In the context of financial crisis and recession, concern has grown in the UK and elsewhere over the relationship between labour immigration and indigenous unemployment. This article argues that, to understand this relationship, it is necessary to adopt a historical perspective and examine closely both the experiences and representations of migrant and indigenous workers and the unemployed together, as these develop and evolve in local labour markets over time. Presenting a case study of employment shift at a meat processing factory in Merthyr Tydfil, Wales, the article demonstrates how the promotion and acceptance by employers and others of a discourse that constructs Merthyr locals as bad workers reframes a history of local labour conflict as a matter of endemic worker deficit, and shifts attention away from problems of poor job quality to alleged problems of poor local labour supply, thus legitimating the turn to employing migrant workers in the first place. It is argued that investigating these kinds of local labour market histories is essential for developing appropriate and effective policy on immigration, employment and unemployment alike.