Life can be so awfully cheap. The tragic loss of refugee lives in the cold waters of the English Channel last week was a sharp reminder to politicians who should know better that “migrants” are real people with families, futures, fears and dreams. We too know better. As Jack Dorsey stepped down down from his Twitter CEO position this week it was Stripe’s Patrick Collinson who noted Dorsey’s successor, Parag Agrawal, and the current CEOs of Google, Microsoft, Adobe, IBM and Palo Alto Networks all grew up in India. I’m thinking pretty impressive, and not Priti Patel. The UK Home Secretary is a shameless immigration scare-monger but, to borrow an Obama phrase, I feel the arc of history can be bent “toward the hope of a better day”. Here are a few snippets which might steer this hope….
- Patel launched a fast-track visa scheme in the summer to entice Nobel laureates and other prestige academic talents to the UK. This was intended to be the talent apex of the new UK point-based immigration system. Well, the results are now in and apparently these new “I’m a Celebrity, Get Me Into Here’ visa auditions attracted precisely zero applicants.
- Further down the talent pyramid the newsflow is equally challenging. More than 1 million UK job vacancies remain unfilled with the hospitality, construction and logistics sectors particularly badly impacted. From truck drivers to butchers to fruit pickers, the “sunlit uplands” story of Brexit is in danger of becoming a childish denial ritual involving Tory Teletubbies and a macabre spit-roasting of Peppa Pig.
- And, it’s not just a short-term challenge. A survey by think-tank, Autonomy, who specialise in the future of work found that one in four workers were considering quitting their jobs in the next few months, and as many as 41% of workers were considering leaving their jobs in the next 12 months.
This is not just a Brexit or UK phenomenon. If anything, people trends are even more pronounced in the US. A record 4.4 million Americans quit their jobs in September. That’s a whopping 3% of the total workforce jumping ship in just one month and has been termed “The Great Resignation”. I’m not so sure. I think it’s a structural rather than a behavioural trend. The FRED(St Louis Fed) data suggests the movement is primarily happening at the lower end of the wage scale. Yes, minimum wages are moving higher but it might be too late to keep the current talent pool on board. Here are a few factors to consider….
- Millions of workers have upskilled with on-line courses and received certification.
- The creator economy and work-from-home optionality is providing alternative sources of income. Meanwhile, workers in healthcare, hospitality, retail and food services won’t have missed the fact that the white collar work force has just gained enormous flexibility as to where and how they do their jobs.
- More individuals are setting up their own businesses than ever before. The US Census Bureau said that by Q3 of this year there were nearly 1.4 million applications filed to form new businesses. That’s a pace 40% higher than the pre-pandemic year of 2019.
These are very real structural shifts in the labour force. We should also consider factors in older liberal democracies which could be driving both labour dynamics and populist immigration politics. The awkward truth in some societies is that there are significant social/healthcare issues which are affecting employability. Let’s start with those that possibly can’t hold down regular employment:
- In the past 12 months the US saw 100,000 drug overdose deaths. What multiple of this number in the general population are dependent on drugs? Fox News won’t have the answer but their audience numbers might be a reasonable starting point….
- The Pentagon reports that a whopping 24 million of the 34 million Americans in the 17-24 age range are ineligible to serve in the military. Of this staggering 71% failure rate, a full 27% of young Americans are too overweight to join with a further 32% having disqualifying physical and mental health issues.
We also know that life expectancy for white males in the US is now on a reducing trajectory for the first time in decades and at a pace not seen since WW2. Then consider those that opt for retirement after a lifetime in the labour force. Every day in America 10,000 people turn 65. Say it slowly, ten thousand every single day, and then think about pension plans and stock markets which go up nearly every year. In fact, the total flow of investment funds into equities in the last 12 months hit $1.1 trillion which is more than the combined inflows of the last 19 years! The wealth share disparity between capital and labour is at levels not seen since the 1930s and suggests something is about to give.
Modern economies’ labour forces are undergoing massive structural change. The solutions are not easy and require significant innovation in the immigration policies of liberal democracies. So, we must be wary of populist political opportunism. Building Trumpian walls and inflating Priti dynghies smacks of hot air and fascist jackboots from previous centuries. We can do better and the terrified refugees from Iran, Kurdistan and Afghanistan deserve “the hope of a better day”. Indeed, the message for traditional low-wage businesses is possibly even more stark; they’d better hope there will be better immigration policy days ahead or they will perish too.