A blog by Jon Danzig
On 14th May 2015, the Governor of the Bank of England, Mark Carney, was interviewed by journalist John Humprhys on the BBC Radio 4 programme, ‘Today’. A video of the interview can be seen on the BBC website.
“Even now the Governor of the Bank of England is admitting that untrammelled freedom of movement for working class jobs has caused massive wage compression over ten and fifteen years for working people in this country”
(See related story: ‘Wrong answers on BBC Question Time’)
I asked the Bank of England Press Office if Mr O’Flynn had been correct in his comments, or had the Governor of the Bank of England been misquoted? The Bank of England responded today:
“The Governor’s exact words are below from his interview on the Today programme last May. He explains the actual situation regarding migration and wages.”
When pressed to provide a more specific response, the Bank of England Press office replied:
“Unfortunately we won’t be able to provide a response as we already provided clarity on the migration issue back in May. Unfortunately some, from all political persuasions, quote us in different arguments and we simply stay out of the politics and highlight what was actually said.”
So here is a transcript from the BBC radio interview of what the Governor of the Bank of England actually said about wages and migration. I will leave it to my readers to consider whether or not UKIP MEP, Patrick O’Flynn, was correct in his comments on BBC Question Time.
Mr. John Humphrys: And one of the reasons why it hasn’t picked up may be that we are sucking into this country some — so much cheap foreign labour.
Mr. Mark Carney: Well, I would really dampen down that explanation. Let’s — the facts of this recovery have been that there has been a huge growth in employment. A huge growth in employment. One of the strongest job markets in the world. And we have seen a big increase in the willingness of the British people, British nationalists — nationals to work.
So I’ll give you a couple of statistics on that. In the course of the last two years, the number of older workers, people in their fifties and their sixties who’ve stayed in the labour market, has been more than 300,000 more than we would have seen in previous times. In addition, people want to work more hours.
That’s another 200 to 300 thousand more workers — effectively more workers. Compare that to the increase in net migration, the increase in the number of people coming to this — these shores. The first two numbers I just gave you total up to more than 500,000. The increase in net migration over that same period, the last two years, is 50,000. So the real story here —
Mr. Humphrys: But we have a —
Mr. Carney: The real story is that British people have wanted to work more, and what’s happened with the economy — and now I’ll get to productivity. What’s happened with the economy is that jobs have been created, people are getting those jobs. Now that spare capacity is being used up. As you saw yesterday, the unemployment rate is down to 5.5 percent. We’ve created 200,000 jobs in the last three months alone. So that spare capacity is being used up.
And now, for the economy to move forward, it’s going to be a story of productivity.
Mr. Humphrys: But just to stay with foreign workers for a moment, there is a vast number of them working in this country, 4.8 million in total, and a large number have come in over the last few years. And many of them — most of them are working for very little money indeed.
Mr. Carney: What you — what you see with foreign workers is that when they first come in, they tend to work in jobs — lower-skilled jobs. They tend to over-fill those jobs, so they have more qualifications than the jobs for which they’re working.
Over time, they move up the skill chain, they move into jobs that are more suited for the skills that they have. They contribute to that increase in productivity. That’s something we see across the economy.
— Jon Danzig (@Jon_Danzig) January 18, 2016
— Jon Danzig (@Jon_Danzig) January 18, 2016
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