Affordable Housing Institute : US

As Europe experiments with its weak-tea version of federalism (or more precisely, with its twenty-first century version of the Articles of Confederation),

 

They didn’t work very well.

 

it is discovering that no matter how many provisions one writes into one’s (rejected and now-abandoned?) proposed constitution, people do what is in their interest, and markets move faster than governments.  As a result, national entities must cope with problems that are orders of magnitude larger and more complex than they had tidily envisioned, as illustrated by this story from the Times of London:

 

Almost half a million Eastern Europeans have applied to work in Britain over the past two years, according to Home Office figures released today [22-Aug. — Ed.]

 

The holy grail of employment

 

As I discussed in De Soto’s dryer, high-income metropoli attract low-income workers in a continuing economic wind, and once the internal barriers are down, the wind blows where it will. 

 

Why Britain?  Two reasons:

 

1.       The most favorable large-nation work climate in the EU.

2.       English, everyone’s second language. 

 

The arrival of so many motivated low-cost workers should be a good thing, shouldn’t it?

 

… that will put the Government under increased pressure to restrict immigration from Bulgaria and Romania.

 

If they are crossing all of Europe to reach London, you know it’s the best job market.

 

Between May 2004 and the end of June this year, 447,000 people from Poland and seven other eastern European countries that acceded to the European Union in 2004 sought work in Britain. Just over 427,000 were approved to start work.

 

That is a huge jump in the work force, and one of its immediate impacts is a boost to the British economy, which continues to be Europe’s strongest (except for their neighbors the Irish, who have all the same assets plus even lower Eurozone interest rates):

 

The influx is much greater than the Government’s prediction of 15,000 immigrants per year …

 

I’ll say — it’s thirty times as big!

 

… and the actual number of workers from these countries is likely to be higher still since the figures do not include self-employed people like builders or plumbers, who do not have to join a workers’ registration scheme.

 

So prevalent and visible are these newcomers that the phrase “Polish plumber” has entered the Islington lexicon as a visceral symbol of cheap labor.

 

“I’m staying in Poland, do come over”

(A French attempt at travel humor.)

 

But with all that labor comes housing demand:

 

The United Kingdom’s population is just over 60 million people; the country has about 24.2 million households, or 2.5 people per household.  Assume for the moment that the newcomers live more densely, doubling and tripling up in flats.  At 3.00 people per household, that’s 142,000 new homes required — the equivalent of a whole new city the size of the local authority areas of greater Reading, Oxford, or Canterbury.

 

40% more than the capacity of Michigan Stadium, appropriately known as the “Big House“

 

(In US terms, it’s the equivalent of a whole new Brownsville, Texas, — which is itself experiencing a population boom from maquiladora employment just across the Rio Grande in Matamoros, Mexico.)

 

This in a country with 25.3 million homes of all types, of which 70% are owner-occupied, 20% are in social rental, leaving only 10% — that is, 2.5 million flats — in private rental.  If we further assume that the social rental sector is nearly fully occupied, that means there are 2.5 million homes, of which 1.1 million are unoccupied (25.3 - 24.2), leaving 1.4 million in rental circulation.

 

In short, 142,000 new households is a 10% increase in rental demand.

 

And keep rising.

 

Actually, more:

 

Tony McNulty, the immigration minister, said estimates that included self-employed people would put the total number of immigrants from the so-called “A8″ nations nearer to 600,000.

 

As in the US, the immigrants do low-wage, high-labor jobs:

 

Ministers’ claims that the workers help to fill gaps in the labour market, especially in administration, business and management, hospitality and catering, and were seldom dependent on state benefits were borne out by the figures.

 

The immigrants applying for work included 95,868 factory workers, 15,840 waiters and waitresses, 24,000 kitchen and catering assistants, 6,500 bus, lorry and coach drivers, 12,700 care workers, 1,500 teachers, researchers and classroom assistants, 600 dental practitioners and 2,000 GPs, nurses and medical specialists.

 

The underworld of low-paid London workers

Was movingly explored in Dirty Pretty Things

 

One might reasonably conclude that, like their US counterparts, these are indeed ‘key workers.’  Certainly they are workers:

 

Most are young — 82% are aged between 18 and 34 — and 93% had no dependants in the UK. 97% are working full-time and of 5,943 initial applications for income support and job seekers’ allowance, only 768 were allowed to carry on with their applications.

 

As we speculated above, they are living ‘on the economy’ and not in social housing:

 

One hundred and ten have been given council houses [virtually none — Ed.] and 27,280 have claimed child benefit.

 

As with the great 1850 Irish emigration to America, they settle near where they land:

 

The Anglia region, a group of eight counties in eastern England, has overtaken London as the most popular destination for immigrants, with 64,980 setting up home in the area.

 

The second most popular area is London, which has 58,580 immigrant workers from eastern Europe. Wales was the least popular choice.

 

Not just for proximity, for jobs.  For that is what brings them — the work, the money, the prospect of a better life by the sweat of their brows.

 

A Polish man looks at a job message board outside a shop in West London

 

The historical irony here is that, fifty years after Khrushchev boasted, “we will bury you,” in fact the West has buried the Soviet model.  Communism sought to guarantee equality for all, and achieved it through equality of poverty.  The West, whose only offer of equality is of opportunity, created the economies that make more people richer.

 

The Government’s failure to accurately predict the number of workers arriving from these countries has already provoked a stormy debate about whether there should be restrictions when Bulgaria and Romania join next year.

 

Wrong, wrong, wrong!  If they come, and they work (and do not go on the dole), how can that be bad for the nation?

 

Alistair Darling, the Trade and Industry Secretary, insisted at the weekend that there would be no “open door” to migrant workers.  His remarks were widely interpreted as a signal that the Government was preparing some form of control on workers coming from the two former Soviet bloc states.

 

Not this week, Darling

 

You open the doors, you give them free movement, and they move!

 

Damian Green, the shadow immigration minister, accused the Government of ducking the issue and said it should impose conditions similar to those imposed by most other European countries in the last wave of accessions.

 

“Controlled immigration makes life much better for everyone involved. It ensures the public service and housing infrastructure can cope and avoids people coming here only to end up without work and on the streets as we are already beginning to see in London.”

 

The strains on housing and other public infrastructure will be huge, especially in the employment centers, and there’s no indication they will slacken.  The Rowntree Foundation has put out a great study of supply and demand (link in .pdf) showing a widening gap for the next fifteen years, but the situation will become serious well before that:

 

The think-tank Migrationwatch, which campaigns against mass immigration, has predicted that 300,000 Romanian and Bulgarian workers could arrive in the UK over a 20-month period.

 

However, the Institute for Public Policy Research, a left-wing think-tank, estimates that about 56,000 Romanian and Bulgarian workers would come to Britain next year.

 

Either way, housing demand will surge; if you wave money, they will come.

 

Whether for queen or for economic Darwinism, they come

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