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Recent migrant workers in the UK labour market: What has changed in the last five years?

29 Mar 2015

Over the last five years scrutiny of the quarterly net migration data release from the ONS has become something of a media ritual. While these snapshots of net migration are interesting, it is also important to remember that net migration levels at the end of a parliament do not tell us the whole story about migration dynamics during the entire parliament.

One way to get a picture of how migration has been changing over a period of several years is to look at the numbers and characteristics of ‘recent migrant workers’ (RMWs) who arrived in the UK within the past five years. Recent migrant workers are of particular interest because many of the aspects of migration that attract public debate (such as its effects on the labour market, on the skill profile of the workforce, or on demand for public services) are associated with new arrivals, rather than long-established residents to which the country has already adjusted.

This commentary looks at RMWs in 2009 and 2014 (the 2009 group includes those who arrived between 2005-2009, and the 2014 group includes those who arrived from 2010-2014). Examining data from the UK Labour Force Survey, our analysis defines this group as people between the ages of 16 and 64 who were born outside the UK, are foreign nationals, and are in full time employment (including the self employed).

Taken together, the data suggest that:

  • There were fewer RMWs in the workforce in 2014 compared with 2009. This number has fallen by over 100,000 since 2009.
  • The number of RMWs from countries that joined the EU before 2004 has increased. Because this group is strongly concentrated in highly skilled work, the increase partially offset declines in the number of non-EU workers and Eastern European workers doing these jobs.
  • RMWs from Eastern European countries that joined the EU in 2004 (the EU-8) are more likely to be working in low-skilled jobs, although the total number doing this work has declined.

Definitions In this commentary, ‘EU-14 countries’ refers to the 14 other countries that were members of the EU before enlargement in 2004. EU-8 countries include the eight East European countries that joined the EU in 2004 (i.e. excluding Malta and Cyprus).

A decline in recent migrant workers in the UK

Between 2009 and 2014, the overall number of RMWs in the UK labour market declined by 117,000, from 725,000 in 2009 to 608,000 in 2014. This does not mean that there are fewer foreign-born people in the UK labour market overall (see our briefing Migrants in the UK Labour Market – an Overview). But what it does show is that, in terms of the growth of new migrant workers employed in the UK, the pace of change has slowed compared to the period leading up to the 2010 general election.

In 2014 there were 100,000 fewer RMWs from the EU-8 countries than in 2009, and 89,000 fewer RMWs from outside the EU. However there was an increase of 35,000 RMWs from EU-14 countries. EU RMWs can live and work in the UK without a work visa.

Table 1 – Recent migrant workers in the UK

GroupNumberNumber living in LondonPercentage living in London
200920142009201420092014
EU-14 born86,000*121,000*48,000*62,000*0.560.51
EU-8 born286,000*186,000*45,000*32,000*0.160.17
Non-EU born324,000*235,000*140,000*106,000*0.430.45
All foreign-born725,000*608,000*25500024200035%*40%*

In London, the data show a decline in RMWs of only 13,000 that is not statistically significant (meaning that apparent changes may result from statistical error rather than real changes in the workforce). This is because the share of RMWs living in London has increased. Among recent migrants, people from EU-14 countries are particularly likely to live in London. As a result, higher levels of recent migration from EU-14 countries have contributed to RMWs overall being slightly more concentrated in London than they were in 2009 – with the overall share increasing from 35% to 40%.

The reasons for the changes in RMWs’ regions of origin vary.

EU-14 countries: The growth in the number of RMWs from EU-14 countries is likely to be related to unemployment in the Eurozone and the stronger economic performance and relatively high levels of employment in the UK.

EU-8: The higher number of RMWs from EU-8 countries in the 2009 data is a result of the surge in EU-8 migration after EU expansion in 2004. Inflows of migrants from EU-8 countries declined after the financial crisis hit in 2008. So, while there has been a recent increase in numbers of workers immigrating to the UK from these countries, numbers took some time to recover, which is reflected in the lower cumulative numbers of RMWs in 2014.

Non-EU: The decline in non-EU RMWs since 2009 is likely to result from a combination of lower economic growth reducing demand for non-EU workers and the current government’s efforts to restrict eligibility for visas for non-EU citizens to come to the UK after 2010. (The number of work visas issued to non-EU citizens, in particular, has fallen substantially since 2006 but most of this decline took place before the current government’s policies were introduced.)

The changing composition of the recent migrant labour force

How do RMWs today compare to those five years ago? Table 2 shows what kinds of work RMWs are doing in the UK. It looks at the share of workers in the least skilled jobs (the group known as ‘elementary occupations’ that includes roles such as food preparation assistants, construction or manufacturing labourers or agricultural workers) and those in management and professional occupations.

Table 2 – Recent migrant workers in elementary and professional occupations

GroupElementary occupationsSenior management / Professional
      Number%         Number%
20092014200920142009201420092014
EU-14 born7,000*15,000*8%*12%*46,000*63,000*0.530.52
EU-8 born106,000*80,000*37%*43%*22,000*10,000*8%*5%*
Non-EU born43,000*28,000*0.130.12128,000*101,000*0.40.43
All foreign-born1670001540000.230.251980001800000.270.3

When we break the analysis down by the skill level of the jobs RMWs are doing, the changes in the total shares and numbers between 2009 and 2014 are not statistically significant. One reason for this is that changes for the particular subgroups (EU-14, EU-8 and non-EU) have worked in different directions. As a result, increases in the number of recent EU-14 migrants working in high-skilled jobs have partially offset decreases in non-EU and EU-8 RMWs doing this type of work.

EU-14

Compared to the other two major origin groups, the recently arrived EU-14 workforce is most likely to be working in the highest skilled jobs. A little over half of RMWs from these countries are in management and professional occupations, compared to one third of the overall UK born (non-migrant) workforce in 2014. This a share has not changed significantly since 2009. However, because the EU-14 group has become larger, this represents a numerical increase of 17,000 RMWs from these countries in high-skilled occupations in the UK.

The share of EU-14 RMWs in elementary occupations has increased from 8% to 12% over the course of this parliament, although the absolute number remains relatively small (15,000 RMWs in 2014). In 2014, 7% of all UK-born people employed in the UK were in these jobs.

EU-8

In contrast to EU-14 nationals, Eastern European migrants are much more likely to be working in low-skilled jobs and this trend has continued in the past 5 years. The share of RMWs from EU-8 countries in the least skilled occupations increased from 37% to 43% between 2009 and 2014 while the share in managerial and professional occupations declined from 8% to 5%. Because the overall number of recent migrant workers from EU-8 countries has declined, however, in numerical terms this means a decline of 26,000 (from 106,000 to 80,000) EU-8 RMWs in elementary occupations and a decline from 22,000 to 10,000 in the number of EU-8 RMWs in the highly skilled occupations.

Non EU

Government policies to increase selection on the basis of skills may have changed the composition of the non-EU recent migrant workforce – increasing the skilled share and reducing the low-skilled share – although the data are inconclusive on the extent of this effect. The increase in the share of non-EU RMWs in highly skilled occupations from 40% to 43% was not statistically significant, meaning that it could be the result of statistical error.

Because the overall number of non-EU recent migrant workers has declined, the increased share in highly skilled occupations corresponds to a numerical decline of approximately 27,000.

Nominal earnings among recent migrant workers see small increases

From 2009 to 2014, the salaries of the UK born workforce changed relatively little—from £28,000 to £30,000 in nominal (not inflation-adjusted) terms. These increases did not keep up with inflation, as has been widely reported.

Table 3 shows salaries earned by RMWs and the UK born, for people in full-time employment. Note that we only have salary data from the LFS on about 40% of the respondents who are employees in any given quarter and we don’t have information for those in self-employment. We also include earnings from second jobs if the person has one.

The evidence suggests that non-EU RMWs have seen modest growth in nominal salaries for RMWs, while the other two groups of RMWs have not. Those from EU-14 countries have relatively high salaries across the two years in comparison, but saw no increase since 2009. Non-EU recent migrant workers saw an increase in average nominal salaries between 2009 and 2014  from 30,000 to 35,000. This larger increase is consistent with an increase in the skill level of non-EU recent migrant workers’ jobs.

Table 3 – Recent migrant workers in full-time work

Group Annual nominal salary (£) 
20092014
EU-14 born3500034000
EU-8 born1600017000
Non-EU born30,000*35,000*
All foreign-born24,000*28,000*
UK-born (entire non-migrant workforce)28,000*30,000*

Conclusion

Below the headline figures, there have been some substantial changes in the composition of the recent migrant workforce. The number of RMWs employed in the UK has declined, overall, although increases in RMWs from EU-14 countries have meant that this decline was smaller than would otherwise have been expected – in both high-skilled and low-skilled jobs. EU-14 RMWs have also contributed to a larger share of the RMW population living in London – in contrast to the pre-2009 period in which growing migration from Eastern European countries had increased the dispersion of the migrant population to less traditional destinations beyond the capital.

Related material

This publication arises from research funded by the University of Oxford’s ESRC Impact Acceleration Account. With thanks to Martin Ruhs and Bridget Anderson for comments.

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