Asylum claims are not the cause of the UK’s record immigration

Attitudes to refugees have hardened since last September, said a BBC report yesterday. It found an increase in the number of people who think the UK has taken in too many refugees and should now be taking fewer. This is another manifestation of the growing concern about immigration noted by Gallup and Mori polls last month.

But the UK has only taken 1,000 Syrian refugees and only grants a few thousand asylum claims each year. Even if Britain took no refugees at all it would make very little difference to the immigration figures.

While it is true that immigration to the UK is at a record high, this has almost nothing to do with refugees and asylum seekers. As this chart from Migration Observatory shows, there was a time, back in the early 1990s when asylum seekers accounted for most of Britain’s immigration but that was a long time ago when immigration was fairly low. There was a spike in asylum claims in the early 2000s but even then it was not the main component of migration. As a proportion of overall immigration, asylum has been very low for the last decade.

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Chart via Migration Observatory

Most people come to the UK through established channels, to work, to study or to join family already here.

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Source: ONS Migration Statistics Quarterly Report, November 2015

When compared to other countries in Europe, the level of asylum applications in the UK is not particularly high. It has remained fairly steady over the past few years even as it has increased for some of our neighbours.

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When you adjust these figures for population, the UK is nowhere. Compared to most of the richer EU countries, the UK has very few asylum applications.

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Source: Asylum in the EU, European Commission, June 2015 (Figures for 2014)

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Chart via BBC

The UK may have the second highest level of immigration in the EU (although when you adjust for population size, it is somewhere in the middle of the pack) but unlike some other European countries, asylum barely features in the numbers.

Britain has a labour market and job opportunities that draw workers from across the EU. It contains by far EU’s biggest city and world famous universities which attract ambitious young people from all over the world. Thanks to the legacy of its empire it has communities from many different countries who maintain contacts with their friends and relatives. Consequently there is a flow of people coming here to do business and to join family members who have already settled. London is the favoured location for corporations’ European HQs. It’s hardly surprising, therefore, that US citizens accounted for the largest proportion of UK temporary residence visas in 2014.

There are, then, all sorts of reasons for Britain’s record levels of immigration. Mostly people come to work, to study or to join other family members. You may think it’s a good thing, you may not. Let’s be clear about one thing though; it has nothing to do with people crossing the Mediterranean in leaky boats.

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Lessons in rock ‘n’ roll history

When I was growing up I thought rock ‘n’ roll started in 1955. That is probably because everybody on the radio and TV at the time told me it did. By the 1970s, the radio stations were being run by people who had been teenagers in the 1950s. Every generation likes to think it broke new ground. Being one of that first wave of rockers and the first British teenagers to be called teenagers must have felt exhilarating. No wonder there was a year zero feel about it. 1955 was the year when rock ‘n’ roll, teenagers, youth culture, street fashion and everything went with it began. Programmes like 25 Years of Rock and an entire cohort of early boomers told us so.

But, as the saying goes, nothing comes from nowhere. The idea that a new form of music would suddenly burst out of the Deep South was never plausible. It had roots in what had gone before and had been gathering steam for some years before it attracted the attention of radio stations.

True to its mission to fill in rock ‘n’ roll’s missing evolutionary links, Trash Can Radio has been running a fascinating series called The Juke in the Back, every Thursday evening. As its presenter, Matt the Cat, explains:

At the end of the Second World War, economics forced the big bands to trim their once great size and thus, the Jump Blues combo was born. Between 1946-1954, rhythm and blues laid the tracks for what was to become Rock n’ Roll. So how come, nearly 60 years later, this vibrant and influential music is still so unknown to so many?

Matt The Cat is going to change that with the radio program, “Juke In The Back.” These were the records that you couldn’t hear on the jukebox in the front of the establishment. To hear all this great 1950s rhythm & blues, you had to go to “Juke In The Back.”

On the Juke in the Back you will hear stuff you have never heard before. Some of the very early tracks are on 78s, as the 45 single didn’t appear until 1949. This is where rock ‘n’ roll really began.

One of the most astonishing artists from that period is Rosetta Tharpe. (See Episode 292) I say astonishing because in the 1940s she was doing a lot of things most of us assume happened a lot later. A woman fronting a band, playing rock n roll on an electric guitar, before Suzi Quatro was born. Rosetta Tharpe’s popularity faded during the 1950s but a revival of interest in the early 1960s led to her visiting Europe, where she told the Daily Mirror:

All this new stuff they call rock ’n’ roll, why, I’ve been playing that for years now.

Most of the footage of her dates from this revival period but take a look at these:

 

She might not be your typical rock n roll star but it’s rock n roll alright.

How many more forgotten groundbreaking artists are there? There are even entire genres that barely rate a mention, known only to aficionados. 1960s Garage Rock, for example, is another of those missing evolutionary links. Once you hear some of it, you start to understand how rock n roll went from Be Bop A Lula to Paranoid in little more than a decade.

This is where Trash Can Radio comes in. These guys are not just running a radio station, they are providing an educational service. They mine the obscure seams of rock ‘n’ roll’s history to bring you stuff you have never heard before but which was crucial to the development of the stuff you’ve been listening to for years. I know I have banged on about Trash Can Radio before but really, if you find this sort of stuff interesting, or if you just want to hear a different take on rock ‘n’ roll, then give them a listen. If you are in London they are on DAB. Outside London you’ll have to rely on the interweb.

Unless, of course, Trash Can Radio can raise enough funds to get a national licence. At the moment, the guys behind it are running it on a shoestring against competition from much larger and better funded organisations. If you, or anyone you know, would like to advertise with them it would help to give them a boost. If not, just join their army of listeners and buy a t-shirt or two. It’s all in a very good cause.

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Sofa, so good…

In case you missed it, OBR chairman Robert Chote was in fine form last week when giving evidence to the Scottish Parliament’s Finance Committee. Remember that money the OBR found behind the sofa at the end of last year?

Following the Autumn Statement, lots of people latched onto the £27 billion that we had apparently found down the back of the sofa over the next five years.

Unfortunately, says Mr Chote, changes to the forecast for GDP and tax revenues could quite easily wipe it all out.

[T]he underlying changes we have made to our budget deficit forecasts between previous March Budgets and Autumn Statements were deteriorations of around 11⁄2 per cent of GDP in 2011 and 11⁄4 per cent in 2012, an improvement of 3⁄4 per cent in 2013 and a deterioration of 1⁄4 per cent in 2014. The lesson is that what the sofa gives, the sofa can easily take away.

That could be a bit of a problem because:

The tax increases and welfare cuts build up gradually – and less quickly than the Chancellor said he would aim for ahead of the election. So he has also decided to borrow more over the next three years to help reduce the severest squeeze on public services spending during the middle years of this Parliament. Then he aims for a slightly bigger budget surplus in the medium term as the mounting tax increases and welfare cuts eventually outweigh what are by then smaller increases in public services spending.

Helped by the modest improvement in our underlying forecast, this leaves the Chancellor on course to achieve his new target of delivering a budget surplus in 2019-20 (and beyond) with a margin of around £10 billion in that year. Past forecast errors suggest that this implies a roughly 55 per cent chance of delivering a surplus in that year on current policy, so by no means a done deal.

The trouble is, during the last parliament, most of the fiscal consolidation was done by cutting public service spending. Over this parliament, though, welfare cuts and (presumed) increased tax revenues do a lot more of the work.

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Chart Via FT

If welfare costs don’t come down and tax revenue doesn’t increase by as much as the chancellor planned then he must either raise taxes, cut public services even further or abandon his deficit target.

Robert Chote’s closing paragraph is worthy of Francis Urquhart:

But uncertainties abound in the underlying forecast, not least the outlook for productivity and real wage growth and its implications for tax revenues. And our forecasts are also based on current policies, while other forecasters might expect those policies to change. Some will look at the public services cuts that remain and ask if they can be delivered. And some will look at the projected savings from welfare, but worry about the Government’s ability to deliver reforms logistically and cuts politically. And if they expect disappointment on either of those fronts, or from the underlying forecast, some may expect the Government to opt for more tax increases or to think again about its goal of sustained budget surpluses. Fortunately, these musings lie beyond our remit.

Some might think that. We couldn’t possibly comment.

There are already signs that the tax revenue forecasts might have been a bit optimistic and I’m still sceptical about the £12 billion welfare cut. It will be interesting to see if that money is still behind the sofa in two month’s time.

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“Chote called. Says he might have to repossess the sofa.”

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Self-employment and public employment edge closer

In the melee of the run up to Christmas, a couple of items in the ONS employment stats release passed without much comment. Firstly there was a rise in the number of self-employed people. As expected, self-employment fell once the recovery in employee jobs got underway. At least, it did for a while but it has been creeping up again recently. It’s now just short of its mid-2014 peak.

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Chart by the Resolution Foundation

It is too early to say whether this has anything to do with the impending rise in the National Living Wage but there is certainly a lot of nervousness about the NLW among employers. The Engineering Employers Federation said this week that a fifth of the firms it surveyed were expecting job losses as a result. A recent report by the Resolution Foundation found that the NLW could affect a quarter of workers in some cities by the end of the decade.

As if that isn’t enough, as Jolyon Maugham pointed out earlier this week, for every £100 a company pays and employee it costs £26 less in national insurance to pay the same amount to a freelancer. These days, the freelancer probably doesn’t earn as much in the first place. Not being covered by the NLW, the gap between self-employed and employee pay is likely to get wider. It would be surprising, therefore, if some employers were not thinking of ways they could replace their NLW employees with cheaper freelancers.

Then there’s the zeitgeist thing, of course. Self-employment is fashionable at the moment. Lots of people think it sounds great and they would be really good at it. That, too, may be helping to keep the numbers up.

Whatever the reasons behind the recent rise, it is reasonable to assume that self-employment will stay high for the next few years, even as the number of employee jobs increases.

Released on the same day were figures showing public sector employment at its lowest since the ONS started counting at the end of the 1990s.


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Ben Dellot reckons the self-employed will outnumber those working in the public sector sometime towards the end of the decade. I had a bet with him because I still don’t think they will. Now that the chancellor has downgraded his public service cuts from utterly insane to might just be doable, the job losses in the public sector will probably be less severe than we once thought.

Either way it will be a near thing though. If the lines on this graph don’t meet or cross over, they will come very close. Over the next five years, public sector employment will continue to fall and self-employment, while it might not rise by much, it probably won’t fall by much either. A high level of self-employment, by historical standards, seems to have become a feature of the 2010s labour market.

Self Emp and Pub Sec wkrs Source: ONS

This is a significant shift in the make up of the UK’s workforce over a relatively short time. Fewer people with reasonable job security, final salary pensions, employer funded training and, for the most part, stable earnings. More people with irregular work, inadequate pensions, low levels of training and falling incomes. Aside from the economic implications, there may also be a political shift. If the self-employed are as big a constituency as public sector workers, how might that change our politics? Will we see a more individualistic and less collectively minded culture or might the self-employed start to act collectively to prevent their pay rates being hammered down? Might they start calling for government action to make their lives more liveable?

It is unlikely that either of these trends will reverse in the next few years. By the end of the decade the self-employed will make up a roughly similar proportion of the workforce to those employed in the public sector. If it’s a little bit more I will be buying the beer, if it’s a little bit less, Ben will. Whichever of us is up at the bar, though, the balance of the UK’s workforce will have changed, probably for the long-term.

Update: Michael O’Connor wonders whether changes to in-work benefits might reduce the number of people in self-employment. Less generous terms may discourage some from starting up, while others may find that they simply can’t afford to be in business any longer.

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Lemmy: dark star, Capricorn

There are about half a dozen bands I have seen more times than I can remember. One of those is Motorhead. I remember them appearing in the late 1970s at a time when a lot of heavy rock had disappeared up its own backside with long tracks and concept albums. Motorhead stripped it all back to a guitar, drums and a distinctive driving bass, a raw sound with an energy and urgency that outpunked the punk bands. In doing so they set the scene for the 1980s when bands got louder and faster until it was impossible to tell what was punk and what was heavy metal any more.

The first time I saw them I was fifteen. It was a school night so getting to the gig involved complex preparations. No-one wants to go and see Motorhead in school uniform so we had to take stuff to change into and stash our school clothes overnight. There was then a tedious bus journey and what seemed like hours hanging around in the cold before getting into the venue. Although we were among the younger members of the audience we managed to get and hold a position at the front. It was incredible. The noise was like nothing I had heard before. The band, all in black as usual, looked like the baddies from a cowboy film. I wouldn’t have used the term stage presence back then but they had it in spades. Though my ears were ringing for days afterwards I knew I had to see them again and nine months or so later, this time during a school summer holiday, I did my second Motorhead gig. There were many more, the last probably being in the late 80s or early 90s. For me it was never quite the same after Eddie Clarke left but they were still unique among rock bands even then.

It was with sadness, then, that I heard that Lemmy, the man who created Motorhead, died on Monday, four days after his seventieth birthday and two days after having been told he had an aggressive form of cancer. The first time I saw the band, Lemmy would have been in his early thirties, less than half the age he was when he died. Yet, in may ways, he looked very similar. His face was already old by his thirties. As he wrote in Capricorn, “When I was young I was already old.”

Talking of Lemmy’s face brings to mind one of the occasions when I met the man in the flesh. He used to be a regular at a downstairs after-hours bar in Soho. I was in there one night when Lemmy was playing on the fruit machines, as, apparently, he did quite often. An argument started among some of the people I was with about whether or not that bloke playing the bandits really was Lemmy. Eventually one of my friends decided to settle the dispute by going up and asking him. “Excuse me,” he said to the bewhiskered rocker, “Would you mind telling these idiots who you are?” To which, the great man replied, “With a face like this I couldn’t be anyone else.”

That was part of Lemmy’s appeal. He barely changed his appearance from the 1970s onwards. If you were to ask a group of people to describe the archetypal rocker the result would look very much like Lemmy. The long hair, the leathers, the black clothes and the massive collection of custom-made boots all harked back to the classic period of youth rebellion from the 1950s to the 1980s. He has been described as one of the last true rock stars and with good reason because rock stars don’t look like that any more. Come to think of it, neither does anyone else. Even the Hells Angels have shorter hair and trimmer beards these days and they stopped wearing Nazi regalia in the 1980s.* Lemmy didn’t though. He carried on wearing it to the bitter end, even after being threatened with arrest in Germany a few years ago. His defence was simply that, throughout history, the bad guys always had the best clobber.

The same could be said for Motorhead’s music. Like Lemmy’s face, there really was no mistaking it for anything else. Their tracks had a distinctive sound and you could identify a new song as theirs even if you were hearing it for the first time.

Lemmy grew up during a time when rock n roll and the youth culture that went with it set out to shock. It doesn’t do that any more. It hasn’t really done so for the last two decades. Rock stars don’t do outrageous these days and even when they do it’s usually a pale imitation of what has gone before. The iconic leather biker jacket has been recycled as a mass fashion item in the last couple of years, now with women’s side fastening which they never had back in the day, and you can buy t-shirts with a Motorhead logo from Topshop. New and distinctive sounds are rare too. There is no 2010s equivalent of the ‘what the hell was that’ moment you had when first hearing Lemmy’s bass, Johnny Rotten’s voice or the Prodigy’s strange noises. In that sense, Lemmy really was one of the last rockers. A larger-than-life representation of when rock n roll meant lots of noise, drinking to excess, an outrageous appearance and, if not always violence, at least a constant air of menace and the sense that things might kick off at any moment.

Of all the great songs Lemmy wrote, Capricorn was my favourite. It was the one I used to shout for at gigs. There is something appropriate about Lemmy having been born at the darkest time of the year. The last verse goes:

I always knew, the only way,
Is never live, beyond today,
They proved me right,
They proved me wrong,
But they could never last this long,
My life, my heart, black night, dark star, Capricorn.

In the end, though, nobody is fast enough to out-run the Grim Reaper. Lemmy’s lifestyle caught up with him and the Cancer got the Capricorn.

He was indeed a true rock star and one of the last of a breed. I would say Rest In Peace Lemmy but somehow that doesn’t sound right. If there really is an afterlife, I hope his will be as raucous as the one he lived.

 

 

* It may sound odd these days but wearing swastikas, death’s heads and iron crosses was once a symbol of youth rebellion. They were part of rock n roll iconography from the 1950s to the 1980s. One theory is that many early bikers were former soldiers who had brought Nazi regalia home as war trophies and who then started wearing it while riding their bikes. From a 2010s perspective, it looks odd that such symbols seem to cause more offence now than they did so soon after the second world war, when there were a lot more people around who had experienced what the Nazis did. When asked about it at the time, most rockers insisted that there was no political meaning behind the Nazi badges and that they just wore them to annoy people. There is probably a sociology PhD in there somewhere. The Hells Angels stopped wearing Nazi symbols when the club’s first charters were awarded to motorcycle clubs in Germany. Out of respect for their new German members the entire membership worldwide renounced the use of Nazi regalia in the 1980s.

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Training: going out of fashion for a decade

The Resolution Foundation’s report on wage growth and productivity yesterday notes the ongoing decline of training. Time spent on all training has been falling for the last decade or so but the deterioration has been sharper for off-the-job courses.

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Source: Resolution Foundation Earnings Outlook

The decline in off-the-job training has been most marked for the younger age groups. As the Resolution Foundation comments:

The ongoing deterioration in training rates has been mainly felt by employees aged under 50. While training intensity has always declined with age this gap has narrowed: training rates are over 30% below their 21st century peak for 18-29 year olds and 30-49 year olds, but only 16% down for those aged 50 and over.

The maintenance of training for older workers is a positive trend: boosting productive work among the over-50s will be key to ensuring our economy keeps pace with demographics. But falling training investment for the under-30s – when workplace skills are least developed and productivity gains are usually most rapid – raises concerns about long-term skills and earnings potential, with both individual and macroeconomic implications.

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Source: Resolution Foundation Earnings Outlook, Quarterly Briefing: Q3 2015

The figures would almost certainly look even worse if they included the self-employed. There isn’t much data on training and the self-employed but this UKCES report from four years ago found that they spent considerably less time on it than employees.

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Source: Skills for self employment, UKCES, August 2011

It is likely that this pattern has persisted over the past five years. The increase in the proportion of the workforce in self employment almost certainly means that training per worker is even lower than the ONS figures suggest. If it were possible to calculate an all worker training measure it would, like the all worker earnings measure, look worse once the self-employed were included.

Last month, Nigel Meager, Director of the Institute for Employment Studies and one of the UKCES report’s authors, remarked:

[I]n an economy in which rapid change puts a premium on skills acquisition and lifelong learning, the question of how the self-employed (who, the evidence suggests, have much lower levels of training in work than employees) update their skills and human capital is a challenge which few policy-makers have even begun to address.

Vicky Pryce made a similar comment last year when she told a conference of the self-employed:

You [self-employed Britons] tend to work below your skill level, you tend to find it quite hard to make ends meet and very often you just don’t employ anyone additional.

You are not usually compensated for what you lost before, with the result that there is very little productivity growth. Very often it means that firms will not grow, and very often society has lost quite a lot of potential.

Skills gained at employers’ expense are often not updated when people leave the corporate world. As the skills of the self-employed gradually ossify, the country’s stock of human capital diminishes.

None of this bodes well for productivity. The productivity increase we will need to sustain the current rate of wage growth is unlikely to come from a workforce where, each year, less and less time and money is invested in skills development. This might seem odd, in a country where employers are constantly complaining of skills shortages but as UKCES said earlier this year, some of our firms are free-riders, preferring to buy rather than build. An increased supply of freelancers, migrants and older workers, already trained by someone else, make freeriding that much easier. This will only ever be a short-term fix though. Eventually the skill base will start to shrink, especially if fewer younger people are receiving training. Politicians and business leaders keep talking about a productivity boost sometime soon but if investment in skills development continues to fall, they could be in for a long wait.

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Human capital shallowing

Economists use the term capital deepening to describe an increase in the amount of capital per worker in the economy. Joao Paulo Pessoa and John Van Reenen argued that the UK’s fall in productivity was due to its opposite, capital shallowing. In other words, falling wages allow firms to substitute people for capital and the capital per worker falls.

But do these concepts apply to human capital? I recently came across the ONS Human Capital Estimates, released a few months ago. The ONS has a methodology for calculating the stock of human capital in the UK. This involves making an assessment people’s of earnings, skills and qualifications then using it to calculate lifetime labour income. This, taken together, gives a value for the UK’s stock of human capital. (I have tried to summarise an entire paper with a few sentences. The full explanation is here.)

According to the ONS calculations, human capital per worker increased during the early 2000s, until just before the recession when it began to fall. It is now lower than it was in 2004.

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This might strike you as a bit odd.

Take the ONS’s definition of human capital:

Human capital is a measure of individuals’ skills, knowledge, abilities, social attributes, personality and health attributes1. These factors enable individuals to work, and therefore produce something of economic value.

In terms of education level and people in high skill roles, the UK has one of the highest proportions in Europe and it has increased over the last decade or so.

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Source: Growth Through People, UKCES, February 2015

According to the ONS classification, the percentage of the workforce in high skill jobs has increased steadily since 2001 while the proportion in medium and low skill jobs has declined. this shift has been particularly pronounced in the professional occupations, producing the cocktail glass effect.

Emp & Self Emp Region Apr-Jun 2008

Source: ONS Labour Market Statistics, EMP09

When it comes to the stock of skills and qualifications, then, it’s hard to argue that the UK has less now than it did a decade ago. The problem comes when you try to put a value on it. The only way you can do that is by looking at earnings. If earnings fall, then the value of human capital must fall. Over the past few years, even the rise in the workforce’s skills and qualifications hasn’t been enough to offset it.

The UK might have a more highly qualified workforce with more people in skilled jobs but employers are not valuing that as highly as they once did. Even jobs that once paid well have seen their earnings fall. Wages in all occupational categories are, in real terms, lower than they were in the early 2000s. There has been pay polarisation in the high skill categories, with a few professional and managerial workers seeing pay increases but many others sliding down the pay hierarchy.

Median hourly wage by occupation (RPIJ-adjusted to April 2015 prices)

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Source: Resolution Foundation

Our workforce might look more skilled but the value our labour market puts on those skills has gone down. The UK’s human capital shallowing, the fall in the value of human capital per head, is the result of the low market value of its skills. It’s another feature of that high-skill, low wage recovery.

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