Wage-spending non-nationals fuelling economic boom

You know that Polish girl who just served you a coffee, the one with the high cheekbones and the green eyes? She arrived here this week. Her friend texted her last week to tell her that one of the Irish students was leaving the cafe and, if she got here quickly, she’d be set up.

Two thousand miles away, in the local internet cafe of a small village called Myslowice, Magda found a Katowice-to-Cork flight for ‘1 (www.wizzair.com).

With ‘200 in her pocket, wired by her brother via Western Union from Sweden, she arrived in Cork last Wednesday night.

The Skylink bus from the airport to Patrick’s Street, at ‘5, cost five times more than the flight. This was her first experience of Irish prices. The 11 o’clock bus from Parnell Station pulled out at a quarter past. She would have been nervous, but just before her credit ran out, her friends had texted her telling her to expect a healthy and very un-Polish disrespect for timetables in her new homeland.

The number 233 roared through a damp Munster night, out the Straight Road towards sprawling Ballincollig – still festooned with crestfallen Rebel flags. From there, it sped through Ovens, Killumney and Srelane, hurtling (the driver obviously wanted to get home) to her final destination: Macroom.

Thirty-six hours after getting the original text from her old school friend, Ania, 25-year-old Magda had moved from western Poland to west Cork. The little one-bedroom flat over the butcher’s on Castle Street was a bit cramped for four Polish girls.

On the other hand, her parents’ Communist-built apartment, which she had just left, was hardly any bigger. She didn’t care; she was ecstatic.

On Thursday morning, Magda was learning to make cappuccinos and lattes and trying to decipher the local patois, which sounds nothing like the English she learned at school. She caught her reflection in the flecked Cork Dry Gin mirror and pinched herself at the thought that she had actually done it: she’d got out.

This was her first big adventure and Magda Pawlowski was about to live the ‘new Irish dream’ and nobody was going to stop her.

Figures released this week by the Central Statistics Office (CSO), which, if you are interested, were in the Quarterly National Household Survey and can be viewed on www.cso.ie, reveal that more than half of the increase in employment this year has been due to people like Magda.

Of the impressive 87,800 jobs created here in the period from March to May, 48,000 were taken by foreigners. And of these, 34,000 were young immigrants between the ages of 25 and 35.

These statistics, which did not get much coverage because of all the ballyhoo about Michael McDowell, will have a more profound impact on our society than whoever wins the next general election (let alone who leads a minority party).

Just think about it for a minute. First, proportionately Ireland is creating three times more jobs per day than any other country in Europe. Why is this? Is it all good news?

Second, half of these new jobs are going to immigrants. If this continues, there will be more foreign workers than Irish workers in 30 years’ time. What implication does this have for infrastructure and resources?

Third, our dependence on immigrants is increasing rapidly. For example, in the second quarter of this year, the labour force increased by67,000, but over 80 per cent of these new workers came from abroad.

The Irish component of the new labour force is shrinking. Figures like this are unprecedented in Europe. What political picture should we draw from this evidence?

Looking at the pure economics first, the demand for labour is now phenomenal. The usual suspects are there again: construction, retailing and ‘ tellingly – security services are the three biggest growth areas.

There is now clear evidence that the immigrants are fuelling the boom by spending a higher proportion of their wages than they were doing a few years ago. Rather than ‘taking our jobs’, they are generating jobs for us. So supply is creating its own demand. The more immigrants, the more money in circulation, the more spending, the more mortgages and the more demand for extra workers.

With the foreign population growing so quickly, huge demands are also placed on our health and education services. Not surprisingly, employment in health and education services expanded rapidly by 25,000 in spring of this year.

At first glance, this seems impressive, but despite these extra workers and the huge increase in credit, the economy is not growing as quickly as it was. We are not getting as big a bang for our buck. In the recent past, Ireland was achieving higher growth rates with fewer workers and less credit.

Today, to achieve the same growth rates we have to throw thousands more extra workers and millions more extra euro into the economic mix. This means that the return on effort and cash in Ireland is falling – a mirror image of increased costs and collapsing value for money.

This means we are using more perspiration and less inspiration. Economists call this a productivity problem. We are running to stand still.

As our country’s population swells, immigration becomes a resource issue, not an employment issue. When Ibec – on the right – says the economy needs more workers, it is only seeing the dilemma through a narrow-gauge employer perspective.

Equally, when voices from the left champion multiculturalism for its own sake, they are seeing the issue through an equally narrow kaleidoscope – a sort of united colours of Benetton view of the world.

So the left and the right are singing from the same hymn-sheet which can be summed up as “the more, the merrier”.

However, if the economic vulnerability signalled by lower productivity were ever to lead to a situation where Irish workers started to lose out to immigrants and jobs became scarce, it is not difficult to foresee racist problems.

Have we prepared ourselves for that?

Overall, this week’s figures from the CSO are extraordinary and should be championed as evidence that economies can generate such dynamism. Equally, every Magda who leaves her small town adds something new to us.

However, we are now absorbing more immigrants per head than any other European country; this should be generating a debate about their future in our country.

All we are hearing is a deafening silence.