Brexit Blog #5 : Is free movement of labour exploitative?

Resistance to migration is nothing new.

African-Americans freed from slavery after the American Civil War migrated north to seek work in the Yankee industrial heartlands. They were soon competing for jobs, thereby creating tensions with the white working class. Many of those were Irish immigrants, who had themselves been treated with hostility when they arrived.

At the climax of Elizabeth Gaskell’s prophetic novel, North and South, published in 1855, the ruthless mill owner in the North of England tries to break a strike by importing Irish workers who are prepared to work for less than the strikers are demanding.

There are numerous examples of the same thing. The latest must surely be the UK’s EU referendum. Even if not every migrant was competing for work with the native workforce – some took jobs that the British had spurned – many did, causing resentment.

"one of [the] central tenets [of CST] is that labour is not of its nature a mere commodity, to be bought and sold at will. It is human."

If labour is treated merely as a commodity to be bought and sold in a market place, when the supply exceeds the demand the price goes down until a new equilibrium is found. Unemployment is one possible outcome; a general depression of wage levels is the more likely result. That helps to control wage inflation. But even if it boosts GDP, it is a factor contributing to a low-wage, low-productivity economy. This is not the migrants’ fault; it is the system they are caught up in.

It is often claimed that the EU is founded on the principles of Catholic Social Teaching. But one of its central tenets is that labour is not of its nature a mere commodity, to be bought and sold at will. It is human. And that applies not just to workers who are mobile but to those who are settled in communities, struggling to make ends meet for their families. Human beings have rights, feelings, obligations and aspirations.

CST says the demands of labour must take priority over the demands of capital, which is merely a store of material wealth. The commodification of labour – which the EU’s free movement of labour implies – risks ignoring all aspects of the humanity of the worker except the value of his or her labour in the marketplace. The technical name for this is alienation.

Since Rerum Novarum in 1891, and especially Laborem Exercens in 1981, CST has stated that this must be resisted.

When a region covered by a single labour market includes areas with low pay and high unemployment, and areas with higher pay and lower unemployment, people move from one to the other. That is what has drawn Polish and other Eastern European workers to Britain. Inevitably, the people already here felt undercut in the jobs market. Immigration may have benefited the economy as a whole, and may have benefited the migrants, but the people here did not see how it had benefited them.

As Mrs Gaskell foresaw, one of the corrective mechanisms available to workers is industrial action. This squeezes the supply side of the equation until an employer comes to terms. But strike action by itself is not an effective weapon against labour migration. The alternative is to try to block the inflow of migrants, to squeeze the supply of labour that way. To many workers, the Leave campaign slogan, “Taking back control of our borders”, meant exactly that.

"the free movement of labour is overdue for rigorous rethinking."

Of the EU’s four freedoms – goods, services, capital and labour – there is general consent that the first three have, so far, only been partly achieved. It is odd therefore that the one most implacably insisted upon has been the fourth. It is insisted upon regardless of the fact that it was devised when the membership of the European project was much smaller than now and more uniform in prosperity.

The theoretical model, like the other three freedoms, was initially about flexibility within a situation approaching equilibrium, to improve economic efficiency. It was not designed to encourage mass migration from poorer parts of Europe to richer parts. The very existence of poorer parts and richer parts was deemed, at most, to be temporary, as growing prosperity ironed out the differences. Instead, the eurozone has apparently locked in those differences rather than speeding up their removal.

So the free movement of labour is overdue for rigorous rethinking. What is the impact on it of globalisation? From a human point of view, what are the pluses and minuses? Does it really lead to efficiency, or just exploitation? And why have the other three freedoms not received the same priority as the free movement of labour?

Clifford Longley is a journalist and writer, and a trustee of the Centre for Catholic Social Thought and Practice.