Figures do not prove EU migrants are taking new UK jobs or driving down pay
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Version 0 of 1. Coming three months after a general election in which an avowed anti-migrant party won 3.8m votes, there was inevitably going to be a debate about employment figures showing that EU nationals accounted for about 55% of the net jobs growth in Britain over the past year. The figures for the three months to June will add fuel to Ukip’s fire. They show the weakening labour market has hit UK-born workers hardest. The number of them employed fell by 170,000. By contrast, the employment of people born abroad but within the EU rose by 85,000, and other foreign workers by 30,000. The impact of migrant workers on salaries is another burning issue. Annual wage growth at this point in the recovery should be between 4% and 4.5%, but the Office for National Statistics (ONS) said it was stuck at 2.8% during the last quarter. Could the influx of EU nationals, from a population of about 750,000 in 2006 to 2 million today, be limiting everyone’s pay bargaining power? Let’s take the employment issue first. The ONS produces figures for a net loss or gain. So if the figures for migration tally with those for a net increase in jobs, one might surmise that migrants are taking all the new jobs. But the figure for net jobs is not the same as new jobs, which is generally a far larger number. Related: Rise in UK unemployment fuels labour market jitters In an economy as large and sophisticated as the UK’s, there is always a huge number of jobs being destroyed and created during any given period. The ONS figures for net employment tell us the total loss or gain from this process, not who is getting the new jobs being offered by employers. And even if many of the new jobs are going to Spanish engineers, Polish construction workers and Greek waiters, those UK nationals who are out of work should blame decades of under-investment that has led to them being hemmed in by a lack of aspiration on one side and a lack of education and training opportunities on the other. Looking back over the past year, a breakdown of the figures shows there has been an 85,000 reduction in the number of self-employed people. The number of women in part-time work has also declined. Some of these may have gone on the unemployment register, others will have switched to full-time employment. Only a more in-depth study can tell us what has happened. What about the impact on wages? It is not hard to find anecdotal evidence of foreign workers accepting a professional job on a salary that a British national would only agree to take with a gun at their back, having slogged for five or seven years to qualify for it. Low-skilled workers often make the same complaint. But research by the labour market economist David Blanchflower shows only a marginal effect on wages at the bottom of the income scale. On the other hand, immigration will have many positive effects in keeping struggling businesses from going bankrupt or helping thriving ones win new contracts, as much as it has depressed wages in some parts of the economy. As John Philpott, the director of JobsEconomist, has argued, there are many reasons for slow wage growth compared to previous recoveries. He cites the collapse of trade union power, a reduction in workers’ rights, the tougher welfare regime and low inflation, which allows employers to keep wage rises to a minimum and delay investments that raise productivity. All these are domestic issues that put workers in a much weaker position than they faced during the recovery of the early 1990s. |