Immigrants and the economic blame game

Getting a taxi, buying a coffee or dining out in Dublin are services that are now - in the main - supplied by immigrant labour

London-listed Irish food group Greencore landed itself in hot water some years back after admitting it went to Hungary to recruit low-cost staff for its flagship sandwich factory in Northampton.

Company bosses flew to Budapest to recruit up to 300 workers to fill posts at the plant, which employs about 2,000 workers. Northampton locals were said to have been insulted by the move, claiming they had been overlooked by the firm.

The company, formerly Irish Sugar but now the UK’s largest sandwich maker, initially said it had been forced to import foreign workers because of the strength of the UK economy, but later claimed it had tried unsuccessfully to recruit locally even though there were – at the time – more than 8,000 unemployed workers in the town.

A throwaway remark by a Greencore spokesperson, suggesting the company had been forced to recruit abroad because no one in Britain was willing to do the work, turbocharged the controversy into a national debate about immigration and low pay. Some of the new recruits were expected to be hired on the minimum wage, which back then was £6.50 an hour.


Was it the case of a company looking to drive down costs, or was it the case of indigenous workers not wanting to take up low-paying jobs? It may have been a bit of both.

Either way, the ensuing media storm – led by the Daily Mail’s provocative headline, “Is there no one left in Britain who can make a sandwich?” – put Greencore’s employment practices and wage structures in the spotlight.

The issue made it all the way up to the House of Commons when Northampton North MP Michael Ellis, who is still in situ, raised it at prime minister’s questions. The then British prime minister David Cameron said the debacle illustrated the need for a “strong immigration policy”.

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In hindsight, the controversy caught the political temperature in Britain.

Within two years, the country had voted itself out of the EU on the back an anti-immigrant campaign led by the UK Independence Party (Ukip) and promises by Tory-led Brexiteers of an enhanced economy with better trade deals.

The UK, like many other western countries, remains in the grip of a fierce backlash against immigration. Brexit has failed to quell tensions, and current prime minister Rishi Sunak’s government remains entangled in a faltering plan to deport asylum seekers to Rwanda.

Depending on which side of the fence they are on, politicians tend to tailor their immigration narratives.

Former US president and Republican front-runner Donald Trump tells voters that decades of record immigration “have produced lower wages and higher unemployment for our citizens, especially for African-American and Latino workers”.

Joe Biden’s Democrats talk of the need for immigration control, but also of how hardworking migrants contribute to the economy, boosting productivity and wealth.

The notion that native workers won’t do some jobs because of the meagre pay, low status and ‘belittled pride’ involved is underpinned by anecdotal rather than empirical evidence

Taoiseach Leo Varadkar frequently highlights the benefits of immigration. He recently noted that half a million people who were not born in the State were now paying income tax here. Like the Greencore debacle, the true impact of immigration is more nuanced than either of these narratives.

Immigration does boost productivity and wealth, but not everyone benefits, and improving the labour supply can in some sectors push wages down. US economist George Borjas has penned several studies indicating that immigration lowers the wages of competing workers. His calculations suggest a 10 per cent increase in supply reduces wages by 3 to 4 per cent.

By the same token, it is inconceivable to imagine the Irish economy’s rapid expansion and return from the financial brink since 2012 (the official low point of the crash) without immigrant workers.

Getting a taxi, buying a coffee or dining out in Dublin are services that are now – in the main – supplied by immigrant labour. It’s also inconceivable to think of Google or Facebook setting up shop here without recourse to a large cohort of foreign workers.

Nonetheless, there’s an immigration trope that runs along the lines of “they’re stealing our jobs”, which is perhaps based on a mistaken belief that there is a fixed amount of work available in a given economy.

Economic expansion is predicated on a range of factors. In certain circumstances, increasing the supply of labour can increase the size of the economy, leading to further job creation.

In Ireland’s case, the proof is, sort of, in the pudding: we have more people working now – 2.71 million – than at any other time in the history of the State, despite of or in parallel with a big and ongoing influx of foreign workers. The economy is bigger, wealthier and more productive than it was before and operating at close to full employment, with a large population of migrant workers.

The notion that native workers won’t do some jobs because of the meagre pay, low status and “belittled pride” involved is underpinned by anecdotal rather than empirical evidence.

The strain on public services from Ireland’s rapid economic expansion is a key flashpoint. Increased immigration in parallel with increasingly scarce or poor State services – the additional burden on social welfare, health, housing and school systems – is bound to create tensions. Managing these tensions is going to require better planning and strong political leadership.