Do migrants take our jobs?

Construction workers, by Astrid Westvang

It’s one of the key questions at the heart of the immigration debate: do migrants take our jobs? Does every Spanish waiter, Polish plumber or Mexican gardener add up to one more unemployed British or American citizen?

Political profit

Politicians have certainly been quick to imply this is the case. In the UK, Home Secretary Theresa May has stated that ‘uncontrolled, mass immigration displaces British workers, forces people onto benefits, and suppresses wages for the low-paid’. 1, while UKIP leader Nigel Farage ran a successful European election campaign in May 2014 in part by warning that ‘26 Million People in Europe are looking for work: whose jobs are they after?’2

The fear that immigration leads to unemployment is clearly very real, and in political terms very potent. However the evidence suggests that the pervasive belief that migrants ‘take our jobs’ is at best simplistic, and at worst a deliberate distortion of the facts.

Who benefits?

The first challenge in answering this question is to work out who “we” are. There is pretty conclusive evidence that in macroeconomic terms immigration fosters economic growth. The UK Treasury, for instance, estimates that immigration was responsible for around 15-20% of total economic growth in the UK from 2001-6.3 But the trouble is that such gains aren’t evenly distributed, so that on closer inspection the growth that looks like a public good is actually a more complex series of private gains and losses.

As you might expect, migrants gain more than other individuals from their migrating. They chose to move in order to take advantage of higher wages, better business opportunities, or lower costs of living at their destination. An immigrant moving from a developing country to the West can expect on average a fifteen-fold increase in income. 4 But if we’re only interested in calculating the effects of immigration upon existing residents or citizens, it gets more complicated. Business owners and middle-class families may be able to take advantage of an influx of low-wage migrants to increase profits or productivity (for instance by hiring a cleaner or a nanny so they can return to work). Low-wage local workers, however, may find themselves facing new and unwelcome competition. So immigration may encourage economic growth: but it may also exacerbate income inequality between citizens.

Lump of labour

Yet this line of reasoning isn’t in itself proof that migrants take our jobs. We need to avoid falling for the “lump of labour” fallacy. This is the idea that there’s a fixed amount of work in the economy, so that any migrant arriving to work must be taking a local’s job (the same arguments were used half a century ago by men trying to keep women out of the workplace). But migrants (just like women) aren’t just workers: they’re also consumers who eat food, buy clothes, drive cars and send their children to school. So immigration doesn’t just add to labour supply: it also increases the demand for labour.  And there is also a long association between migration and entrepreneurship. In Silicon Valley, companies founded by immigrants were responsible for employing 560,000 workers and bringing in $63 billion in sales in 2012 (although as our analysis here shows, it’s actually a bit more complicated). 5

So what does this mean when it comes to looking at the numbers? We know that between 1997 and 2014, an extra 3.2 million jobs were added to the UK economy. Thirty million people are now employed in the UK (there were 26.2 million employed in 1997). We also know that the number of non-UK nationals working in the UK grew rapidly in the same time period – from 928,000 foreign workers in January 1997 to 2.7 million by December 2013. 6

It’s easy to read these figures and conclude that migrants must have taken a large number of these new jobs. Add to this the fact that unemployment stands at around 2.5 million, and it’s simple to put two and two together and make five: “Migration IS killing off jobs.”7 Yet this is statistical sleight-of hand because it ignores the role a growing population plays in creating new jobs for themselves. The Oxford Migration Observatory offered a less dramatic – but more accurate assessment – of how immigration affects the labour market: ‘migrants account for 16% of newly hired people, but we’re not sure if they’re doing newly created jobs or not, and we don’t know whether those jobs would exist if the migrants weren’t here’. 8

Which migrants?

It’s important to recognize that when it comes to public sympathy, the fear that migrants are taking “our” jobs is really a fear about low-wage, low-skilled workers. We are far more relaxed about the idea that high-skilled workers should have to compete in a global labour market, and that securing the best candidate for the job is paramount regardless of nationality. The UK, for instance, already exempts jobs that pay a salary of £150,000 or more from its skilled migrant quotas. PhD level jobs in the UK are also exempt from resident labour market tests, so that ‘employers may recruit the most suitable person for the job, not necessarily the most suitable person from the resident labour force’. 9 This is not because there’s a shortage of qualified national candidates – most University lectureships attract hundred of applications, including dozens from citizens. So there are undoubtedly highly-skilled workers whose jobs have been “taken” by migrants. But few would suggest that it’s in the public interest to close off these high-skilled labour markets. Worries about migrants taking “our” jobs involve making a judgement about who we might need to protect: we seem relatively happy to accept that the highly-paid and the highly-skilled do not need more privilege.

Protecting workers?

So the real question we’re asking, then, is do low-skilled immigrants take low-skilled workers’ jobs? And the answer would seem to be: occasionally. There is some evidence to suggest that in a recession, some native workers with few qualifications may lose out. In 2012, the UK Migration Advisory Committee published research suggesting that between 1995 and 2010, for every 100 non-EU recently arrived migrant workers employed who had arrived in the past five years, it appeared that 23 Britons lost their jobs. Overall, for every 13 new “migrant” jobs that were created during this period, one “British” job was “lost”.10

But these findings were extremely tentative. A follow-up report stressed that the link seems to be statistically significant only in periods of recession, and only when looking at recently arrived non-EU migrants. This may be because when the economy is growing, new migrants fill new jobs. When the economy is shrinking, there are fewer newer jobs for new migrants to fill – which means more migrants compete directly with locals for the jobs that remain. The ability of European migrants to move freely across the continent means these migrants are ‘more likely to return home if the economic prospects in the UK deteriorate’, so don’t “take” British jobs at all.11 Other non-EU migrants know that once they leave, they may struggle to return. The resulting job squeeze may therefore be a consequence not of migration laws that are too lax, but migration laws that are too restrictive.

Technology and legal loopholes

So what would happen if low-skilled migrants were removed from the labour market? Would this open up new opportunities for low-skilled locals?  History suggests otherwise. In the 1960s, the US also tried to wean its agricultural industry off migrant labour, closing its agricultural Bracero programme due to concerns about the impact on domestic workers’ wages. Yet the result was not increased wages. Irregular immigration increased as a substitute. Furthermore, some farmers responded to the disruption of the labour market by investing in technology instead, permanently automating workers’ jobs. In the 1960s, 45,000 Bracero workers picked Californian tomatoes alongside about 9000 Americans. By 2006, the industry employed only 5000 local workers.  Closing the doors to migrant workers had accelerated technological change, with the result that American jobs were also lost.  12.

There are other circumstances under which migrants may replace local workers because an (often unscrupulous) employer has decided to cut costs. Undocumented migrants are particularly vulnerable to exploitation – fear of deportation means they are far less likely to report poor working conditions and to endure long hours and extremely low pay. However while employing irregular immigrants is illegal, other companies simply exploit legal loopholes. US law allows companies to transfer in workers from other countries on “L” visas and continuing pay them at local rates, provided that’s over the minimum wage in the US state in question – in other words, far less than an equivalent American workers would earn. 13 EU law allows companies to employ “posted workers” without having to pay social contributions in the country of employment, which has led to an explosion of shell companies operating in Eastern Europe to provide workers in the West.14

The wrong question?

In the final analysis, complaining that ‘migrants take our jobs’ is politically seductive, but the evidence doesn’t support such an absolute assertion. We are actually fairly relaxed about high-skilled migrants competing with highly-educated and highly-paid citizens: while we may debate over exactly where to draw the line, few people would argue that all nationals are owed job protection.

The real issue is with low-wage work. It does seem likely that in times of recession, some low-skilled migrants who cannot leave for fear or being unable to return may take some low-skilled locals’ jobs. But these same migrants’ wages may still be supporting other locals’ businesses, and are contributing to wider national economic growth. Entrepreneurial migrants don’t take jobs, they make jobs. Furthermore, history suggests that removing migrant labour from the equation does not automatically lead to more jobs for locals. A shrinking labour supply may encourage businesses to replace manual workers with technology instead.

Yet ultimately, the real problem with the question ‘do migrants take our jobs’ is that it pits migrants against citizens, rather than uniting us all as workers. This distracts attention away from the real causes of growing income inequality, low-wage working poverty and precarious employment: a failure to properly enforce minimum wage legislation, the growing prevalence of zero-hours contracts, and the ambivalence of many companies to workers’ rights.

Related posts: Does migration drive down wages?

  1.  May, T. ‘ An immigration system that works in the national interest’, 12 December 2012, https://www.gov.uk/government/speeches/home-secretary-speech-on-an-immigration-system-that-works-in-the-national-interest
  2. see e.g. Lilico, A., The Telegraph, ‘Ukip posters: Yes, 26 million people are after your job. That’s a good thing
  3.  House of Lords, Select Committee on Economic Affairs, The Economic Impact of Immigration, Vol. 1: Report, April 2008, p.22
  4.  United Nations Development Programme, Human Development Report 2009: Overcoming Barriers – Human Mobility and Development, p.22.
  5. Wadhwa, V., Saxenian, A., Siciliano, F.D. ‘America’s New Entrepreneurs: Then and Now’, October 2012
  6. Office of National Statistics, Labour Market Statistics, April 2014; Clancy, G., ‘Employment of Foreign Workers in the United Kingdom 1997 to 2008’, Economic and Labour Market Review, Vol. 2: No.7, July 2008.
  7.  Slack, J., ‘Migration is Killing Off Jobs: 160,000 Britons have missed out on employment because work was taken by foreigners’, The Daily Mail, 14 January 2012
  8.  The Migration Observatory, New Migrants, “New” Jobs, Old Confusion, 1 February 2012
  9. see e.g. Tier 2, ‘Resident Labour Market Test
  10. Migration Advisory Committee, Analysis of the Impacts of Migration, January 2012. The discrepancy between the 23/100 and 1 in 13 figures results from the fact that the first figure refers to the impact of newly-arrived migrants during recession, while the second is an overall figure.
  11. Devlin, C., Bolt, O., Patel, D., Harding, D., and Hussain, I., ‘Impacts of Migration on UK Native Employment: An Analytical Review of the Evidence, Home Office Occasional Paper, March 2014, p.44
  12. Martin, P. and Teitelbaum, M., ‘The Mirage of Mexican Guest Workers: Everybody wins?‘ Foreign Affairs, November 2001
  13. Costa, D., ‘Little known temporary visa for foreign tech workers depress wages‘, 11 November 2014
  14.  Tudor, O., ‘MEPs should call halt to shoddy compromise on posted workers’, 14 March 2014; Trade Union Congress, Posted Workers’ Directive Briefing for MEPs, March 2014.