On Stephen Kinnock and regulation of labour markets

A 40-tonne articulated lorry pulled by a red Mercedes-Benz Actros tractor unit with a Serbian number plate and identity oval, a red curtain side and a white door with the name of the former owner 'Magazin Transport' still apparent. Four men are running after it so as to board from the back, where one of the doors appears to be partly opened.Earlier today I saw a Twitter thread posted by the Labour MP Stephen Kinnock (son of Neil) who is a member of the Brexit select committee in Parliament (starting here, ending here, claiming among other things:

As a progressive democratic socialist I know that markets fail when they are not regulated properly. From banking to construction to energy have seen what happens when markets are left to own devices. Why shld labour market be any diff? It’s not possible to regulate labour market unless it is possible to regulate supply, and FoM makes supply-side regulation impossible

He does not seem to understand that there are other ways of regulating the Labour market without simply “cutting off the supply” by ending freedom of movement within the EU. One of them is to incentivise businesses, especially large ones, to invest in new talent rather than relying on immigrant populations which can supply experience on tap — and to penalise companies which refuse to do this.

I’m a truck driver, and I passed my class 2 test (for single trucks) in November 2013 and my class 1 test (for articulated trucks) in September 2014. I’ve been quite lucky in that agencies I’ve been working for have been able to get me a fair bit of experience in both types of work, and a large variety, but it’s been nothing like full-time. A fair number of companies will not take on a driver who has not been ‘entitled’ for two years or more, especially at class 1; some (like a major contractor in the Colnbrook area, near Heathrow airport) will even refuse to take someone on who has not had two actual years of experience. This is because insurance companies offer reduced premiums to companies that agree only to take on experienced drivers because they are, as you might expect, less likely to cause accidents. But where do you get that experience if you have not been given the chance? It’s just not their problem, and it seems to be no barrier to filling driving positions because there is a ready supply of experienced drivers from the Continent. Even if British hauliers do not deliver loads, they may still get delivered by eastern European drivers under EU ‘cabotage’ rules.

I contribute to a trucking forum regularly and it does appear that there is a strong pro-Brexit tendency among them. They blame east European immigration for keeping down wages and keeping them out of work, especially foreign work. This is not wholly justified; fuel prices rose dramatically in the years after the accession, and at times in the early 2010s a litre of unleaded petrol didn’t sell for less than £1.40 in some places. Companies had to compete on price and to avoid passing costs onto customers, they passed them onto staff. Many hauliers do not want to deal with the migrants at Calais, and the huge fines the government levies for stowaways found on trucks; they would gladly leave that to the foreign hauliers. But academics lecture them with “lump of labour fallacy!” whenever these complaints are made, claiming that immigration means more work done, which means more money made and thus more work to be done; but that is no guarantee that it will go to native workers, particularly if bosses become used to foreign workers or networks build up which allow new recruits to be taken on without advertising them in mainstream jobs pages or sites, or at all.

The solution is for the state to offer positive encouragement to firms to invest in and train workers who grew up here (in case it doesn’t go without saying: I mean regardless of their colour, or their parents’ origin) rather than moved here as adults, and to penalise those who refuse to do so and leave it to everyone else to train up new workers, and leave a lot of new workers out of work they are qualified to do. In the case of driving, there are certain jobs that someone who’s just passed their test could not do safely or reliably; nobody is suggesting that brand new drivers be taken on for heavy digger haulage, for example, but for many of them, they could, especially if they were given a bit of guidance in the first few weeks. Some companies do not care about this; they only want to get their work done, and while some are perhaps too small and not financially secure enough to take risks, others are quite big enough and plenty of companies in this category take the “not my problem” line.

So, an unregulated labour market with a government in thrall to an ideology that says you cannot interfere with the market in combination with unrestricted immigration from a group of countries with plenty of educated or trained workers and lower costs of living and average earnings than ours will result in wages being depressed and people finding themselves unable to get the work they have trained themselves for. But there are other ways besides pulling ourselves out of the EU, which deprives our workers of free movement as well as others of the right to come here; we have to make the EU work for people, not just for business, which has been the whole problem with the way Britain engages with Europe.

He concludes:

For too long c-left (sic) has brushed this debate under carpet & accused anyone making the case for reform of being anti-immigrant, or worse. This opened door to UKIP, the FN, the AfD, and Wilders etc. We need less anger & emotion

As I’m sure he knows, there are other reasons why these far-right parties have prospered in the last twenty years or so. Much of it has been because of ‘fears’, many of them stoked by biased or malicious reporting in the popular press, about Islam or Muslims. Much of their rhetoric has been targeted as much at Muslims as at the EU or eastern European migrant workers. In fact, some of these parties have polled better in their own countries than the BNP or UKIP ever have, when they did not immediately allow eastern Europeans to settle and work there. It may come as a disappointment to a ‘socialist’ who is content to hustle for white working-class votes in old coal-mining areas by pandering to tabloid readers’ prejudices (rather than commit to investing in industry and jobs for said areas), but we do not get social justice or racial harmony by just giving in to the demands of racists and the racist media. We have to fight and expose it.

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  • M Risbrook

    It’s a known fact that bus companies in Britain advertise for drivers in eastern Europe whilst denying that any vacancies exist to anybody who enquires in Britain. Sometimes it is only possible to get a job with the bus companies by applying through agencies and not directly to the company.

    Eastern Europeans are popular because they are often prepared to tolerate worst conditions than most British workers are and not complain or ask for anything better.

  • George Carty

    Sounds like what is needed is to improve the standard of living in Eastern Europe, to reduce the desperation that causes Eastern Europeans to be willing to work in the UK for low wages and in horrible conditions.

  • M Risbrook

    Yes, but the governments of countries in eastern Europe should sort out their own countries rather than expect governments of countries in western Europe to sort it out for them. Ted Heath said nothing about Britain having to clean up the mess caused by communism in Romania and Latvia in 40 years time when Britain joined the EU in 1973. I do not want British taxpayer’s money used to repair leaking sewers in Budapest whilst there are plenty of leaking sewers in Manchester crying out for repairs.

  • George Carty

    Maybe the EU should have been more protectionist, so that we had less “Made in China” stuff in our shops and more “Made in Poland” or “Made in Hungary” stuff perhaps?

    That would have done the trick without any need to spend large sums of taxpayers’ money…

  • M Risbrook

    The problem is that eastern Europe has had a very different history and economy from western Europe between 1945 and 1990. Eastern European countries were industrialised under the initiative of the Soviet Union after 1945 but by 1990 much of eastern European manufacturing was either based around obsolescent outdated processes that were uncompetitive with those in the rest of the world, or was producing rubbish that nobody wanted to buy. The consequence was mass de-industrialisation after 1990. The EU was devised by western European nations for western European nations and had no real mechanism to admit former communist states as nations without causing major disruption in existing countries in western Europe.

  • George Carty

    Why would it be harder for Eastern Europe to modernise its industry than for China to industrialise from scratch?

  • M Risbrook

    Sometimes it’s easier to start from scratch on a clean slate than to modernise legacy infrastructure.

    Certain industries in eastern Europe (and Russia) are economically uncompetitive with industries in China in the same way as industries in the West Midlands are. Other industries were set up to produce products that nobody wants but not the products that customers want to buy nowadays. Like steel bread bins vs games consoles.

    The population of eastern Europe lacked the skills and the knowledge in the 1990s to transition towards a modern industrial economy because of the outdated education system employed in eastern Europe whereas China has been training its citizens up with the right knowledge for several decades. Innovation, creativity, and business nous were woefully lacking in eastern European education.

    I can remember discussing computers with a Russian in the 1980s. When I asked him about when the Soviet Union will be as good as the west when it comes to computers his reply was never. I then asked him to explain why and he replied that the economic system and education in the Soviet Union is good at copying established heavy industry from the ‘capitalist’ world of the early 20th century but is incapable at fostering innovation in fast moving industries like computers and consumer products. He also commented on how China (which is not communist in the same sense as the Soviet Union or eastern Europe) will eclipse the Soviet Union when it comes to computers and advanced industries.

  • adelaidedupont

    What about Tetris?

  • As I recall the person who invented that never made much money from it because he was a state employee and the state computer agency owned the rights. Much as Mikhail Kalashnikov never got rich from his rifles and later marketed his own vodka (not sure how successful that was).

  • adelaidedupont

    Ah, yes, the Academy of Informatics at Moscow State University.

    There is a good analysis of Tetris and the marketing and advertising in GAME OVER which is a book about Nintendo.

    And the Kalashnikov comparison/analogy is a fit one.

    No, the vodka marketing was not overly successful. Even though vodka is probably one of the few areas in the FSU where there was competition!

  • M Risbrook

    Tetris was the result of laws at the time in the Soviet Union restricting what type of computer games could be produced. Many games you could buy in Britain were illegal in the Soviet Union.

    Mikhail Kalashnikov could have been richer than Bill Gates if he collected royalties from copies of his rifles and their component parts. I used to make them up in the mountains of Pakistan back in the 1990s.