Britain’s use of migrant workers has grown very rapidly over the past two decades. The share of foreign born workers in total employment in the UK doubled from less than 7 percent in the early 1990s to over 13 percent in 2009. Over a third of foreign-born workers are British citizens. Foreign nationals now constitute about 8 percent of total employment, up from 4 percent in 2002.

The growth in the use of migrant labour in recent years has been fastest in low-skilled jobs. Foreign-born workers are now a quarter of the workforce among ‘process operative’ - such as workers employed in food processing - up from only 8 percent in 2002.    

Is the growth in Britain’s reliance on new arrivals from both within and outside the EU inevitable or can it be influenced by policy?   The answer to this question  – which is fundamental to the government’s policy objective of reducing Britain’s reliance on migrant labour -  requires a critical analysis of the alternatives that employers may have and the incentives they face when responding to labour shortages. 

Alternatives to immigration 

In theory, employers may have a number of options to respond to perceived staff shortages. These include increasing wages and/or improving working conditions to attract more citizens who are either inactive, unemployed, or employed in other sectors, and/or to increase the working hours of the existing workforce. This in turn may require a change in recruitment processes and greater investment in training and up-skilling; changing the production process to make it less labour intensive by increasing the capital and/or technology intensity; relocating to countries where labour costs are lower; switching to production of less labour-intensive commodities and services; and employing  migrant workers.

Of course, not all of these options will be available to all employers at all times. Most construction, health, social care and hospitality work cannot be off-shored.  An employer’s decision on how to respond to a perceived labour shortage depends in part on the relative cost of each of the feasible alternatives.  If there is ready access to cheap migrant labour, employers may not consider the alternatives to immigration as a way of reducing staff shortages. This may be in the short term interest of employers but perhaps not in the best interest of the sector or other parts of the economy and society. Moreover, there is clearly the danger that the recruitment of migrants to fill perceived labour and skills needs in the short run exacerbates shortages and thus entrenches the certain low-cost - and migrant-intensive - production systems in the long run.

It is important to recognise, however, that employers do not make their choices in a vacuum. Employers’ incentives and business and recruitment strategies are critically influenced, and in many ways constrained by, the wider institutional and regulatory framework created by public policies. Our main argument is that public policies have often incentivised – and in some cases left little choice for – individual employers to respond to shortages through the employment of migrant workers. The UK has long prided itself on its labour market flexibility and its relatively low levels of labour regulation. Together with a range of policies from training to housing, this stance has contributed to creating a growing demand for migrant workers.

In the construction sector the difficulty of finding suitably skilled British workers is critically related to low levels of labour market regulation and the absence of a comprehensive vocational education and training system. The industry is highly fragmented. It relies on temporary, project-based labour, informal recruitment and casualised employment. These practices may have proved profitable in the short term, but they have eroded employers’ incentive to invest in long-term training. As a consequence, vocational education provisions are inadequate for the sector. By contrast, many European states have well-developed training and apprenticeship programmes, producing workers with a wide range of transferable skills. It is often these workers who are doing jobs in Britain such as groundwork, or foundation-building, which is low-paid and which has no formal training requirement, despite years of lobbying by contractors.

Social care is another sector where public policies have created and increasing demand for migrant workers. Two thirds of care assistants in London are migrants. The shortages of social-care workers and care assistants are largely due to the low wages and poor working conditions. Most social care in the UK is publicly funded, but actually provided by the private sector and voluntary organisations. Constraints in local authority budgets have contributed to chronic under investment. Together with the structure of the care sector itself, this approach has resulted in a growing demand for low-waged, flexible workers. Simply cutting benefits, or reducing legal access to migrant workers without addressing the causes of British workers’ reluctance to apply for jobs in the sector, will put more pressure on an already creaking system.

Choice or inevitability? 

Britain’s reliance on migrant workers is not – as is sometimes argued – simply a consequence of lax immigration controls. Neither can it be reduced to ‘exploitative employers’, ‘lazy Britons won’t do the work’, or ‘migrants are needed for economic recovery’.

The increasing demand for migrant workers arises from a broad range of institutions, public policies and social relations. Reducing or at least slowing down the growth in this reliance will not happen without fundamental changes to the policies and institutions that create the demand. This includes greater labour market regulation in some sectors, more investment in education and training, better wages and conditions in some low waged public sector jobs, improved job status and career tracks, and a decline in low waged agency work. In the short- to medium term, some of these changes are unlikely because of the economic downturn and budget cuts which may well in fact increase demand for migrants in low-waged sectors such as social care. In the long term, the key question is whether the UK is really able and wants to make the kinds of changes in wider public policies in exchange for fewer new migrants.

This article is stems from Martin Ruhs and Bridget Anderson's latest book, Who Needs Migrant Workers? Labour Shortages, Immigration and Public Policy, (OUP)