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TUC submission to MAC review of migrant employment in low-skilled work

Issue date

The TUC has submitted evidence to the Migration Advisory Committee's review of migrant employment in low-skilled work where we argue that migrant workers in low-skill occupations make an important contribution to the economy but lack of rights at work has meant they are often exploited, as are local people in low-skill jobs. The submission also raises concern about the rapid expansion of low-skilled employment over higher-skilled employment which denies workers the ability to utilise existing skills or opportunities after training.  The TUC calls on the government to provide better labour market protection to ensure decent conditions for workers in low-skilled work are provided and language support for migrants and routes to have their skills recognised.  The TUC calls on employers to provide decent pay and conditions to better reward employment in low-skill occupations as well as creating more work in higher-skilled occupations and skills training for workers to allow them access to these occupations.

TUC submission to MAC review of migrant employment in low-skilled work

Introduction

The TUC welcomes this call for evidence as it is useful to examine the characteristics of the UK labour market and the reasons why migrant workers might occupy certain positions within it.  The TUC believes migrant workers in low-skill occupations make an important contribution to the economy and to the UK’s service sector. Our main concern about low-skill employment is the lack labour market protection found in low skilled occupations which encourages exploitation and undercutting, and the rapid expansion of low-skilled employment over higher-skilled employment which denies workers the ability to utilise existing skills or opportunities after training.  The TUC calls on the government to provide better labour market protection to ensure decent conditions for workers in low-skilled work are provided and language support for migrants and routes to have their skills recognised.  The TUC also calls on employers to provide decent pay and conditions to better reward employment in low-skill occupations as well as creating more work in higher-skilled occupations and skills training for workers to allow them access to these occupations.

Answers to review questions

  1. Have migrants (EEA and non-EEA) doing low-skilled jobs had a social impact on the demand on health services, education, housing, social care and policing?

The TUC is not aware of any scientific study into the use of services by migrants only working in low-skilled occupations. An indication of their impact can be gleaned by examining use of services by recent EEA migrants from the accession ‘A8’ countries as we know that this group were predominantly concentrated in low-skill occupations, although this will only be a crude approximation of the use of services by low-paid migrants in general. It should be noted that this group constituted only a small proportion of the total number of recent migrants coming to the UK to work. The majority of recent migrants to the UK were from non-EEA countries, although they found work predominantly in higher skill, higher paying occupations[1].

Using this measure, however, we can see that this group’s consumption of services is offset by their contribution to the economy.  A recent UCL study by Dustmann and Frattini reveals that recent immigrants from the EEA, the majority of whom were from accession countries, contributed 34% more to the economy than they consumed in services, or £22.1 billion extra to the economy.[2]

A study by Bell and Fasani (2010) found no significant relationship between the impact of A8 migrants and crime[3]   Meanwhile, a study by the NIESR found that A8 migrants had not had a negative impact on housing – they comprise just 1% of those in social housing.[4]  Research by Dustmann, Frattini and Halls in 2010 found that A8 migrants with at least one year of residence in the UK (and who were therefore legally eligible for social housing) were 58 per cent less likely to live in social housing than natives.[5] Nickell suggests that even in a zero net-migration scenario, there would be a need for at least 270,000 new homes per annum to stabilise the house price to income ratio. Therefore, he concludes that the UK housing shortage would continue to worsen even with zero net-migration.[6]

The studies by NIESR (2013) and Dustmann (2013) also show that A8 migrants use less health services than UK citizens and that A8 migrants often prefer to return home for healthcare. This was supported by recent research conducted by the European Commission which did not find any evidence of ‘welfare tourism’ amongst workers from A8 or other EEA countries in the UK.[7]

  1. Have migrants (EEA and non-EEA) doing low-skilled jobs had a social impact on the delivery of health services, education, housing, social care and policing? 

Migrants from EEA and non-EEA countries who work in Level 1 and 2 occupations play an important role in the delivery of health, education, public and social services.  The Frontier Economics report that MAC commissioned makes clear that recent EEA migrants are more likely to work in these jobs.[8]  A comprehensive study by Lemos and Portes indicated that migrant workers have not substituted for native workers in these roles[9].

Migrants can thus be seen to add to the capacity of public services as well as to the economy more broadly. The TUC believes, as argued in its 2007 report on The Economics of Migration, that as the country is benefitting from the contribution of migrant workers, it also has a duty to make sure that they are adequately paid and treated in their work. Unfortunately, as discussed in the next section, poor conditions and pay have been endemic in the experience of migrants in low-skilled jobs.

3. Are there factors that impact on someone’s likelihood to take up low-skilled work which affect UK-born and migrant workers differently?  

The TUC believes migrants, particularly from lower income EU accession countries, are often likely to take up low-skilled work, partly due to the nature of the labour market where we have seen an expansion in low skilled occupations but also due to the labour market profile of migrants. It is important to note that the skill levels of these workers and the occupations they take are not necessarily linked.  We know that almost half the A8 workers to arrive in the UK were educated to degree level or higher, yet the majority of A8 workers who arrived after labour market restrictions were lifted in 2004 were employed in poorly paid, low-skill parts of the economy[10]. This was due to lack of recognition of qualifications, language barriers, and the ‘network effect’ - new migrants learned about job opportunities from associates already employed in the UK, rather than more formal avenues more likely to advertise jobs at their skill level[11].

A8 workers are also six times more likely to be recruited through an employment agency than the general UK workforce where the type of work they do is more likely to be classified as ‘low skill’ than an equivalent job on a full time contract, as the TUC’s Commission on Vulnerable Employment showed[12].   Some agency work required considerable skill, such as construction or health care work, yet A8 workers were not valued accordingly. 

Bogus self employment has also been a significant feature of employment of Bulgarian and Romanian workers in low-skill occupations - owing to restrictions on their access to the labour market imposed by transitional measures.  This places workers in a very vulnerable position with no ability to claim the National Minimum Wage or claim many employment rights.  Bogus self-employment has particularly been reported in the construction industry[13] and in cleaning jobs, for example in the transport sector.[14]

The TUC has demonstrated through recent research[15], however, that precarious agency contracts associated with low-skill work are by no means only suffered by migrant workers.   An increasing number of UK workers are having to work on ‘zero hours’ and agency contracts associated with low pay and unequal treatment.

The TUC believes that the principal concern of the government in low-skilled occupations should be to provide better protections to make sure employers cannot use agency or migrant workers to undercut other sections of the workforce.  It is worrying that the Government has recently reduced the scope of the Gangmasters Licensing Authority, removing the forestry sectors and vulnerable workers, including cleaners, volunteers and some apprentices from its remit. The TUC is also seriously concerned at recent decisions to weaken the inspection system in the GLA. Rather than increase the ability of bad employers to exploit workers, the TUC calls on the government to extend the GLA to high-risk sectors where many occupations classified as low skilled can be found, such as construction, hospitality and social care.  There is also a need to better resource the enforcement of the National Minimum Wage to make sure that workers in low skilled occupations have decent standards of work and pay. 

Trade unions provide important protection for migrant workers to be covered by collective agreements which guarantee decent standards, however, employment agencies have been found to exploit migrant workers’ lack of information on their right to join a trade union and some intimidate workers who try to join a union.[16]  Responsible employers must provide workers with information on their rights and work with trade unions to make sure workers are protected, and extending the scope and coverage of collective bargaining at a sectoral level could play a major role in addressing the problems of exploitation and undercutting.

The government should also offer more support to migrant workers to allow them to utilise their qualifications and skills so they do not have to work below their skill level.  Trade unions have been active in supporting migrants to have a voice in the workplace which has been important in enabling workers to gain recognition for their skills. The TUC calls on employers to support this work and adequately reward workers for their skills.

However, migrants and non-migrants will only be able to effectively use their skills in the labour market if there are jobs present at their skill level. Recent TUC analysis, however, found that close to 80% of net job creation since 2010 has been in low paid sectors of the economy such as retail, waitressing and residential care.[17]  There is a need for increased job creation in higher skilled occupations so that those with skills can utilise them properly. This must be accompanied by investment by employers in training supported by an active industrial strategy by government so more workers can access higher skilled, better paid occupations.[1]

 

[1] Migration Observatory, Briefing: Migrants in the UK Labour Market: an Overview  http://www.migrationobservatory.ox.ac.uk/sites/files/migobs/Briefing%20-%20Migrants%20in%20the%20UK%20Labour%20Market_0.pdf

[3] Bell, B./Machin, S. and Fasani, F. (2010): Crime and Immigration: evidence from large immigrant waves (Centre for Economic Performance, London School Economics), CEP discussion No. 984.

[5] Dustmann, C., Frattini, T. and Halls, C. 2010. Assessing the fiscal costs and benefits of EU-8 migration to the UK. Fiscal Studies, vol. 31, no. 1, pp. 1-41

[6] See Nickell, S. “Notes on ‘Too Many People in Britain? Immigration and the Housing Problem’” LSE Public Lecture, June 2011. Available at: http://www.nuffield.ox.ac.uk/general/members/nickell.aspx and Nickell, S. “The British Housing Market: What Has Been Happening?” Oxnomics4 (2009): 10–18

[9] Lemos, S. and Portes, J. (2008). The impact of migration from the new European Union Member States on native work­ers (Department for Work and Pensions, June 2008).

[10] See TUC, The Economics of Migration (2007)

[11] Hardy, J and Clark, N, Free Movement in the EU: The Case of Great Britain (2010); Friedrich Ebert Stiftung; http://library.fes.de/pdf-files/id/ipa/08041.pdf

[12] TUC, Commission on Vulnerable Employment; http://www.vulnerableworkers.org.uk/cove-report/full-report/

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