Does Immigration From EU Countries Cause Unemployment In The UK?

theresa may

BLACKPOOL, ENGLAND – OCTOBER 6:  Theresa May, the Conservative Party Chairman (L) and party leader Iain Duncan Smith laugh at the annual Conservative Party conference October 6, 2003 in Blackpool, England. Duncan Smith has expressed condfidence over the Conservative party’s prospects, with polls having the Tories closer to the Labour party than they have been for some time. (Photo by Graeme Robertson/Getty Images)  | Graeme Robertson via Getty Images

Did soaring immigration under the last Labour government cost British workers their jobs?

That was the message from Iain Duncan Smith and Theresa May when they unveiled on Monday a decision to ban EU jobseekers from claiming housing benefit.

In a joint article in the Daily Mail, the cabinet ministers wrote: “In just five years between 2005 and 2010, for every British person who fell out of work, almost two foreign nationals gained employment.”

Jonathan Portes, director of the National Institute for Social and Economic Research and former Cabinet Office chief economist during that period, disagrees.

“The period of high immigration that began in the late 1990s actually coincided with historically very high employment rates for British-born workers,” he told HuffPostUK.

“The mid-2000s saw the highest sustained employment rates in recorded history, and  in late 2007, the chances that a Briton of working age was in employment was considerably higher than 10 years earlier.”
NIESR’s Portes argues employment “fell as a result of the financial crisis and resulting recession, but this had little or nothing to do with immigration.”

Atul Hatwal, director of the pro-immigration group Migration Matters, told HuffPostUK: “The implication that migrants took British jobs on an industrial scale is incorrect.

“The government’s figures show that from 2005 to 2008 the numbers of Britons in jobs actually rose – by 116,000. This was a period of near full employment in Britain with demand for workers often outstripping supply so it’s no surprise that employers turned to migrants to fill the gap. As a result the numbers of migrants in work rose by 660,000.

“It is not the case that migrants and British workers are just competing for the same jobs. In 2008, when migration was at its height, the number of unfilled vacancies was the highest ever recorded at 700,000.”

immigration

“From the crash at the end of 2008 to the start of 2010, the government figures show that the numbers of Britons and migrants in work went down – in both cases by 3%.”

Ministers are also falling foul of what economists call the “lump of labour fallacy” as they suggest that there is a fixed quantity of work to be done in the UK so any extra workers would reduce the number of jobs available, whereas they actually increase the size of the economy and end up increasing the amount of jobs available.

Duncan Smith and May cite “evidence from the Migration Advisory Committee” in their article to suggest that immigration negatively affects British workers in the Labour market.

However a report from Jonathan Wadsworth, member of the Migration Advisory Committee, shows that “there is little evidence of overall adverse effects of immigration on wages and employment for people born in the UK.”

He adds that it is “hard to find evidence of much displacement of UK workers or lower wages… they certainly do not receive preferential access to housing.”

It may make political sense for ministers to blame rising unemployment on immigration from the EU, however the economic evidence does not necessarily back that up.

From the Huffington Post . Report by Asa Bennett . 21.01.14

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