UK: Migrant workers don’t undercut wages

LABOUR RESEARCH DEPARTMENT
Published weekly by LRD Publications Ltd, 78 Blackfriars Road, London SE1 8HF. 020 7928 3649
http://www.lrd.org.uk

The populist impression given by groups on the right of the political spectrum (underlined by newspapers, such as the DailyMail and DailyExpress, certain academics and the pressure group Migration Watch) that migration is undercutting the wages of workers already in the UK is wrong, according to a recent study published by the left-of-centre think-tank, the Institute for Public Policy Research (IPPR).

Its analysis of migration, jobs and pay data in the period between 2001 and 2007 found that a one percentage point increase in the proportion of migrants working in the UK would only “reduce wages by around 0.3%”. Even the large-scale and rapid migration from the east and central European countries that joined the European Union in 2004 “has had no impact on employment levels and only a marginal effect on wages”, said the institute’s working paper.

The IPPR argued that raising the school leaving age would have a much greater impact on wages than increases in migration. “The estimated effect of leaving school aged between 17 and 19, compared with leaving school at the minimum leaving age of 16, is to increase wages by around 10% — an effect which is around 35 times larger than the effect of a one percentage point increase in the migrant share of the population,” said the institute.

Recent published official figures showed that the number of east and central Europeans registering to work in the UK had fallen to the lowest level since the so-called A8 countries joined the EU five years ago.

But the institute is concerned that “with the sharp rise in unemployment as a result of the UK economy going into recession, the claim that migrants ‘take’ jobs from local people or drive down wages may take a stronger hold on the popular imagination”. It said: “Recent protests at power stations under the slogan ‘British jobs for British workers’ give a flavour of how the public debate may become even more heated and contentious in the future.”

Jim Finch, head of migration at the IPPR, said: “As recession sets in we are likely to hear people blaming workers from the EU or other countries for unemployment or low wages, but the think-tank’s study exposes these claims as untrue.

“It would be very sad and unfair if people started blaming migrants for the recession. In fact, migrants have made a huge contribution to our economy in recent years. We will need them in these difficult times, and they will also help us when the economy eventually picks up.”

From Institute for Public Policy Research:

The Economic Impacts of Migration on the UK Labour Market
ISBN:
Author: Howard Reed and Maria Latorre
Contributors:
Price: Free
Publication Date: 26 February 2009

The impact of migration on the UK labour market has become a contentious issue in public and political debate, with critics suggesting that immigration reduces wages or employment for the UKborn population. This argument has become particularly prominent since the arrival of large numbers of migrants from Central and Eastern Europe since 2004.

This paper attempts to cut through the distortions and hyperbole of recent debates. We provide a balanced and informed assessment of the best existing evidence on the effects of migration on the labour market.

The effects of migration in both the short and long run are too complex for economic theory to deliver exact predictions about its impacts on employment and wages. However, the best previous evidence suggests that the overall effects of migration on wages are either insignificantly different from zero, or slightly positive. The evidence base on the effects of migration on employment in the UK, though relatively thin, suggests that the effects are not significantly different from zero. All effects noted are very small.

Link to report at Public Policy Research

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  1. […] uk-migrant-workers-don’t-undercut-wages By amandla UK: Migrant workers don’t undercut wages « SWOP-LV NEWS […]


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