Cameron’s migrant benefit move is even worse than you think

The latest restrictions on migrants claiming benefits won't only harm migrant workers but also Britons.

The latest restrictions on migrants claiming benefits won’t only harm migrant workers but also Britons

The lack of any compelling evidence to support the government’s latest move to limit unemployment benefits for EU migrants has been widely reported.

It’s a well-rehearsed line among progressives that EU migrants make a net contribution to the UK economy and that they are less likely to claim benefits than British citizens. There is also no evidence that the benefit system acts as a ‘magnetic pull’.

Across the political spectrum, commentators have dismissed this move as a cynical political ploy to appeal to voters tempted by UKIP, backed up by the tasteless photo opportunity inside the home of an illegal immigrant after a raid. The Office for Budget Responsibility has distanced itself from the government’s claim that the change will save £500m over five years.

However, the damage doesn’t stop with dogwhistle politics. Unfortunately, this policy, the latest in series of measures to limit migrant benefits, will harm not only migrant workers and job-seekers but also Britons.

The government’s plan is to cut the amount of time EU migrants who have not made national insurance contributions can claim Jobseeker’s Allowance from six months to three months. Anthony Reuben’s analysis suggests the total number affected cannot be more than 10,000 people (even this is very charitable, assuming 0 per cent of EU migrant JSA claimants have ever worked in the UK or gained British citizenship).

However if these reforms do have any significant impact, it will be to place immigrants in an even weaker bargaining position vis-à-vis employers and potential employers compared to British workers.

It’s an economic fact that unemployment benefits strengthen the position of workers and potential workers in negotiations with employers. If you know you and your family will become homeless if you lose your job, you are more likely to accept a pay cut. The less bad the prospect of losing your job is (a combination of personal savings, external support and the ease of finding another job), the harder you can bargain.

These reforms further entrench a two-track system, where migrants will have a greater incentive to accept an employer’s terms, lowering the market price for labour.

Employers will have an incentive to hire migrant workers ahead of British workers, because they know migrants are less likely to put up a fight if they decide to cut hours or pay.

Already, we know that immigrants are less likely to be members of trade unions and that enforcement of the minimum wage has been an issue with migrant workers. These moves tip the scales even further in favour of employers.

British and non-British workers alike will suffer the consequences of lower wages and worse conditions. Migrant workers will suffer the consequences if they lose their job and Britons will find it harder to get a job in the first place.

Cameron says this will ‘put Britain first‘ – first in line for the dole.

The impact is likely to be minor, but in tackling the non-problem of benefit tourism Cameron is actually worsening the impact of immigration on low paid British workers.

Charlie Cadywould is currently completing an MSc in Public Policy at UCL focusing on labour markets and regulation

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13 Responses to “Cameron’s migrant benefit move is even worse than you think”

  1. Peter Martin

    The statistics clearly show that migrants, whether from the EU, or elsewhere are much more likely to be in the UK genuinely looking for work than for any other reason. If they can’t actually find any straight away it would seem petty minded to deny them unemployment benefits.

    But, is there more to consider than just benefits. The UK economy is in a bad way, but it is nowhere near as bad as in large parts of the Eurozone. If the EZ was in good shape, then it would be good for everyone to be able to move freely to find work. So, just as it isn’t desirable to allow free movement of labour between Africa and the UK, neither is it desirable to allow that from the EZ at present.

    The UK economy needs to improve and create many more new jobs. Let’s assume we have a Labour government, and further assume that an improved economy will create those new jobs. Who are UK employers likely to recruit? UK residents asking for a living wage, or Eurozone refugees happy to take minimum wages?

    The UK can solve its own unemployment problem, but, sadly, it can’t solve the Eurozone’s problem too. It only makes sense to allow free movement of labour between similar economies. We’d actually be helping workers in the EZ by demonstrating to the EU just how sensible fiscally expansionary economics can reduce levels of unemployment to sensible levels. That is just not possible with borders as open as they are at present.

  2. Liam Fairley

    Typical neo-liberal pro immigration article, focussing exclusively on economic factors when most working class people are more concerned about the social/cultural aspects of mass immigration. Step out of your academic bubble for a moment Mr Cadywould and you might realise this.

  3. Guest

    No, you wrote a post not an article. Keep talking about how your hate of immigrants is the important thing, and how you’re “concerned” about seeing a black face from time to time.

    Same old, same old. You don’t care for the British workers, the economics…

  4. Guest

    So we’d only have movement from Italy and Greece? That’s where we are.

    You keep chanting the same old disprove – by studies – lies about wages, as you simply try and pull our of the four freedoms. You are indeed petty minded, Tory, and your denial of the economic disaster we’re in is pitiful.

    You know we need more jobs, yet have called for far less. You refuse to see a living wage solves many issues. of course, as you make fake claims about the UK “solving” anything as our wages and productivity spiral downwards – we’re going to need food aid unless this gets solved.

    It’d help the EZ if we didn’t drag them down, yes, but it would not help the British 99%.

  5. Liam Fairley

    Ladies and gentlemen, the intolerant, fanatical loony left! Dare to disagree with the party line, to think for yourself, and be castigated as a waaacist. You’re not worth the hassle, comrade.

  6. Guest

    “the intolerant, fanatical loony left! ”

    No, you’re not a left winger. Thanks for showing your poor grasp of English, totalitarianism and bigotry and racism.

    Keep spewing that anti-British propaganda from your far right, as you try desperately to silence other voices, as you push your PC collectivism.

  7. Peter Martin

    Have you posted this here by mistake? Was this intended for someone calling for fewer jobs to be created?

  8. Guest

    Yes, it was intended for you, who is calling for far, far fewer Jobs in an Isolated Kingdom.

    No, it’s no mistake you’re calling for this.

  9. Peter Martin

    It’s you’re mistake, or naivety, to think the EU creates jobs. When Greece has 28% unemployment, Spain has 26% and the EU average is 12% you cannot possibly be serious. This is just about the rate of unemployment that Thatcher inflicted at her worst in 1982.

    Unemployment in the UK is too high at around 7% but at least that’s in single figures! If the UK was more committed to the EU than it is, and we’d adopted the Euro, then we’d have 20%+ levels of unemployment too. The Euro is set up to suit the big net exporters like Germany. Not every country can be a net exporter!

    So, go away, Mr Anonymous Guest, and look up some figures to back up your argument!

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  11. Guest

    Right right, jobs are not created by trade. I can’t be serious, I see.

    Our employment situation is terrible. You’re counting massive numbers of part-time and zero-hour jobs as full-time, and not counting people on workfare. You’re ignoring the death spiral of falling wages and productivity – we’re worse off than Spain.

    You then bring up another issue, the Euro, to try and justify yourself. No, the problem is and remains austerity.

    Yes, of course you want me to be silenced and to believe your crooked figures which say that closing the borders is magically a good option.

  12. Peter Martin

    I told you to go away and get some figures. That way you can make your opinions fit the facts and not vice versa.

    Yes, unemployment in the UK is bad. The UK has a seasonally adjusted unemployment rate of 7.3% according to ILO figures.

    Spain has a rate of 26.7% – from the same source. So, by no stretch of any sane person’s imagination can the UK be “worse off”.

    Google{ILO where is the unemployment rate the highest}

  13. David

    Realise it’s the social aspects or not, the fact remains that the economic case is pressing. We have had a low birth rate for many years, coupled with longer retirements due to extended lifespans. We risk a demographic bubble very soon where there will be too few people of working age to support the things we value. NHS, public safety nets in difficult times and a whole host of other things. Clearly we could massively increase tax on the fewer working, or cut support for the elderly, raise the retirement age dramatically, start popping out more kids and raising them in hot houses so they reach working age sooner. Or, we could just let more people in.

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