Low absentee rates, not wages, led UK firms to hire EU workers, report warns

Lower absentee rates have led UK firms to employ EU workers, according to a new report. [BasPhoto/Shutterstock]

Lower absentee rates, rather than lower wages, have been the main driver for UK employers to hire EU workers, according to a report published on Tuesday (27 March), which should be instrumental in defining the UK’s post-Brexit immigration policy.

The interim report by the Migration Advisory Committee (MAC), which assesses the impact of EU migration on the UK’s labour market, was commissioned by UK home secretary, Amber Rudd. The government has stated that the final report this autumn will help form the rules on migration for the period after the UK leaves the EU in March 2019.

Workers from countries in the European Economic Area (EEA) also reported lower absenteeism rates than UK-born workers, particularly among migrants from post-2004 accession countries, and greatest for medium and lower-skill levels.

The MAC report found that migrants from countries that were EEA members before 2004 earn 12% more than UK-born workers, while migrants from the post-2004 enlargement countries earn 27% less than UK-born workers on average.

Previous MAC reports have concluded that migrants had little or no impact on average wages.

Migration was a central issue in the 2016 referendum campaign, with the Leave campaign contending that EU migrants were dampening wage growth.

Prior to the referendum, then Prime Minister David Cameron was rebuffed by other EU leaders when he attempted to curb the rights of EU migrants to access welfare benefits in the UK.

The government has been criticised for repeatedly delaying the publication of its long-awaited Immigration Bill, now scheduled for this autumn. The delay had caused “anxiety” and “uncertainty” to both EU citizens in the UK and businesses, said MPs on the Home Affairs committee last month.

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The most popularly supported public service in the UK, the national health service (NHS) is also the country’s largest single employer. Throughout its nearly 70 year history, it has been reliant on migrant workers and may face a serious shortage of staff because of Brexit.

In a veiled warning to ministers not to pursue an overly restrictive approach, the MAC report states that “migrants have a choice and it cannot be taken for granted they will choose to come to the UK.”

“My view is that international evidence suggests that increased migration is positive on productivity and impact of reduced migration as consequence of Brexit is likely to be negative for the economy,” Jonathan Portes, a professor of economics and public policy at King’s College London, told MPs on the Treasury select committee on Tuesday.

“It is not surprising that people link increased immigration to reduced wages because immigration is visible.  However, when looking at the data it is clear that EU-immigration benefits the UK economy as a whole and not at the expense of low-paid workers,” he added.

“Eastern Europeans attract twice as much benefits as the average worker in the UK,” said Alp Mehmet, Vice-Chairman of Migration Watch, a campaign group which advocates tight restrictions on migration.

“The people affected most [by EU migration] are those who can afford it least,” he said.

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