The global labour market is already here

British firms have been moaning about skill shortages for almost as long as the rest of us have been moaning about the weather. But final dramatic proof that Britain has to go abroad to find the expertise it needs to compete in the global marketplace came with the appoint of a wealthy Swede, Sven Goran Eriksson, as the new England football coach.

That meant that in the last couple of years Britain had asked a Swede to coach its national team in a game which (as the tabloids were not slow to remind us) we invented, asked a Kiwi (Duncan Fletcher) to coach the England cricket team and asked a Frenchman, formerly responsible for ticketing and car parks at EuroDisney, to save the Millennium Dome.

The British government is finally talking about tinkering with the immigration laws, which have been set in political stone since the 1970s. Initially, the idea is to attract 100,000 foreigners with the right IT skills, although a new points-based immigration system may result.

Less glamorously, Britain has also, according to a Panorama programme, turned to thousands of illegal immigrants to pick the food which companies supply to the supermarkets.

The globalisation of the labour market is the result of two basic economic factors: supply and demand. Western economies can no longer supply the labour required to do millions of jobs, many menial and some not. And according to birth projections, that problem is going to get worse, especially in countries like Italy (the Italians may, though, have already begun to solve the problem: estimates suggest there are 1.5-2m African immigrants in Italy).

At the same time, millions of people are demanding a better life and, despairing of getting that in their own countries, are prepared to move. As you read this, 75,000 refugees are waiting to come into Britain and these are not latter-day Karl Marxes fleeing political persecution but economic migrants, people in search of a better job.

Extreme need can produce extreme reactions. After the Somali civil war in the early 1990s, Helsinki police reported a sudden influx of Somali immigrants, working illegally and for abysmal pay as bar staff and taxi drivers in the Finnish capital. They were initially confused about why their country had been chosen but then they realised that Somalis, still citizens then of a nominally socialist country, had used their passports to flee to the old Soviet Union and from there they had crossed the border.

In the UK, especially in London, you can detect a similar pattern in the bar staff. Fifteen years ago the most common foreign accent behind a bar was Australian, then South African, but this summer, increasingly, they were East European. With Britons paying around £9 billion last year to people to do their household chores, the UK could become the new Los Angeles where an estimated 500,000 illegal immigrants (normally Latin or Asian) iron, clean and tend their masters’ houses. Even within countries, you can see the same pattern: 130,000 Britons move south every year, the equivalent of a decent sized town.

The shift of labour is not going to go away, it’s going to get bigger, and this may be painful for many societies to accept. The arrival of Ugandan Asians in 1970s Britain, coupled with a decade long recession, helped create support for such extreme right-wing parties as the National Front. America’s north American free trade area was only passed over the fervent opposition of many unions and some small businesses.

At the same time, technology is going to reduce the gap between labour forces, to create, if you will, one truly global labour force. Mike Dunlop, HR director of Sun Microsystems UK, says his company already uses different employees in different time zones to offer 24 hours a day, seven days a week service. Many Silicon Valley companies have ported much of their service offshore, to India, believing that if they can’t import enough of the right kind of engineer then they will move the work to where there’s a pool of such labour.

The one thing which may slow the influx of human labour is, of course, the one thing that even Western economists don’t want: a severe global recession.

By Paul Simpson

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