Blooming foreigners
Are foreign workers a bane or a blessing?It’s hardly a new phenomenon, and yet it’s one of the hottest political topics of recent years. People have been coming to the UK from around the globe for centuries; to find work, to escape hardship, for a change of scenery, or perhaps to enjoy the cuisine. (You never know.)
But now, thanks to the worrying popularity of a certain political party, a faintly hysterical corner of the media, and an austerity-induced, heightened sensitivity among some pockets of society, immigration is firmly at the top of the political agenda.
At a time when there are arguably bigger political issues at stake, it looks like immigration is the issue on which the forthcoming general election will be either won or lost. In the likely event the election ends with a hung parliament, UKIP could play a decisive role in a future coalition – which explains immigration’s prevalence in any political dialogue.
And a key aspect of the immigration ‘debate’ (you know, the one that we’re often told we’re not allowed to have, despite it dominating mainstream media and everyday political discussions) is overseas labour.
It’s a topic on which it seems there’s no middle ground. On one side there’s the argument that as an EU member state and a wealthy western country, we have a legal and ethical obligation to allow people from overseas to work here.
On the other side, there are episodes like the ‘Is there nobody left in Britain who can make a sandwich?’ story, in which a UK sandwich firm was recruiting workers from Hungary. In itself, this is clearly not much of a news item, but it’s catnip for the UKIP-inclined, many of whom are avid Daily Mail readers.
For employers, as well as the wider public, the absence of a grown-up conversation doesn’t help. While in some cases employing overseas workers might be precisely the right thing to do, the recurring rhetoric deters many companies from considering it as an option.
An overstated ‘problem’
The narratives on which the debate currently hinges are of varying credibility. The one that perhaps wields most weight is simply that foreign workers are detrimental to the economy and job market.
Steve Toft, director at Crucible Consulting and the man behind the Flip Chart Fairy Tales blog, says both sides are probably overreacting on this point. He says: “Most studies show that the impact is fairly small either way. It has neither upsides nor downsides on the scale its supporters and opponents make out,” he says.
“The effect on wages is also small, though there might be some short-term impact on lower paid workers already here, many of whom are from previous waves of migrants.” Toft adds that, according to the Migration Advisory Committee, “effect on per capita incomes has been either marginal or zero”.
John Philpott, former chief economic adviser at the CIPD and director of The Jobs Economist, agrees. “The consensus view is that foreign workers have a positive but relatively small impact on the overall economy,” he says. “While the employment of migrants, especially skilled migrants, increases GDP, migrants also increase the total population – which dampens the effect of this on GDP per head, in other words the average standard of living”.
Perhaps it’s unsurprising that a party led by a pint-quaffing fact evader, ‘speaking out for the common man’ despite being a former public schoolboy with a City background, is selective with the information it uses to further its cause.
One thing UKIP and its supporters are likely to play down is that there could be benefits to be gained from workers entering the UK. But, as Philpott points out, there are positives to be found. “Since migrants have a high propensity to work and are generally young, on aggregate they have a positive impact on the public finances – for example, paying more in tax than they consume on benefits,” he says.
“And, by filling job vacancies they also help contain inflationary pay pressure that might otherwise slow the pace of economic growth.”
Toft’s opinion echoes this, but he reiterates his view that the impact either way is small. He says: “Individual companies have benefited because it’s easier to get skilled labour. Some people may have lost out on jobs or pay increases – especially those in lower-skilled roles, but while there are inevitably some winners and losers the overall effect nets out to zero.”
Don’t we need them?
What about those industries that depend on foreign workers in order to function? Philpott cites the health, retail and hospitality sectors as prime examples, while Toft points out that much of the Government’s supposed ‘jobs miracle’ was accounted for by migrants – and a significant proportion of jobs growth was driven by recent migration into London.
He adds: “Opponents of migration will argue that those jobs should have gone to British people but it’s likely that, without the immigrants, some of those new jobs wouldn’t have existed in the first place.”
Philpott agrees. As he points out: “Migrant workers have contributed to the rise in UK employment since the end of the recession, mainly by filling jobs that would otherwise have remained unfilled.”
So, there are tangible benefits to be derived. But perhaps it’s unsurprising that we hear little about these, since most parties involved in the debate seem happy for the narrative to be dominated by UKIP and its light-on-fact approach focusing purely on drawbacks, whether real or imagined.
Missing the point
But even if we consider the scale of the issue and the respective pros and cons – isn’t this a moot point, given we’re bound to allow free movement as an EU member state – and will continue to be so until our membership terms are renegotiated (if that ever happens)?
In Philpott’s view, public policy makers are caught between concern about immigration and the overall economic benefit of migration. “The dilemma is confounded by the fact that the positives and negatives are not shared equally,” he says.
“Employers obviously benefit – as do consumers of the products and services migrant labour helps supply – as well as the migrants themselves. However, less skilled, British-born people may find that large-scale unskilled immigration reduces their ability to obtain jobs that pay more than the minimum wage. The latter problem, as well as geographical concentration of migrants which can place pressure on public services in some areas, probably explains much of the angst on this issue and hence its political salience.”
Philpott suggests that instead of focusing on migration as a ‘problem’, greater attention should instead be concentrated on the difficulties faced by British-born people in the lowest socio-economic groups, and in particular their ability to access better-paying jobs.
And perhaps this is a point that many voters – and newspaper readers – are missing. It makes headlines, and is an easy addition to a manifesto. But it also diverts attention away from the meaningful, long-term actions policymakers could take in order to stabilise the labour market.
While there are many things that could be done to improve the fortunes of domestic jobseekers, instead of acting on them is it simply easier to keep the spotlight on the bogeyman from overseas?
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