with less
skilled workers than they do in the regions. London has more graduates,
both foreign and native, than anywhere else, but it is not oversupplied
with them – on the contrary, the market suggests.
There are
obvious reasons for this. ‘Clustering’ affects high-skill sectors
disproportionately; some high-skill/high-pay industries are concentrated
in London; and some graduates in London are part of an international
labour market (made up of a number of globalised cities) rather than a
domestic one. But by these lights, an increase in the immigrant graduate
population will tend to drive up wages and labour market opportunities
for natives. Elsewhere Goodhart appears dimly to recognise this, noting
that high-skilled immigrant workers can be both substitutes for and
complements to natives. He gives two examples: the City, where
immigration probably leads to more and better-paid opportunities for
natives; and the Premier League, where he argues the reverse. I’m not
convinced by the second example. The number of skilled jobs – in media,
marketing etc – generated by hosting the most successful club league in
the world far outweighs the number of British footballers displaced from
it. But in any case, the argument that the negative impact on native
job prospects of allowing in immigrant footballers outweighs the
positive effect of allowing in immigrant workers in the financial sector
seems a hard one to make, and Goodhart doesn’t even try.
*
What
of the social impacts of immigration? I have some sympathy with
Goodhart’s instincts concerning the importance of integration and the
negative impact of segregation. Britain lacks a strategy, as he says,
‘either for new arrivals or for settled but “stuck” communities’. In a
relatively small country like the UK, there is no future for communities
isolated from the economic and social mainstream. Both immigrants and
the country as a whole will be much better off if immigrants learn
English soon after arriving, participate fully in the labour market, and
send their children to schools that are not dominated by a single
ethnic group. But Goodhart takes the same eccentric approach to the
evidence here as he did with the economics. He manages a reasonable
summary of the research, which shows that the non-white population is
diffusing into previously all-white areas and that, at the same time,
many urban areas are becoming ‘majority-minority’ rather quicker than
expected – although the number of people from an ethnic minority
background who live in areas dominated by their own ethnic group remains
small. Most non-whites live in fairly diverse areas; it is whites who
don’t. This is generally accepted by geographers and demographers, and
isn’t exactly surprising. Yet when it suits Goodhart, he just ignores
the facts. Take his reference to ‘the little Somalias … that dot many of
our big cities’. The recently released, extremely detailed census data
suggest that, even allowing for classification issues, you’d be hard put
to find a single ward (each has a population of about ten thousand)
anywhere in Britain where more than one in ten of the population
identify as Somali.
By
comparison, on Chicago’s South Side, something over half a million
African Americans live in a contiguous geographical area which is about
95 per cent black. But that doesn’t stop Goodhart making an absurd, some
would say offensive, analogy with the US. Talking about Waltham Forest
in North-East London, he writes: ‘In America, this is called Sundown
Segregation; people mixing during the day but going home to quite
separate neighbourhoods.’ ‘Sundown towns’, as the sociologist James
Loewen has documented, were places in the US where, before the enactment
of civil rights legislation, black people (sometimes in earlier years
also Chinese, or Mexicans) were not permitted to remain after dark. I’m
not sure which is worse: the irrelevance of this concept to modern
Britain; the failure to do the elementary research required to establish
the origin of the term; or the ugliness of comparing Waltham Forest to
American towns that once displayed signs reading ‘Don’t let the sun set
on you, nigger.’
Even worse is Goodhart’s discussion of specific
communities where there are very real economic and social problems. I
know little about Bradford, so have no firm basis on which to judge his
plausible-sounding claims about the Pakistani immigrant experience
there: much higher segregation than in London, the dominance of clan
politics, the impacts of chain marriage migration etc. A friend in
Bradford – a professional, leftish woman of Pakistani origin, working in
education – told me that what he has to say is ‘unscientific’, based on
‘cheap anecdotes and quite frankly baloney’. No reason you should take
her word for it, so let’s provisionally accept Goodhart’s suggestion
that there is a prima facie case that first-cousin marriage is
responsible for a higher than average proportion of birth defects among
Bradford Pakistanis. He cites some relevant research, but follows it up
with assertions which are unsubstantiated, inaccurate and alarmist:
‘Bradford has just opened two more schools for children with Special
Educational Needs,’ he writes. ‘On some measures nearly half of all
children in the area qualify for special help.’ No source. However, the
Department for Education publishes the statistics, and it turns out that
in Bradford, the proportion of children who ‘qualify for special help’
is about 21 per cent. Well, 21 per cent is not ‘nearly half’. It is, in
fact, only slightly higher than the national average of 20 per cent. And
it is significantly lower than in some other, mostly white places.
Nationally, the highest figure is 27 per cent, in north-east
Lincolnshire. What’s going on? Maybe the locals marry their cousins
there too. But I think I’ll restrict myself to saying that this is a
complex phenomenon on which I’m no expert. It’s a pity Goodhart didn’t
do the same.
Despite this, Goodhart’s take on the triumphs and
travails of Britain’s immigrant communities is by far the best part of
the book. He has a thoughtful description, for example, of the generally
poor economic and social outcomes of Somalis in the UK, ascribing it in
part to ‘a British society which has been decent enough to let them in
but then too indifferent to help them join in’. At the same time he
admits there are signs of progress; and for those of us who believe that
the glass is half full, there is no reason to believe that the Somalis
are any more doomed to failure than other groups. Indeed, while noting
that the Polish experience has been ‘simpler and easier’, he does well
to avoid contrasting ‘good’ and ‘bad’ immigrant communities. Almost
despite himself, Goodhart ends up painting a relatively optimistic
picture. ‘We have come a long way in a short time,’ he writes. ‘A
country that less than a hundred years ago believed that it was its
right to control the destiny of many “lesser breeds” has now invited
them across its threshold and learned to treat them more or less as
equals.’
After all this, Goodhart’s policy recommendations come as
a damp squib. It’s difficult to disagree with much of what he says
about integration, but then very little of it is very new. For example,
increasing the allocation of funding for English language teaching for
poor immigrants at the expense of translation services was settled
government policy five years ago though under austerity the provision
for such teaching has gone by the board. More interesting and
potentially controversial is the suggestion that the government should
actively promote integration in schools, if necessary by means of
targets, quotas and other measures that might directly restrict
individual choice. In this I agree with him wholeheartedly. It is
surprising that this recommendation hasn’t attracted more attention –
particularly since the evidence suggests that most of those whose
choices would be constrained would be white.
What is completely missing from
The British Dream,
however, is any sense that Goodhart is prepared to engage with the
positive case for immigration, or indeed for openness more generally.
This shows in his discussion of immigration policy, on which he has
surprisingly little to say. He ends up in more or less the same place as
the government, and lacks, just as the coalition does, any good
economic rationale for a set of policies that tend to exclude
higher-skilled migrants and students. Writing in the
Financial Times
recently, Goodhart defended the government’s aim of reducing net
migration to the ‘tens of thousands’: ‘So if more Britons retire to
Spain,’ he argued, ‘more space will be created for Canadian
nanotechnologists.’ Precisely. And, as I responded at the time, if fewer
Britons retire to Spain, we’ll presumably have to give up on those
Canadian nanotechnologists.
What
do those of us on the other side of the argument – economic ‘liberals’ –
believe about migration? We believe that, for all their problems and
failures, markets are usually the best way to allocate resources, and
that accordingly, a more rather than less open approach to migration and
trade will deliver better outcomes. By this I’m not talking primarily
about the short term – filling labour shortages and the like – but
rather about the longer term. We do not gain from free trade in, say,
cars with the EU because we or the French or the Germans have fixed
comparative advantages in the market, so that we produce one type of car
better and they another. We gain because trade increases competition
between different producers, diversifies the supply chain across the EU,
improves incentives for technological innovation, and has all sorts of
other difficult to measure but important effects that increase
productivity in the medium to long term.
The same is, in
principle, likely to be true of immigration. Immigrants don’t just fill
specific short-term gaps in the labour market. They bring different
skills and aptitudes, and transmit them to non-immigrant colleagues (and
vice versa); they can increase competition in some labour markets,
giving natives an incentive to acquire certain skills. Immigrant
entrepreneurs can increase competition in the markets for particular
products. And workplace diversity can increase (or decrease)
productivity and innovation. Immigration isn’t just about the movement
of labour but the movement of individuals.
There is an emerging
body of research evidence on these issues, which Goodhart ignores, but
we will never know precisely the channels through which immigration has
an impact on growth. Nor will we ever be able to put precise numbers on
it, any more than we can identify the contribution of Britain’s history
as a trading nation to our current prosperity. But we do know enough to
set a clear direction for policy – and it is the opposite direction to
that suggested by Goodhart and the government.
Goodhart, who holds
the ‘liberal elite’ responsible not only for immigration policy in the
last twenty years but also for British politics more widely, describes
himself as a ‘post-liberal’. By this he appears to mean that he has a
less market-oriented economic policy, and ‘greater respect for “flag,
faith and family” social conservatism’. Attitudes to immigration are
central to both: Goodhart’s social conservatism seems to mean a strong
presumption that the impact of ‘outsiders’ on British society is
negative, while his rejection of economic liberalism leads to the view
that the impacts of immigration on the UK economy are often negative
and, where positive, not worth the downsides.
The trouble is that
in order to make his case, Goodhart needs to place the blame for
economic and social problems on immigration or immigration policy, where
it is unlikely to be the main or even a significant cause. The result
is a frustrating book and one that ultimately falls into a trap it tries
hard to avoid. Goodhart is careful not to demonise immigrants,
individually or in groups. But that doesn’t stop
The British Dream being an exercise in scapegoating. That is dangerous for British politics, for public debate, and for policy-making.
