18 August 2016 | Herpreet Kaur Grewal
A significant fall in migration in the medium term will have little effect on native earnings, according to a think tank report.
But researchers from the Resolution Foundation say it will bring new labour market challenges that businesses must address.
The study states that the effect of reduced migration on specific industries and parts of the country could be significant – and facilities management could be one of the most affected sectors. “Elementary professions” such as cleaning, security and food manufacturing could be the most hard hit the report suggests.
The report authors suggest that “it is wrong to say that migration has had no effect on specific groups of natives’ wages and employment, [but] this effect has generally been small”. So, even a significant fall in migration in the medium term “will have little effect on native earnings”.
But the longer-term effects on industries like FM require more thought, they add.
Under a new immigration regime, it is possible that highly skilled or highly educated migrants would be prioritised. This might “significantly curtail low-skilled immigration, creating serious problems for sectors that rely on such labour” says the report.
It adds: “It is unlikely that native workers will totally fill the gap at current wage rates. Pay in these sectors averages £9.32 an hour, significantly below average native wages of £11.09. We know that lots of workers in these sectors are migrants from the EU ‘accession’ countries, whose average earnings are £8.33, £2.76 below that of natives. With employment at an all-time, high it is unlikely that there are large numbers of natives either looking for work that will be attracted to these sectors given the low-wages on offer.
Similarly these kind of wage rates are currently not sufficient to bring those not in the labour market into participation. It seems unlikely that the simple absence of migrants would be enough to change that situation.”
The report says industries would have to look into “significantly” changing their business models. In some sectors government should work with industry to encourage the “take-up of labour-saving technologies while in others better skill utilisation will be required”, says the report.
This could have the “wider benefit of stimulating productivity and wage rises, which in turn could attract more native workers who at present are unlikely to wish to work in these low-paying sectors”.
It adds that other studies suggest that some migrant-reliant sectors, such as food manufacturing, accommodation, and textile manufacturing, could see greater automation in the near future.
