Is the boat full?

Some in Ireland like Labour Party leader Pat Rabbitte (perhaps unwittingly) have begun espousing views more akin to Europe’s populist radical right parties to address fears and resentments by offering scapegoats, namely immigrants. It is as if our very national identity depends on homogeneity and can’t encompass variety. It is based on little more than an “us” and “them” ideology. There is an interesting piece on this here by Sieglinde Rosenberger. Whereas the European populists say “eigen volk eerst” (own people first), “Österreich zuerst” (Austria first), and “les francais d’abord” (the French first) or “Das Boot ist voll” (the boat is full), our one seems to be that immigrants are “pushing down Irish wages”, “pushing up Irish house prices”, and of course the big one; “threatening our very lifestyle and democratic values”.
Hard to blame the immigrants for taking our jobs when we have full employment but no doubt that will come if the opportunity arises along with doomsday predictions that the streets of Dublin will run red with rivers of Polish blood.

Manus O’Riordan in the Irish Times seems to have bought the idea that the recent wave of immigration is undermining wages and conditions for Irish workers, citing figures released by the CSO in December arguing that despite average hourly earnings for skilled operatives in the construction sector increasing by 7.3 per cent in the year ending September 2005 and earnings for unskilled and semi-skilled operatives by 7.1 per cent, severe job losses in the construction sector are down to immigrants.

To his credit, he qualifies his view by admitting that, currently, data on the impact of immigration on the labour market are not being gathered but bases his argument on the following.

“In the year ending June 2005, average weekly earnings in banking, insurance and building societies increased by 5.5 per cent. This is compatible with a modest degree of pay drift above the 4.1 per cent basic terms of Sustaining Progress.

However, a new CSO release in December showed that in the year to September 2005, average weekly earnings in the sector were now rising at only 1.7 per cent. What had happened? In the three months from June to September, average weekly earnings decreased by as much as 2.8 per cent.

The Quarterly National Household Survey shows that in the year ending September 2005, foreign nationals accounted for more than 28 per cent of increased employment in the sector. What happened can be explained by the line in the CSO’s background note that “average earnings will, for example, be decreased by staff mobility resulting in the appointment of replacement staff at lower salaries”.”

He also cites CSO figures for September 2005 which show that average hourly earnings of EUR 13.24 in food products represent a fall of 3 per cent on earnings six months earlier and a rate of EUR 12.54 in the office machinery and computers sector represents a fall of 4 per cent since March.

But his main beef is with the construction industry. “We have a steady stream of foreign nationals approaching Siptu’s construction branches to seek enforcement of their rights in respect of pay and conditions.

In September 2005, Mercer Consultants issued a Review of the Construction Federation Operatives Pension Scheme, conducted on behalf of the Pensions Board and the Department of Enterprise, Trade and Employment. It drew attention to the fact that only 65,000 out of 80,000 construction employees registered with the Revenue Commissioners were included in the pensions scheme. Mercer questioned the real status of another 70,000 operatives classified as “self-employed”….

…The Quarterly National Household Survey tells us that in the year ending the third quarter of 2005, the number of foreign nationals employed in construction doubled and they now constituted a third of the total employment increase in that sector.

Others like former Taoiseach Garret Fitzgerald have taken a more balanced view (subs required) to the current plight of Irish workers, managing also to dispel some of the wild myths being bandied about the moment, such as the one that over 160,000 East Europeans are working in Ireland.

“Manus O’Riordan does not, however, address the fact that, since our employment market was opened to workers from central and eastern Europe, the unemployment rate has actually fallen, by 4 per cent to 5 per cent. Moreover, this reduced level of unemployment was maintained right up to December, despite a considerable increase in the inflow from new member states during 2005.

So, if there has been significant displacement of Irish workers by immigrants in some sectors, the unemployment data suggest that they must have been re-employed elsewhere. And, in so far as there is a difference in pay rates between Irish and immigrant workers, part at least of this phenomenon could be accounted for by Irish workers moving to better-paid jobs, and being replaced by lower-paid immigrants in their old positions.

It is also important to dispel the belief that there are now more than 160,000 immigrants from new EU countries working here. That figure represents only the number who have at one time or another registered for work here, and there is some evidence that even three months after registration 30 per cent had not in fact taken up employment – in the “white” economy at any rate.

Moreover, many of these immigrants – perhaps a half – work here only temporarily. A large number in sectors such as horticulture and catering are in fact seasonal workers. Consequently, of the 160,000-plus who have registered for work here since April 2004, it is doubtful that more than 65,000-75,000 are currently employed. Such a figure would be broadly consistent with the CSO’s estimates of net immigration, derived from its quarterly national household inquiry.

The scale of the overall increase in employment that has taken place since May 2004 suggests that a high proportion of immigrants may have created new jobs for themselves, rather than replacing upward-moving Irish workers. The increases in employment that took place in the three 12-month periods ended respectively in March-May 2003, 2004 and 2005, were as follows: 30,000, 43,000 and 95,000.

Moreover, the figures for employment increases in the construction sector in these three successive 12-month periods were 9,000, 15,000, and 37,000.

But as employment in private construction firms rose by only 4 per cent between April 2004 and April 2005, many of these immigrants may have gone into business on their own. And if they accepted lower levels of payment for their work, this did not prevent the hourly wages of building workers from rising by almost 8 per cent in that period – although Manus O’Riordan suggests that this figure “totally lacks credibility”.

He backs this view with evidence suggesting that many employees have been improperly reclassified by unscrupulous employers as “self-employed”.

What these data suggest is that after April 2004 the availability of immigrant workers generated some 50,000 jobs that would not otherwise have come into existence. This is a significant once-off boost to our economy, which in many cases must also have benefited consumers considerably by making it possible for them to have work done, eg on house repairs, that would otherwise have been impossible either because of cost, or because of a labour shortage, or both.

Moreover, insofar as many of these workers are in the construction sector, they offer a kind of cushion to Irish building workers, for, if and when the current construction boom ends, much of the brunt of disemployment will be borne by immigrant building workers.

Although there may be a positive as well as negative side to the picture drawn by Manus O’Riordan, his data suggest the urgent need for increased supervision of the construction sector in particular. The persistent failure of the Government to appoint a sufficient number of labour inspectors has been a grave dereliction of duty that the unions have been right to attack.

Its slowness in acting in this matter recalls its failure some years ago to respond in time to a rapid rise in asylum-seekers, which allowed a huge backlog to develop that took years to clear. In any event, we need to face the fact that our capacity to absorb immigrant labour is not infinite. And we need to be vigilant about future trends.

If Bulgaria and Romania – countries with a combined population of 30 million people and living standards almost one-third lower than the poorest northeastern European countries to which we opened our borders 20 months ago – are admitted to the EU next year, the Government should be cautious about extending similar treatment to their populations.

Meanwhile, we need to improve radically our statistical data on immigrants.

The last census in 2002 provided for the first time data, including age, on people who are not Irish nationals. But there is as yet no reliable data whatsoever on the level of employment of non-nationals: the detailed employment data published from the quarterly household inquiry does not distinguish Irish nationals from other nationalities. Filling this lacuna in our employment statistics should now be a high priority.”

This one looks set to run and run, especially if Rabbitte makes it an election issue.