Wages have not risen in the UK as a result of the move to a more controlled immigration system.
A new report by the Migration Observatory and UK In A Changing Europe (UKICE) found that although some employers had tried to attract workers with better pay and conditions, there was no evidence that new immigration controls had led to higher pay.
The sector that saw the largest decline in the EU labour force in the two years to June 2021 – hospitality – had seen one of the smallest increases in pay since before the pandemic, found researchers. This led the Migration Advisory Committee (an independent public body) to conclude that reduced EU migration has so far failed to boost pay in the affected sectors.
The report’s authors suggested that rather than increasing wages to attract UK workers, employers were more likely to respond to lower labour supply in low-wage jobs by reducing the number of people they hire. The outcome of this was greater automation, where feasible, or simply slower growth in labour-intensive sectors.
Ranging over the length and breadth of immigration issues, the Immigration After Brexit report points out that the flagship feature of the UK’s immigration system, the “points-based system”, actually bore little resemblance to Australia’s labour migration policy. It stated: “In fact, the points in the new system are largely cosmetic. Workers are selected in effectively the same way as non-EU citizens were selected before Brexit, ie based on a job offer from a qualifying employer for a qualifying position.”
Workers must have a job offer from an employer with a sponsor licence, earning at least £25,600 in most cases (jobs on the shortage occupation list require a salary of at least £20,480). Jobs not classified as skilled – meaning RQF3 (roughly A-levels) or above – are usually ineligible, although the government made an exception for entry-level care workers in February 2022.
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This had made the post-Brexit immigration system more restrictive, costly, and less flexible for EU citizens, as it was supposed to.
However, for non-EU citizens, the new system was more liberal, the report stated, given that the salary requirement was just over £4,000 lower than it was before Brexit. Additionally, middle-skilled jobs such as skilled trades are newly eligible for sponsored work visas, and there are more opportunities for graduates to get unsponsored work visas.
The number of EU citizens coming to the UK on skilled worker visas was now very low. Researchers suggest that employers in sectors employing high shares of EU citizens, such as construction, are unfamiliar with the sponsorship system because they have only just been made eligible to use it. Greater familiarity with the system over time could lead to greater takeup in middle-skilled jobs. It was also possible that some of those granted status under the EU Settlement Scheme, but who had left the country, might return, the study said.
The huge rise in immigration, recorded in ONS figures late last year, was more to do with exceptional global events than bearing any significance in relation to long-term trends. Much of the influx was down to Russia’s invasion of Ukraine and the arrival of thousands of people from Hong Kong using the new visa route for British nationals (Overseas).
The biggest shakeup in UK immigration policy for half a century coincides with a sustained shift in public attitudes in a more positive direction” – Jonathan Portes, UKICE
According to the report, there was no reason to believe net migration would continue at current rates. It stated: “Even if immigration levels remained the same as in 2022 indefinitely, net migration would fall in the coming years. This is because many migrants only remain for a few years, pushing up emigration (and thus subtracting from net migration) when they leave. This is especially relevant for international students, whose departure rates are high. At the same time, immigration levels may fall due to a smaller number of people arriving from Ukraine and perhaps Hong Kong.”
Future migration patterns were likely to depend to some degree on whether current demand for international study and skilled work in the UK persisted, said the study. Student visa grants were showing no sign of falling back from
their post-Covid bounce, while a weaker labour market might reduce demand for skilled work visas in the private sector.
Given that the greatest single user of work visas was the health and care sector, future demand for overseas workers in these roles would depend partly on the government’s ability to expand the domestic training pipeline or improve retention for health roles, and improve pay and conditions in social care. As of early 2023, found the researchers, the government had not responded to the Migration Advisory Committee’s April 2022 report recommending higher pay to attract domestic workers into the care sector.
The government’s main message in its policy statement introducing the points-based system in February 2020 was that “employers will need to adjust” to more restrictive migration policies. “Ironically, it is where government bodies are the employer (or indirectly determine pay via public-sector contracts), that adjustment is proving difficult and reliance on skilled workers from abroad has increased the most,” said the authors.
A further interesting finding was that the public anxieties around immigration began to melt away around the time of the referendum. The proportion of people who felt migration to Britain should fall has declined, while the share favouring increases in migration had risen. “In 2022, for the first time in polling history, more people favoured maintaining, or even increasing, levels of migration than favoured reductions. This is particularly striking given the fact that the year to June 2022 also saw net migration levels hit record highs,” stated the authors.
Jonathan Portes, senior fellow at UKICE, added: “The biggest shakeup in UK immigration policy for half a century coincides with a sustained shift in public attitudes in a more positive direction, with a broad consensus that the system should meet the needs of the economy and labour market.”
The post-Brexit immigration system has given with one hand and taken with the other” – Madeleine Sumption, Migration Observatory
The study suggested this shift in attitudes was complex; it was certainly not that satisfaction with the new immigration policy had increased but maybe because people had become more likely to see migration as a solution to labour shortages and a driver of economic growth. One factor, supported by 2021 census data, was that demographic change was partly responsible with a growth in groups with more liberal attitudes.
There was a London-centric bias built in to contemporary immigration policy, the researchers found. So far, the government’s visas had had the effect of favouring high productivity service sectors such as finance, ICT, higher education and business services. These sectors were concentrated in the capital and so, far from levelling up this inherent bias could serve to exacerbate existing regional and spatial inequalities, found the study.
Madeleine Sumption, director of the Migration Observatory, pointed to the inequality of the post-Brexit immigration system, which had “given with one hand and taken with the other. While some low-wage sectors have faced labour shortages as they adjust to a world without free movement, others have seen a boom in recruitment.”
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