Fàilte gu Alba
Craig DalzellThe Scottish Government has now published paper six in its series of independence white papers – the successor series to the 2014 Scotland’s Future white paper. “Migration to Scotland after independence” builds on that work in 2014 and on later work in 2020 calling for the devolution of immigration powers and is, honestly, a refreshing read compared to the UK’s increasingly despotic and hostile attitude towards migrants (I admit that this is the lowest of bars, but the Scottish Government do genuinely clear it with room to spare).The policies on migration also build on several years of debate within progressive circles around how a humane migration policy should take place with additions such as not stripping asylum seekers of their right to work and live with dignity; closing detention centres like Dungavel; and ensuring that Scotland’s migration system does not asset strip countries in the Global South (by ensuring that Scotland invests in the infrastructure of these countries instead – particularly in the health sectors) all being extremely welcome policies.The expansion of possible visa routes for those who don’t qualify for Free Movement (i.e. migration from the EEA and Common Travel Area – little is said about possible expansion of Free Movement agreements to other nations) is worth discussing though beyond the scope of this newsletter. I will pull out one critique in particular though attacking the Scottish Government for awarding visa points to speakers of Gaelic (for my part, I’d go the other way and include Scots speakers on that list too and I’m disappointed that the Scottish Government didn’t). I always thought it was more than a little absurd that some (certainly not all) British Unionists would turn so against Britain’s indigenous languages – especially the ones that have been spoken here longer than English has. Still. That’s a linguistic and cultural issue, not a migration one.Where I do have my major issue with this paper lies not in its policies nor in its attitude towards people who wish to live in Scotland but in one of the fundamental and underlying rationales for increased migration – that workers are needed to pay for pensioners.
The Old Age Dependency Ratio
Bill Johnston and I covered this in detail in our book All of Our Futures. There is a severe misunderstanding (perhaps a deliberate one) in the politics of many countries in the developed world that runs that your income tax and national insurance (or equivalent taxes elsewhere) directly pay for the state pensions and other expenses of people who have retired and, in turn, once you have retired the then current workers of that time will pay for your retirement. This runs concurrently (if somewhat paradoxically) that you are “owed” your retirement due to the accrued payment of your taxes throughout your working life. In statistical terms, this is broken down into what’s known as the “Old Age Dependency Ratio” or OADR which measures the number of people of retirement age in society as a ratio of the number of working age people in that society (whether either are working or not). Right now there are about 310 pensioners in Scotland for every 1,000 people of working age and this number is projected to steadily increase over the next several decades as Scotland’s demographic pattern matures in line with every other developed economy on the planet (people living in developed economics tend to live longer and have fewer children).However, the line that workers pay for pensioners is simply not true. Your income taxes do not directly pay for state pensions. Even where semi-hypothecated pots like the UK National Insurance Fund exist, they are backed by a single fund in the Treasury (and MMT-minded folk shy away from the term “fund” at all, but that’s a discussion for another time). Even if the Government still does not adopt MMT’s spend-then-tax framework, there is no reason why pensions cannot be backed by sources of tax revenue other than direct taxes on workers income such as land taxes, or productivity taxes on corporations (something that might be particularly important if automation drives more and more workers out of jobs).
You Are Not Your GDP Growth
There’s another reason hiding behind the OADR though that slides out almost as soon as you take the time to look at it. The Scottish Government (again, in common with far too many developed governments) is utterly wedded to the idea that the only successful economy is a growing economy. There are several ways to grow the GDP of an economy and these were adopted by the Scottish Government via the 2018 “Sustainable Growth Commission”. The first of these is “productivity” – using better technology and tools so that one hour of your work produces more “value” than it did before. However, productivity growth particularly in the UK has stalled. Part of the reason behind this is that we’re now a largely service-driven economy and unlike manufacturing where a better production line allows the making of more widgets-per-hour, service productivity is difficult to increase. A carer who cares for more clients-per-hour by cutting their visits from 15 minutes to 10 minutes each is servicing more people in a shift, but it’s hard to argue that they’re delivering more – or better – care.The second way to grow an economy as outlined by the Growth Commission is “participation”, the idea that there is a vast pool of underused workers in the economy that should be put to work. Except that it turns out that the vast majority of people currently not working have good reasons to not work – most are students, retirees, folk who are sick or disabled, folk who need care or folk who are caring for others without considering it to be a “job”. Policies like a Job Guarantee might help with the few who are out of work and can’t find a way back in but many of those will not take such a job if it doesn’t match their skills or if it’s only paying minimum wage (as many Job Guarantee proposals merely do).The third and final method of growing GDP if people can’t “work more” or “work better” is to find more workers. Yes, there are proposals to try to make more Scottish workers in the traditional and time-honoured way, but even if we do that’ll take too long (say, 18 years or so) so will be too late to sort the peak of the claimed coming demographic crunch. So that leaves importing workers from elsewhere, and hence we get these immigration polices.However, bringing in more people might well grow overall Scottish GDP but it might not do anything about GDP per capita. You, as an individual, won’t live in a richer country – just a more populated one. And with global populations projected to peak in the next few decades Scotland risks running a zero-sum game against the rest of the world. We might be saying that we don’t want to asset strip the Global South of its people and skills...but we’re also kind of saying we’ll do it anyway. This all goes more than double in a world where you increasingly don't benefit from your GDP Growth anyway as Capital and Rentiers have increasingly hived increased productivity off as their profits instead of your wages.
Why Do We Need To Grow GDP?
We have to question what the purpose of GDP growth actually is anyway? In 2019 Katherine Trebeck and Jeremy Williams wrote The Economics of Arrival which asked this very question. What is the purpose of GDP Growth? Given that we live on a finite planet, when is GDP ever going to be “high enough”? This is the purpose of newer discussions around a wellbeing economy which says that the purpose of an economy isn’t to get bigger but to provide enough for a decent life for everyone (though the Scottish Government still interprets that through the lens of GDP Growth as well). Wellbeing Economists should start looking at migration politics through this framework too and this is a discussion we should start having. I’m positive about the migration policies the Scottish Government are putting forward in this paper but I want to know if they are being put forward because they want Scotland to be a place where everyone can live well, or is it just going to be a country where we encourage migrants to fill the boots we leave behind when we retire so that they can keep making the GDP line go up.
