(Read Part 1 here)

Our second part on Britain’s MAC report focuses more on the impact this might have on lower-skilled labour. It is particularly interesting to observe the implications for EU/EEA workers. You can find a summary of the impacts of EEA workers as portrayed by the MAC report in Figure 1.

Lower-skilled

The message is loud and clear: the UK wants more high-skilled workers and less low-skilled workers. The MAC report decidedly verifies this fact and even gives this sentiment gravity through a thorough economic assessment of the situation. As seen by the recent removal of doctors and nurses from the Tier 2 visa cap[1] due to the NHS demand for more workers, the government is already looking to encourage this shift. Therefore, the report’s recommendation comes as no surprise to this.

The salary threshold for Tier 2 visas at the moment sits at £30 000. A person earning less than £30 000 per annum, however, does not realistically qualify as being a “lower-skilled worker” in all regions of the United Kingdom – let alone Europe. For example, Scottish businesses will likely be forced to increase wages in order for their salaries to meet the threshold and be able to sponsor said visas and attract workers, while London businesses will hardly be affected since their wages are already much higher. The report also states that the Tier 2 visa will only be open to jobs of RQF3 and above, which roughly translates to A Level holders (or equivalent) and above.

The impact of these recommendations, if adopted, will of course be the desired outcome for the UK, meaning that there will be much greater barriers of entry to lower-skilled workers. Figure 2 clearly shows that 83% of people in the whole of the UK are earning less than the desired amount for workers of RQF <3 and 63% for those on RQF3 in order to be eligible for a Tier 2 Visa. It is also worth mentioning that there is a huge difference when comparing the percentage of people in RQF3 who do not qualify through the salary threshold in London (47%) and people not qualifying in Scotland (64%), meaning that migration trends of lower-skilled workers will be greatly halted in the more Northern regions, while the South will see a minor discrepancy.

The impact towards EU citizens however, will be much greater. The UK has been a very popular destination since the 1980s as seen in Figure 3 and has had a positive net migration figure since the 1990s – regardless of skill cap. This sudden barrier of entry, will force one of two outcomes for EU citizens: 1. To stay in their home state; 2. To move to another EU state.

  1. There is already a huge strain on numerous countries’ welfare system (e.g. Spain, Italy, Cyprus) where unemployment rates, especially amongst young people (Spain’s youth unemployment rate is at 33.4%) are soaring. Even though there seems to be a downwards trend, this is often attributed to people migrating to other more “opportunity-rich” countries, such as the UK.
    The pessimistic approach to this could definitely spell out the destruction of the notion of a welfare state and the practical annihilation of any support systems due to an insurmountable demand.It could however also be an opportunity for the development of local businesses, usually away from the realm of the financial, investment and economic sector, due to the overwhelming dominance of other such hubs, such as London. There has been a trend as of recently to work through grassroots movements, especially through the populist surge prevalent in a few of these countries – namely looking at Podemos in Spain and SYRIZA in Greece.
  2. There is always the option to move to another EU state where there are more job opportunities compared to one’s home state. There has already been a decrease in EU migrants going to the UK due to the Brexit vote, but this could swing the numbers even further. According to Eurostat (Figure 4), the percentage of EU citizens in the UK was in fact one if the highest in 2016, but there is also a case to be made about other countries such as Germany or Austria and even Luxembourg.
    Granted, there is the argument of population size, but it is an undeniable fact that – at least geographically – other EU countries are far more accessible than the UK. By adding another barrier, a political one in this case, the numbers will surely decrease and migrants will pivot to other member states. This could potentially see even more strain towards the migration issue due to the high influx of lower-skilled workers in countries, which cannot possibly sustain them. Even so, it will be unlikely for EU economic migrants or job-seekers to move into a country such as Greece (e.g. in 2016 it only had 14.2%).

So where does that leave lower-skilled EU workers vis-à-vis their future after the potential MAC recommendations come into effect? Assuming that the UK sticks to this plan, then there will definitely be an exodus of said worker from their country. The best bet would be that there will actually be an overall gross increase in migration throughout Europe in the pursuit for a new recipient to these citizens, since the push factors are still very much in place, while the pull factors for the UK will essentially disappear.

 

Figure 1[2]

Figure 2[3]

Figure 3[4]

Figure 4[5]

Featured Image Credits: Nicolas Mavreas

References

[1] “Doctors and nurses to be taken out of Tier 2 visa cap” https://www.gov.uk/government/news/doctors-and-nurses-to-be-taken-out-of-tier-2-visa-cap

[2] MAC Report (2018), paragraph 7.1, p.108-109

[3] MAC Report (2018), paragraph 7.3,  p.122

[4] “What Immigration system should Briatin adopt after Brexit?” – The Economist, September 20th, 2018

[5] Eurostat (online data code: migr_imm1ctz)

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