Who needs low-skill migrants anyway?

The Home Office document leaked to the Guardian suggests that, after Brexit, life will be tougher for those EU citizens coming to the UK to do lower skilled and lower paid work. While those in “high-skilled occupations” will be granted work permits for three to five years, those earning less than £18,600 a year will only be entitled to a 2 year visa and will no longer be allowed to bring their families to the UK.

The paper also calls for employers to give preference to UK workers and suggests that they should complete an “economic needs test” to confirm that no suitable applicants are available before recruiting EU citizens.

The document is not government policy and it is not yet clear who wrote it or even how many ministers or senior civil servants have seen it. Nevertheless, it tells us something about the thinking on which future immigration policies are likely to be based.

The paper seems to be based on the following assumptions:

  1. There will be a continuing supply of workers who want to come to the UK so much that they will be prepared to put up with whatever restrictions and inconvenience the government throws at them;
  2. There is a ready supply of UK workers able and willing to do the jobs that are currently done by EU migrants.

The first of these is highly questionable. The most recent immigration figures showed a sharp reduction in immigration from the EU. The falling value of our currency, better opportunities elsewhere, continuing uncertainty about their status and, most probably, the toxic atmosphere in the UK have led to a drop in the number of workers from the EU15 and EU8 countries.

Chart by Resolution Foundation

As Jonathan Portes says, before we have even taken back control, a lot of EU migrants have decided to leave anyway.

We’re not being more selective. It’s the immigrants who are being more selective. It’s not that we’re choosing to have fewer immigrants, it’s that fewer immigrants are choosing to come here.

Will there be plenty of British workers waiting to fill their jobs? Probably not. The idea that there is an army of workless people in the UK is even more out-of-date. The UK-born working-age population is no longer increasing. According to some estimates it has already peaked. In a speech last month, Bank of England MPC member Michael Saunders pointed out that unemployment is at a 40 year low and the underemployment associated with the recession is falling rapidly too. He concluded that there is very little spare capacity in the labour market. This, combined with the slowing down of migration from the EU, is already causing labour shortages in the most migrant-dependent industries.

Chart by bank of England using BoE and ONS data. The three industry sectors with the highest share of employment of EU nationals are manufacturing, accommodation and food services, and administrative and support services.

The authors of the Home Office paper may argue that they are simply reflecting the views of a majority of voters. As British Future’s report published earlier this week showed, people tend to think that the economy needs high skilled workers but that the number coming to do lower paid jobs should be cut back. We like doctors and scientists but we are not so keen on low skilled workers.

Or, at least, we are not keen on low skilled workers when they are called low skilled workers. Give them specific job titles, though, and attitudes tend to change.

It is striking, however, that even within this category respondents are able to make pragmatic concessions to secure the economic gains of migration: two-thirds of people (66%) would be happy for the number of seasonal workers coming to the UK – to work on farms, food processing factories or in hotels, for instance – to remain at current levels (55%) or increase (11%). That view is also held by more than half (55%) of Leave voters in the referendum, and 78% of those who backed Remain.

Digging down into the detail of attitudes to different kinds of lower- skilled migration there is further nuance. While the pubic would like to reduce low-skilled migration overall, there are numerous exceptions. Attitudes soften when people are asked to give their opinion about people migrating to do a particular job – whether that is care work, fruit-picking or waitressing.

But apart from the care workers, construction workers, waiters and fruitpickers, what have low skilled* EU migrants ever done for us?

It’s all very well to say, as some do, that we managed before (whenever ‘before’ was) without all these EU workers. Maybe we did but many of the things we now take for granted are dependent on migrant workers. As the FT’s Sarah O’Connor said, we’d miss those unskilled migrants if they stopped coming:

Have you ever noticed how supermarkets run out of fruit salads on sunny days when everyone decides they fancy a picnic? No? That’s because they rarely do.

I never really thought about the mechanics behind this until I interviewed a man who supplied temp workers to a British company that made bagged salads and fruit pots. Demand would fluctuate according to the weather, but British weather is notoriously changeable and fresh products have a short shelf life. So the company would only finalise its order for the number of temps it required for the night shift at 4pm on the day. Workers on standby would receive text messages: “you’re on for tonight” or “you’re off”.

Most of this hyper-flexible workforce had come to the UK from Europe. “We wouldn’t eat without eastern Europeans,” the man from the temp agency said confidently.

And if the rising cost of food and building work doesn’t worry you, the impact on the care sector should. Care homes are already experiencing recruitment difficulties. Lack of space in care homes has a knock-on effect on hospitals, which are themselves likely to suffer from staff shortages if EU migration is significantly reduced.

Just because these workers are low paid it doesn’t mean that they are not necessary. The government may be hell-bent on reducing the number of low-skill migrants but it isn’t telling us how it plans to deal with the consequences. People might not complain too much when they can’t get salad on a hot day but when their hospital is full and they can’t get help for their elderly relatives they will blame the government.

The government is under pressure to ‘do something’ about immigration. The trouble is, what it seems to be proposing is based on flawed assumptions and may well cause more problems than it solves. The fact is, we need these so-called lower skilled migrants as much as we need the engineers, scientists and doctors. But perhaps people won’t realise that until they have gone.

 

* The term ‘low skilled’ is contentious here. In a previous role I used to recruit care workers and I was amazed by their physical, mental and emotional resilience. If anyone thinks it is a low skilled job, I suggest they try being one for a day. However, it is these and the other jobs on this chart that will be designated low skill for migration purposes. What constitutes skill and whether it is high or low is a discussion for another day.

 

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24 Responses to Who needs low-skill migrants anyway?

  1. Patricia Leighton says:

    Another good reality check here. Anecdotally, EU migrants in the NHS and care work are being replaced by non EU migrants and not by UK born workers. Is this what we wanted?

  2. Nicola Gunn says:

    Just wanted to endorse your “another day” topic of the skills (and temperament) required by a good carer. Look forward to seeing your take on this in due course

  3. Dipper says:

    To repeat, Freedom of Movement in the EU has absolutely nothing to do with economic benefit and everything to do with undermining the notion of the nation state and replacing it with the EU as the political entity.

    Take the NHS. We granted Freedom of Movement to 500 million and this was not sufficient to meet the labour needs of the NHS. We met the labour requirements by importing skilled workers directly from nations such as the Philippines not by extending FOM to those countries.

    If allowing unlimited immigration of cheap labour is a route to economic wealth for all then the solution to the west’s economic decline is crossing the Mediterranean as we speak. All we have to do is allow everyone in Africa who so desires to come to the EU. Funnily enough there doesn’t seem to be an official plan to do that, and notably you are not suggesting that here.

    Furthermore, the major economic problem for the UK has been flat or declining productivity. This is because a massive supply of labour is available at cheap rates. Business is a question of maximising profit within the constraints, and currently labour is not a constraint, hence no need to optimise its use. In order to improve productivity we have to make labour a scarce resource. Of course businesses complain – they will always complain about the constraints; it used to be high interest rates, but now they are zero they complain about something else.

    The other half of this equation is working tax credits and the resulting 90%+ marginal rates of taxation that make low-paid work a pointless exercise for many indigenous workers. So one way of improving domestic labour supply is to implement Universal Credit in place of Working Tax credits.

    • dazwright says:

      I would make three points in response to your comment.

      1) Freedom of movement isn’t just about allowing people to come here to create wealth. It’s also might right to go to other countries. The UK doesn’t understand that freedom of movement isn’t about immigration, it’s a reciprocated right.

      2) Creating scarcity might cause businesses to seek to increase productivity but their most likely route to do this is through mechanisation. That might create a notional increase in productivity but it will be at the expense of income tax revenue and the redistributive impact of labour spending wages.

      3) Your point about the other half of the equation assumes there is a pool of people not taking low paid work because it isn’t worth it. As we’re effectively at full employment, where are these people?

      • Dipper says:

        thanks for your reply.

        1. Understood, but again FOM is about creating a European state. I know quite a few people who have moved abroad and nearly all of them are not in the EU so for many Brits it is not a significant benefit.

        2. An increase in productivity would be beneficial if individuals create more wealth. More taxes but also more productive capability for individuals so potentially higher wages. This blog has highlighted a number of times the problems caused by stagnant productivity.

        3. There are a lot of people not taking additional low work but they appear as employed due to them working a minimum number of hours. There is opportunity for people to work more, work harder. Some work will go, but I am not convinced that the additional wealth generated by importing low-paid European workers offsets the increase in house prices, strain on public services, congestion on roads. I am talking about the direct experience of my area which is a multi-mile building site in all directions at the moment.

        • Melvin says:

          Would business not just up sticks and move to cheaper labour countries and just import services and goods using our unilateral free trade agreements?
          UK would sit back and consume. Why do anything when you can buy everything cheaper else where. If I was business I would be looking to move operations where labour is cheaper and flexible. To countries where I can import skills as needed and not face bureaucracy. MPC

    • gunnerbear says:

      “Have you ever noticed how supermarkets run out of fruit salads on sunny days when everyone decides they fancy a picnic? No? That’s because they rarely do.

      I never really thought about the mechanics behind this until I interviewed a man who supplied temp workers to a British company that made bagged salads and fruit pots. Demand would fluctuate according to the weather, but British weather is notoriously changeable and fresh products have a short shelf life. So the company would only finalise its order for the number of temps it required for the night shift at 4pm on the day. Workers on standby would receive text messages: “you’re on for tonight” or “you’re off”.

      Most of this hyper-flexible workforce had come to the UK from Europe. “We wouldn’t eat without eastern Europeans,” the man from the temp agency said confidently.”

      F**kin’ s**t from a posh a Remainac vagina….if her job was under threat or she was having her wages smashed down or being f**ked round for a job at short notice, I bet the woman would soon be complaining. It’s attitudes like hers – clearly showing she hates Leavers that proves she’s scum – utter scum….

      “Most of this hyper-flexible workforce had come to the UK from Europe. “We wouldn’t eat without eastern Europeans,” the man from the temp agency said confidently.”

      More s**t – this time from an a***hole in an office….we would eat but farmers would have to pay more to get workers in…not s**t ZHCs, ‘Hyper flexible’ – code for utter s**t wages and conditions whilst taxpayers are expected to pay inwork benefits to top the profits of the arsehole talking about hyper flexibility.

      And Remainers and their scum mouthpieces in the CBI and IOD wonder why Leavers know that Remainers are utter s**t-bags.

      And I doubt Fairytales has the stones to post my response but I thought it needed saying,…in industrial language to maybe get the message across.

    • gunnerbear says:

      “This is because a massive supply of labour is available at cheap rates. Business is a question of maximising profit within the constraints, and currently labour is not a constraint, hence no need to optimise its use.”

      Well said….tell you what when white collar journalists start getting sacked and replaced by cheap labour, it will be great to hear their whining and then laugh as the realisation hits ’em that they’ve never really been the elite…

  4. gunnerbear says:

    ” The fact is, we need these so-called lower skilled migrants as much as we need the engineers, scientists and doctors. But perhaps people won’t realise that until they have gone.”

    Do we b****ks…we just need wages out of the gutter i.e stop firms having their pay office supported by the taxpayer.

  5. gunnerbear says:

    “but when their hospital is full and they can’t get help for their elderly relatives they will blame the government.”

    That’s why we pay taxes….so we can train our own medical personnel….s’not rocket science.

  6. Gary Simmons says:

    Good points Rick. It is interesting that all the debate about migration is separate from the a) the workforce needs of the country and b) the supply of UK-born workers. Given that the UK-born workforce has peaked, with ageing baby-boomers not being replaced by younger generations, in order to increase supply, then those who are currently inactive need to be tempted to join or re-join the workforce. There seems to be a dearth of policy suggestions on how this could be achieved.

  7. BenHR says:

    This touches on the one truth that has always been hidden from the public (although many worked it out) – the link between migration and a positive economy. Obviously others simply ignored this truth altogether as it was inconvenient and didn’t fit with their Worldview (whether they knew it to be true or not). Now we are finding out, although many still won’t explicitly tell us or admit this to either ourselves or themselves.

  8. Tony Holmes says:

    A very late comment.

    If you look at a graph of the rate of growth of UK real GDP per head from, say, 1970-2007, the long-term trend rate of growth is pretty much constant. This occurred alongside net annual emigration in the 1970s and early 80s, with annual immigration then gradually increasing to annual rates of around 50-75,000 in the mid 90s. Then in 1998, net immigration suddenly leaps over 100,000, and by 2005 it’s over 200,000. My question is: why did the UK economy suddenly need all this extra immigration ? It doesn’t seem to have increased the trend rate of growth of real GDP per head, but would the rate of growth have fallen below trend in the absence of this immigration ? If so, why ?

    And why did an economy with sharply rising unemployment (UK 2008-2011) still “need” net immigration at levels way above anything seen in the 1990s, with real GDP per head growth having come to a halt ?

    • gunnerbear says:

      The UK didn’t need the dross o’ the world….Labour under the c**t Blair wanted the country smashed because he thought if we stuff the country full of benefit soaking s**te, Labour would always be in power.

  9. BenHR says:

    Immigration was on the high side, but nowhere near what some ‘Politicians’ would have people believe – many people overestimated the actual numbers. It will be interesting to see how a dramatic reduction in immigration impacts the economy going forward, because something definitely is.

  10. Rolfus Adolfus Malthus says:

    My god, that quote from the FT is enough to make anyone vote leave just to the spite the author.

  11. Pingback: Problems with triangulating over immigration - Daily Economic Buzz

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