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Professor Geraint Johnes
Professor of Economics at Lancaster University
T 020 7976 3516
Professor Geraint Johnes

Migration and the labour market

Authors: Professor Geraint Johnes

30 September 2014

The CIPD has today (30 September 2014) published a landmark study on the growth of migration to the UK from other parts of the EU. Migration is an emotive subject, and the report is likely to attract widespread attention. Based as it is on significant new research, it should serve to enrich the evidence base upon which discussion takes place. It is therefore very welcome.

As a proportion of total employment, the number of non-UK born workers has risen steadily over time; now at around 15%, the percentage has doubled since the late 1990s. Employment of non-UK born workers from the accession countries of eastern Europe shows a step change after 2004, when unrestricted migration within the EU became possible for workers in these countries. These migrants have been disproportionately employed in low skill occupations - in sharp contrast to migrants from western Europe and those from outside the EU that are subject to visa regulations. Hence they tend to be disproportionately employed as cleaners, caretakers, catering assistants, and so on - typically jobs that are not directly customer facing and which do not demand strong communication skills. But migrants from the EU are also disproportionately employed as accountants and IT specialists. So the picture is considerably more nuanced than popular conceptions might suggest.

Many of the migrants from eastern Europe, in particular, are overqualified for the jobs that they are currently undertaking. Indeed, since 2007, most migrants from these countries who have degrees have been employed in low skill work. There would appear to be significant scope for increasing productivity within the UK economy simply by employing these migrants' skills to best advantage. It is important, however, to note that employers do not consider migrants generally to be working below capacity within their current jobs. Facilitating job mobility amongst well qualified migrants thus offers the promise of high returns.

Employers cite the main reasons for employing migrants to be availability, followed by their work ethic and the congruence of migrants' values with those of the employing organisations. Some 26% of employers claim to have found difficulties in finding UK born workers to fill unskilled or semi-skilled jobs, and 20% employ migrants because of the perception that they have a better work ethic than UK born workers. The attributes that employers particularly value amongst migrants include their teamworking skills, their orientation to customer service, their conformity to what the organisation wants, and their integrity.

While employers who employ migrant workers report a beneficial impact, those who do not employ migrants tend to report that they do not perceive a benefit. This suggests that there are few spillovers. In particular, migration does not appear to be benefitting employers by pushing down the general level of wages. Only 6% of employers claim that they would raise wages to fill posts were migrant workers not available.

Migration is not, in any large measure, displacing training. Employers who recruit migrant workers are more likely than other employers to be investing in training and apprenticeships. To some extent, this results from a scale effect - larger employers are more likely to do employ migrants and more likely to train.

There is a marked spatial difference in UK workers' attitudes to migrants - low skilled workers in London regard migrants more favourably than those outside the capital. This may be related to the high stock of migrants in London - a case of familiarity breeding acceptance rather than contempt.

Meanwhile, there is concern that migrants who take on low skill work are competing with UK domiciled school leavers. This serves to focus attention on the skills with which these school leavers are equipped. Over a third of 16 year old school leavers - and almost as many 17-18 year olds - are deemed to be poorly or very poorly prepared for the world of work. Equipping them better is clearly a prerequisite for enabling them to compete effectively and secure good jobs.

And this is the overall impression with which one is left after reading the report - migration is really a red herring. It is time for the debate to move on to this: how can we best equip young people born and raised in the UK so that they can compete effectively in the labour market - without a need for protectionism?