What is the truth on hiring foreign staff?

Politicians, social commentators and the media often stereotype
asylum-seekers and refugees as benefit scroungers.  But asylum-seekers represent a potential untapped pool of talent
for UK organisations which are suffering skills shortages.  So what are the facts?  Recent research by the Home Office
highlights the benefits of employing immigrants and suggests that the
Government should do more to harness their skills.  Compiled by Karen Higginbottom

A Home Office report released in January shows that there are economic
benefits in employing non-British born workers. The report, called Migration:
Economic and Social Analysis, claims that immigrants contribute more in taxes
and National Insurance than they consume in benefits and other public services.

It claims, "We estimate that the foreign-born population contributes
around 10 per cent more to Government revenues than they receive in Government
expenditure, equivalent to perhaps £2.6bn in 1998-1999.

"Put another way, if there were no foreign-born people in the UK, taxes
would have to rise or expenditure would have to be cut back by £2.6bn (the
equivalent of about a penny on the basic rate of income tax)."

Migrants have met with mixed fortunes in the UK labour market. Some have
become very successful, claims the report, but others find themselves
unemployed or inactive.

Migrants have higher average incomes than natives but this masks the
polarisation of experience, with migrants over-represented at the top of the
income distribution scale, but also highly concentrated at the lower end.

Key correlations of success include method of entry to the UK (and the
requirements and restrictions placed upon them), education and English language
fluency, which interact in complex ways.

Important barriers to migrant labour market success are lack of general
knowledge about the UK labour market, restrictions on access to employment, and
lack of recognition of qualifications and/or access to certification/re-certification.

Migration: Economic and Social Analysis also uses research carried out by
Shields and Wheatley Price in 1999, which indicates that the employment rate
for ethnic minority migrants is 20 to 25 percentage points higher when they are
fluent in English.

While migrants are more likely to be in receipt of unemployment and housing
benefits, they are less likely to be receiving sickness or disability benefits,
claims the report. To some extent, the relative use of benefits reflects
different eligibility rules for different types of migrants, particularly
recent arrivals.

Research on the educational qualifications of refugees in the UK is scant.
The most recent statistics of the skills profile of refugees date back to 1995
and reveal that nearly a third of those interviewed had a degree, postgraduate
qualification or professional qualification.

In a survey of 263 people, nearly half of those interviewed had further
education backgrounds and more than 60 per cent of those who had held jobs in
their former countries had worked as professionals, managers or business
people. Nearly half took some educational course in the UK, often to supplement
qualifications from their home countries which are not recognised here.

More than half of those with professional qualifications gained in the UK
were still unemployed, showing a waste of skills and resources that could be of
benefit to the economy of the UK.

Where migrants settle is likely to be a complex decision, and is one we know
relatively little about. Migrants are highly concentrated – increasingly so –
in London, reflecting the size of the capital’s labour market and its
well-documented shortfall in workers.

In London, migrants are concentrated in areas of both relative prosperity
and relative deprivation (and high unemployment levels).

Elsewhere, many migrants tend to gravitate to areas where housing costs are
relatively cheap (and housing is available), and where there are already others
from their home country. Thus they tend to be concentrated in cities and in
areas of relative deprivation in those cities.

There is little evidence that native workers are harmed by migration, claims
the report.

There is considerable support for the view that migrants create new
businesses and jobs and fill labour market gaps, improving productivity and
reducing inflationary pressures. Continued skills shortages in some areas and
sectors suggests that legal migration is, at present, insufficient to meet
demand across a range of skill levels.

Migration: Economic and Social Analysis claims that the entry control system
is not sufficiently joined up with other areas of government policy, and
post-entry policies do not sufficiently address social and economic objectives.

There are a number of areas where policy could enhance migrants’ economic
and social contribution, in line with the Government’s overall objectives.

Migration policy should be seen as a continuum, running from entry through
to settlement and to social and economic integration.

The report concedes that there is a need for more research in this area –
indeed, it is striking how little research on migration there has been in the

Migration: Economic and Social Analysis was written by a team of researchers
from the Home Office’s economics and resource analysis unit


Comments are closed.