ONS reveals impact of immigration on low-paid jobs and wages; how should Labour react?

New figures show the importance of Labour winning the argument about the impact of immigration on lower-paid jobs and wages, writes ippr's Matt Cavanagh.

By Matt Cavanagh, Associate Director, ippr

Today for the first time the ONS published figures confirming that immigration has had a significant effect at the lower end of the labour market over the last decade.

Just over 20% of workers in low-skill occupations were born outside the UK. This is more than double the proportion in 2002 – and a much steeper rise than at higher skill levels, as this ONS graph shows:

The overall number of low-skill jobs is broadly unchanged at around 3.2 million – but the number of UK-born workers in these jobs has fallen from 3.56m to 3.04m, while the number of non-UK-born workers has risen from 298,000 to 666,000.

How to deal with the impact of immigration at the lower end of the labour market is top of the agenda for both the Conservatives and Labour.

David Cameron set out his solution in a high-profile speech in April: he argued that if we reduce the supply of immigration, while at the same time making it harder to live on benefits, this will shift large numbers of people from welfare to work.

Ed Miliband’s argument was different: that if wages and conditions improve, the result will be simultaneously to reduce the demand for low-paid migrants, and to shift people from welfare to work – but by making work more attractive, rather than making living on benefits harder.

It is a healthy development that the Conservatives as well as Labour now accept that low skill immigration is a symptom of our real problems (welfare for the Tories, wage stagnation for Labour) rather than the cause. But the problem for Cameron’s argument is that he can’t really restrict the supply of low-skill immigration. Today’s figures confirm that most of the increase in non-UK-born workers in low-skill jobs over the last decade are Eastern Europeans.

Other figures out today confirm that immigration from Eastern Europe is rising again – 50,000 up from last year. Labour should seize the opportunity to flesh out its alternative argument, aimed at the demand for immigration not the supply – showing it is more realistic, as well as fairer, especially for the 3 million British nationals already in low-paid work.

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