While we all wait – and wait, and wait – for the government to provide some clarity about its plans for a post-Brexit immigration policy, the Migration Advisory Committee (MAC) has been gathering evidence about EEA citizens’ contribution to the labour market, and about the impact Brexit could have on the economy. Its interim report has many of the shortcomings that we at MRN have been flagging in immigration discourse: it takes a narrowly economic view of migration’s contribution to “the welfare of the resident population,” and utterly fails to consider migrants’ own perspectives. The report has the merit of highlighting two things: migrants make good and much-needed workers, and the continuing uncertainty introduced by Brexit is bad news for everyone. This is hardly news, however; it only confirms the conundrum we are in.
by FABIEN CANTE & FIZZA QURESHI
‘Why do UK businesses hire people from the EEA?’
The MAC’s interim report begins with the following question: why do British employers hire EEA (European Economic Area) citizens in the first place? Behind this deceptively simple question lie many a myth and an anxiety.
One is that migrant workers steal jobs that would otherwise go to British nationals. Wrong, says the MAC interim report. The evidence collected during the Committee’s latest round of research (from a record 417 contributors, including tech firms, industry representatives, campaign groups and local authorities) indicates that jobs go to migrant workers because they are simply best qualified for the job. Indeed, data indicates that, for the same job, EU citizens are typically more qualified than their British-born colleagues. This isn’t specific to the UK: an OECD report, quoted by the MAC, found that in most countries migrant workers were “over-qualified […] and have become more so over recent time periods.” Crucially, this is also true across occupations, not just for bankers or doctors.
To its starting question, the MAC report thus concludes: “The simple answer is because [EEA workers] are the best available candidates. Understandably, employers are unenthusiastic about the prospect of restrictions on the pool of possible workers.”
The second common myth about migrant workers is that their presence puts a downward pressure on wages. Put in less economic terms, the idea is that more migrant workers mean more candidates for a single job, thus increasing competition and giving the employer more power to set lower wages.
Not so. Although the MAC’s data finds that migrants from the “older” EEA countries earn on average 13% more than their British-born colleagues, and that migrants from post-2004 EEA countries earn on average 27% less than British-born workers, the differences are almost non-existent when adjusted for age and occupation. Overall, then, the MAC concludes that “migrants [have] little or no impact on average wages, but increased wages at the top of the UK wage distribution and slightly lowered wages at the bottom of the distribution.” The MAC points out that real wages in the UK have decreased lately – “the worst decade according to some estimates for over 200 years” – but this is due to the financial crisis, not to migration. In addition, several evidence submissions suggest that some EEA migrants’ lower wages stem from abusive employment practices, facilitated by weak enforcement by public authorities.
What lies ahead: a mess of uncertainty
The MAC’s tone in the report is deliberately restrained, one might say ostensibly neutral. Yet one word pops up several times: fear. Employers (and to some extent local authorities) are fearful about what lies ahead. For all its measured cautiousness, the report indicates that restrictions on freedom of movement after Brexit will leave many employers in serious difficulty.
From the evidence gathered, the MAC reports that most employers don’t have a contingency plan. When they do, it is impossible to know whether it’s a good one – precisely because no one knows what to expect, either from the Brexit negotiations, or from the government’s future whims over immigration. As the MAC puts it: “it is very hard to plan when there is considerable uncertainty about the future (including, but not confined to, the future migration system).”
The MAC does not (yet) offer a conclusive take on what might happen to the UK labour market after leaving the EU. It simply notes that training British-born workers to take up jobs currently reliant on EEA citizens would require time and significant government intervention; that many employers would be unable to raise wages enough to be more attractive; and that, notwithstanding Jacob Rees-Mogg’s fantasies, replacing migrant workers with robots is a pipe dream. Less than 5% of UK companies have the kind of capital required to invest in automation, and in any case, “investments are hard to make when the future is so uncertain.”
So here we are: one of the MAC’s main interim conclusions is that businesses are heavily impacted by uncertainty over post-Brexit immigration, yet the government is waiting for the MAC’s final report, due this autumn, before it provides any clarity over its immigration policy vision (or at least, using this impending report as an excuse).
We need to keep pushing for this absurdity to be resolved, and not just for businesses’ peace of mind: much more than “lower output growth,” it is people’s lives and futures that are being held in jeopardy.