Migration and Employment – headline numbers are not the only story

30 March 2015

Chris Lawton, Senior Research Fellow at the Division of Economics, Nottingham Trent University.

As someone who studies the economic and labour market impacts of migration, the NIACE ‘Making Migration Work’ report is extremely welcome, as it helps move the debate on from a preoccupation with the number of immigrants coming to the UK towards a more positive discussion of how the impacts need to be addressed within the context of our post-industrial employment structure.  

My view is that the UK has suffered from an over-reliance on ‘bad’ jobs since the decline on manufacturing in the 1970s and 80s. The ‘knowledge workers’ who have flourished since then are less likely to be concerned with migration – it is the lower skilled workers, often in areas left untouched by the growth of high-value services, who feel most negatively affected – even though the proliferation of poor quality jobs with limited opportunities for training and personal development preceded the sudden increase in EU migration in 2004.

Over the last decade, a large proportion of the UK media, alongside those politicians who have adopted an anti-immigration stance, have responded to every new estimate of migration in the same way. Any increase is presented as a disaster, with increasingly catastrophic language as we approach the General Election on May the 7th. The headlines accompanying the latest Quarterly Migration Statistics were predictable. If the UK has become, as David Cameron stated, the ‘jobs engine of Europe’, it is hardly surprising that it is drawing in people from recession mired European countries keen to meet that demand.

A few weeks later, the Government’s Office for Budgetary Responsibility (OBR) demonstrated that their forecasts for growth and employment depended heavily on maintaining recent levels of net migration.  Current and expected future levels of migration add 0.6 percentage points per annum to the OBR’s growth forecast (bringing their forecast for GDP growth in 2015 to 2.5%). The respected think tank the Institute of Fiscal Studies (IFS) has supported the view for some time that a reduction in net migration would lead to reduced economic growth.

So if migrants – and especially EU migrants – make an important contribution to both economic growth and UK public finances (and on which there is a high level of consensus amongst specialists in various fields) why is the belief that migration is ‘bad’ for the UK economy so widely accepted?  With no evidence of the existence of significant ‘benefit tourism’, the issue comes down to education, skills and quality of employment – for both migrants and non-migrants. And this is another area where the headline numbers drive the debate, distracting us from the stories behind those numbers. 

Employment for both migrants and non-migrants has become increasingly polarised as the economy has recovered. Jobs in the middle of the skill hierarchy – especially the Skilled Trades, already in long-term decline – have shrunk faster, whilst occupations at either end have increased. The headline employment numbers also disguise the fact that UK employment has become increasingly part-time and casualised – again for both migrants and non-migrants. Although the latest data shows that total employment in the UK has increased by 2% on the last year, the number of self-employed people working part-time has increased by 6% and the number of people on temporary contracts has increased by 5%.  The TUC have described the growing phenomenon of  casualised and vulnerable self-employment as the ‘the rise of the odd jobbers’ – not just ‘Polish builders’, but UK-born IT technicians forced to become self-employed consultants, older males having lost jobs in manufacturing or construction becoming taxi drivers or window cleaners: avoiding unemployment, but trading down on their skills.

During the recession and the initial period of uncertain recovery, policy makers stopped worrying about the long entrenched problem of the ‘quality’ of employment in the UK. Although many commentators in the media continue to obsess over the numbers of migrants each year, the increase in the total number of people employed across the UK has further distracted attention away from the quality of many of these jobs. Yet experiences of the quality of work and people’s negative perceptions of migrants are intimately connected. It is no surprise that some of the local areas where migration is a particularly contentious issue, including Nigel Farage’s target constituency of Thanet, are areas that have experienced significantly below average levels of migration.  Less than 9% of the resident population of Thanet were born outside the UK according to the 2011 Census, compared to a national average of 14%. Quality of employment is a significant challenge for such areas, and migrants are an easy scapegoat, whether they are present in any great numbers or not.

The UK continues to be over-reliant on low pay, low skill jobs – thus it is inevitable that many migrants will come to the UK to meet this demand. An ambitious economic development and industrial strategy – that addresses skills, business support, enforces employment regulation and incentivises fair wages will help to finally improve the quality of many jobs whilst simultaneously allowing us to be less concerned about the quantity of year-on-year migration.