There are roughly 3 million EU citizens living in the UK, according to a House of Commons briefing. They come here mainly to work – indeed, 85% were in employment in 2014, according to Eurostat, the EU’s statistical agency. That’s more than the native population, where the figure is 81% . The employment rate is higher than that of EU citizens in any other EU country. Migrants both from the EU and elsewhere are also more entrepreneurial than the native population: 17% of them set up their own businesses compared to 10% of Brits.
What’s more, most EU citizens in the UK are young and skilled: 32% of recent arrivals have university degrees compared to 21% of the native population and the average age of the European immigrant population in Britain was 34 in 2011, compared with 41 for the native population. We don’t pay much for the immigrants’ education since they normally arrive after being educated. And, since most of them are working age, we don’t pay much for their pensions or health care either. Many eventually return home, carrying good memories of the UK with them. In other words, we get a good economic deal from EU immigrants.
EU immigrants are split roughly equally into two groups. The first are from the “old” EU countries in Western Europe such as France, Germany, Spain and Italy. These are typically better skilled and higher paid than our native population: 37% of them are managers or professionals, compared to 28% of UK-born citizens according to the Centre for Economics and Business Research. The second group is from Eastern European countries. Although they, too, tend to be well educated, they are poorer than the Western Europeans and often work in jobs such as catering, manufacturing and construction. They come to Britain to work hard, enjoy a better standard of living and save.
Migrants from the EU do so well economically that some Brits fear they are taking our jobs. But there is no evidence for this. The UK economy has been good at creating jobs. In fact, 3.3 million were created net between 1997 and 2013. While immigrants accounted for much of the increase, the net increase in jobs for UK natives was 1.1 million.
Nor is there evidence that EU immigration has depressed the wages of our less skilled workers, according to a review of the academic studies by the Centre for European Reform. A recent report by the Bank of England, using the most up to date figures, showed the problem to be smaller than originally thought. Annual pay rises have seen a reduction of about a penny an hour for workers in the low-skilled service sector, cumulating to a total impact of about one percent since 2004 (the year many Eastern European countries joined the EU). While one percent isn’t nothing, this is also the effect of other trends, including the rising level of the minimum wage, the dwindling power of trade unions, globalisation and technology.
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But there is a problem of lax enforcement of our employment legislation. There have, for example, been only nine prosecutions for not paying the minimum wage. Immigrant workers, who sometimes don’t know their rights, are the main victims of this enforcement failure. But low-skilled natives also suffer indirectly because employers are more willing to turn to immigrants on the grounds that they are easier to exploit. We need to do a far better job of policing the minimum wage. The government seems to have got the message. Cameron is planning to set up a new enforcement agency to crack down on the culprits, taking over a job previously split between four different departments.
Of course, there are too many young people who are “NEETs” – not in education, employment or training – and who aren’t otherwise unavailable for work (say if they are looking after their own children). Britain has around 400,000 of these, the vast majority of whom have low educational attainments. But the solution is to train them up and encourage them to take jobs rather than live off welfare – not to prevent other EU citizens coming here. The government’s plan to increase the provision of apprenticeships is an important step in the right direction. As Boris Johnson, the mayor of London, put it in 2013: “We need to help our young – not beat up on Johnny Foreigner.”
Indeed, the ability of companies to employ hard-working foreigners from across the Channel is actually creating jobs because it has improved the competitiveness of British companies by helping them to expand, and by encouraging foreigners to set up businesses here too. Look, for example, at London’s tech and design clusters. These vibrant new industries benefit from the cross-fertilisation of ideas brought by talented youngsters from the EU. Or look at how French entrepreneurs are quitting their country to come to Britain because of excessive taxes and an anti-business attitude at home. They often bring with them wealth and ideas to start new businesses. No wonder Johnson has promised to roll out the red carpet for these entrepreneurs. No wonder, too, that he says: “It makes no more sense to exclude talented and legally established foreign workers than it does to exclude foreign investment.”
This is an excerpt from “The In/Out Question: Why Britain should stay in the EU and fight to make it better” by Hugo Dixon.
Factchecking by Luke Lythgoe
This piece has been updated to clarify the distinction between increases in net employment and the creation of new jobs.