There is no evidence that migrants are under-cutting the wages of British workers

We need to apportion blame to the bosses and their business models, rather than scapegoating one group of workers.

We need to apportion blame to the bosses and their business models, rather than scapegoating one group of workers

Ed Miliband has made another immigration speech this morning, one month after the one made by shadow home secretary Yvette Cooper.

Both speeches set out a line that EU migrants are under-cutting the wages of British-born workers. Indeed ‘under-cutting’ has become a stock phrase of all recent Labour speeches on immigration. But what is the evidence for this and what are the solutions?

The impact of immigration on jobs and wages is complex, and statistics are regularly traded between those with strong feelings about migration.The Migration Observatory at the University of Oxford argues that we need to distinguish between the effect of immigration on the average wage of all employed people and on the wages of different groups of workers along the wage distribution.

It is possible, for example, that immigration leads to a rise in the average wages, but a drop in wages for specific groups of workers.

UK studies find that immigration has little impact on average wages but a more significant impact on the most poorly-paid. A 2013 study from University College London suggested that a one per cent increase in the share of migrants in the UK-born working age population leads to a 0.6 per cent decline in the wages of the five per cent lowest paid workers.

An earlier study from IPPR draws the same conclusions – very large movements of people have a small impact on the pay packets of the most badly paid people.

Of course, the Labour Party and anyone concerned with social justice needs to be concerned about the wages and conditions of low paid workers. This is essential at a time when in-work poverty is increasing. But I believe it is wrong for Labour to talk constantly about one group of workers under-cutting another.

Firstly, low wages are an everyday condition in parts of the UK where there has been little migration. Wages in all sectors of the labour market are lowest in the North East, the region where there is least migration.

Low pay and zero hours’ contracts have become the norm for many workers, irrespective of levels of immigration. If every migrant left the North East today, pay levels would as likely as not remain the same.

My second objection to the term under-cutting is that it is emotive and sets worker against worker. We need to remember that wage levels are set in the boardroom and not by EU migrants. We need to apportion blame to the bosses and their business models, rather than scapegoating one group of workers.

Decent Jobs Week is a TUC-led event that aims to raise awareness about workers in precarious and low paid jobs who are struggling to make ends meet.

Its activities argue for a Living Wage and secure terms of employment. We should be supporting its activities and the trade unions who stand up for workers’ rights. Sustainable solutions to low pay will be achieved by standing together. Let us stop using ‘under-cutting’, the phrase of divide and rule.

Jill Rutter is a contributing editor at Left Foot Forward

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15 Responses to “There is no evidence that migrants are under-cutting the wages of British workers”

  1. madasafish

    Err if there is no problem with migrants undercutting UK wages, then Ed Miliband must be seriously deluded according to these headlines:

    The headline announcement is a pledge to pass a new law making it a criminal offence for employers to undercut workers’ wages and conditions by exploiting migrants. One strategist described it to me as a “uniquely Labour” approach to the issue with neither the Tories nor Ukip prepared to regulate the labour market in this manner.

    Perhaps you need to reconsider what you write in light of Ed’s speech to come.

  2. AlanGiles

    Let’s face it Hapless Ed (Miliband) and Helpless Ed (Balls) and his desperate wife would SAY anything, true or untrue, whether they believe it or not, to get the keys to No.10.

    Or perhaps he is trying to distract from the fact that his situation is even more underminded now by the zombie Blairites like Jim Murphy rising from the political coffin. Or perhaps Ed is trying to forget that at the same time as his brother hints he might like to get back into British politics, it has become even clearer that David M is a liar and assisted in the dreadful process of torture. No doubt DM wasn’t interested in opposition, but government would be a different matter.

    Would we really want this dissembling dishonest creature back at the heart of government?

    Labour don’t deserve to win the general election, and frankly I hope they don’t. Labour need longer in opposition to decide once and for all, if they want to move forward or go back to the ghastly old Blairite waxworks like Murphy and D Miliband

  3. GO

    But Labour aren’t blaming migrant workers for undercutting other workers’ wages. They’re blaming *employers* for undercutting other workers’ wages, by exploiting migrant workers. That distinction may be lost on some people, but in fairness to Labour they are trying to be clear about where the blame lies.

  4. madasafish

    So who let in more of these migrant workers, so letting them be exploited?

    But not of course, taking jobs from Brits, nor reducing British wages – according to this article…

    Blame anyone but the people who encouraged them to come.. and then deliberately understated how many would come…

    I regret Labour have a terrible record on immigration and they cannot be trusted to tell the truth…like all politicians of ALL parties (especially UKIP and the Greens)

  5. Sparky

    Labour MPs have been told not to mention immigration with voters because they’ve lost the argument.

    Read Labours’s internal guidance for yourself.

    James Bloodworth deletes these posts because he can’t debate the truth.

  6. Norfolk29

    A friend of mine, living in North London, wanted to refit her kitchen and selected a small building company to do the work. Seven months later, a job which, with all the will in the world, should have taken a team of four less than a month to complete, was completed. She never saw the same workers two days in a row. The floor was relaid three times with two of the supposed skilled tilers getting up in the middle of the job and leaving the site, never to return. Not one of the workers spoke English as a first language and many of them needed hand drawn diagrams (drawn by her) before they even began to understand what was required of them. The selected builder never turned up more than once a month to collect interim payments and never even attempted to introduce the new workers and tell them what was required. She could only guess that he visited a labour pool every day and selected people who were available and dropped them off at the site. With all the will in the world you can read all your reports by experts and you will never understand the opportunities employers have to exploit immigrants and force down the level of wages of skilled workers.

  7. Guest

    But as your plan involves exploiting British workers, thou doth protest too much.

  8. Leon Wolfeson

    Ah yes, so your plan for “The Truth” is that a moderate right party dosn’t want to discuss one topic, and you winz. Or whatever.

  9. Guest

    No, I completely understand your aims.

    Your use of anecdote.
    Your complaint about a cowboy builder, which is an entirely different issue.
    Your friend’s magical tolerance for this all.

    Why should British workers end up in that situation, rather than cracking down on rogue builders?

  10. Leon Wolfeson

    They’re doing *something*.

    Because it looks good. Because it panders to the right, to people you.
    Not because there’s any actual issue.

    And it’s working.
    It’s another move right from Labour, of course, which will lose votes since you might like the idea but you won’t vote Labour on it, of course.

    Then you suggest a left winger and Labour have anything to do with each other, which is both sickening and laughable.

  11. Leon Wolfeson

    The UK studies generalise too much – prior research has shown that it affects other recent migrants, who correlate strongly with said lowest paid (Not least because they can’t access benefits).

    But as you said, Labour keep moving right. Pandering to people who will never vote for them anyway, and making it plain that they prefer myths to the fact that the problem is neoliberalism and austerity, and their own tolerance of poor working conditions.

  12. JoeDM

    Foreign workers entering this country on intra-compay visas have been under-cutting British workers for years !!!

    British companies are full of Indian IT workers on indian wages who have replaced experienced British IT professionals.

  13. Guest

    Ah, no surprise you want to block skilled workers entering the country.
    IT’s main problem is offshoring, which you’d make far, far worse.

    That you claim there’s companies “full” of illegally paid workers…let’s see the evidence of your many, many reports of this to the government. Which of course you’ve made, as a patriot. Or are they your companies?

  14. horse

    Must have been a big Kitchen to take a month ! But point taken. The problem is that in the building trade, clients want the cheapest price and Eastern Europeans can meet that need.

  15. Norfolk29

    It is in London and cost over £70k and involved floor, walls, toilet, water supply, cupboards and shelves and electrical supply and was a nightmare. In Norfolk we have to wait for tradesmen to do jobs but the quality of the work is superb when it is done. On one job the only specification we had was a photo of a similar fireplace in a friends home. The builder exceeded the beauty of the fireplace and was equally delighted with the result.

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