Memorandum by Dr Steve French, Centre
for Industrial Relations, Keele University
1. The context of the submission
The submission to the Economic Affairs Committee
is based upon three research projects that the author has undertaken
into the impact of migration on the labour market of North Staffordshire
and, more recently, South Cheshire. The research projects were
funded by small grants the Low Pay Commission, the Nuffield Foundation
and the Unity trade union.
Why research in North Staffordshire?
While is it problematic to generalise from the
findings from such geographically restricted research, it can
be argued that this research makes a valuable contribution to
the growing body of literature on migration. The reasons for this
lie with the area under consideration, its economic structure,
its migrant population and the political context.
North Staffordshire has undergone profound economic
changes in the last 25 years. Traditional industries such as coal
mining and steel production have disappeared, while large employers
such as the pottery firms and Michelin have restructured or re-located
production work, with significant reductions in employment. To
a large extent these relatively low-waged unionised jobs have
been replaced by equally low-paying, non-unionised retail, distribution
and call centre work, with trends toward unsocial hours and non-standard
contracts of employment. In addition, the rural economy surrounding
Stoke-on-Trent means that agricultural and food processing industries,
identified as prime industries for the employment of migrant labour,
also fall into the North Staffordshire labour market.
A wide range of statistical indicators highlight
the relative levels of deprivation within the principal urban
conurbation in North Staffordshire, Stoke-on Trent, notably in
terms of education, training and development (7th most deprived
local authority in England), health deprivation and disability
(12th) and employment (21st) (English Indices of Deprivation,
2004). The labour market profile of Stoke-on-Trent (Nomis, 2006)
highlights the problems facing the regeneration of the area and
raises a number of important questions about the potential utilisation
of migrant labour. The occupational structure of the city reflects
a lack of highly skilled employment. While the proportion of workers
in the top three occupational groups for Great Britain is 52.1%,
only 27.7% of employment in Stoke-on-Trent is within these occupations.
The industrial structure of the economy is reflected
in the high proportion of skilled manual workers, but employment
in the city is disproportionately located within lower skilled
occupations. While 36.3% of employment in Stoke-on-Trent is in
the bottom three occupational groups, this accounts for only 26.3%
of employment nationally.
While the unemployment rate in 2006, at 5.1%,
lay marginally below the regional (5.5%) and national (5.3%) levels,
the proportion of economically active (26.7%) was considerably
higher than the regional (22.7%) and national (21.4%) levels.
The most notable geographical variation lies in workplace earnings.
The median earnings of full-time workers (gross weekly pay) in
2006 were £361.70 in Stoke-on-Trent, compared with £421.4
in the West Midlands and £449.60 nationally (Nomis, 2006—based
upon annual survey of hours and earnings by workplace).
Finally it should be noted that the city of
Stoke-on-Trent has a very low level of qualification rates among
those of working age, as indicated by table 1 below.
Table 1
QUALIFICATIONS (JANUARY 2006-DECEMBER 2006)
|
| Stoke on Trent
(%)
| West Midlands
(%)
| Great Britain
(%)
|
|
| NVQ4 and above | 17.1
| 23.9 | 27.4
|
| NVQ3 and above | 34.2
| 41.1 | 45.3
|
| NVQ2 and above | 54.8
| 60.5 | 63.8
|
| NVQ1 and above | 73.6
| 74.8 | 77.7
|
| Other qualifications | 6.4
| 7.7 | 8.5
|
| No qualifications | 19.9
| 17.5 | 13.8
|
|
| Source: ONS annual population survey
|
Notes: For an explanation of the qualification levels see the definitions section.
Numbers and % are for those of working age
% is a proportion of total working age population.
|
It is against this economic and labour market background
that asylum, immigration and migration have become extremely sensitive
topics. North Staffordshire has traditionally been relatively
homogeneous in terms of resident population, with a population
structure that was overwhelmingly white and British and disproportionately
concentrated in lower income and occupational groups. However,
the last decade has seen a noticeable increase in other ethnic
groups residing within the area. The 2001 Census indicates that
the population of Stoke-on-Trent is 93.58% white British, with
members of the Asian or Asian British ethnic group constituting
the largest minority ethnic group (3.53%). Almost three-quarters
of this ethnic group residing in the city are Pakistani in origin.
This ethnic population is also heavily concentrated, with British
Asians constituting 35.9% and 21% of the populations of the Cobridge
and Shelton areas respectively.
The growth of the black and minority ethnic (BME) communities
within the city has been associated with growing tensions. However,
it has been the arrival of asylum seekers into the area since
1999 that has led to the most publicized debates among, and general
hostility from, the white, British population. The increase in
the number of asylum seekers housed in the city (peaking at 1,200
within Stoke-on-Trent in the last quarter of 2002, equivalent
to 0.5% of the city's population) has generated a number of negative
stories about asylum seekers. These have formed the basis of successful
British National Party (BNP) campaigns. Indeed, the far-right
party has campaigned almost exclusively upon asylum issues in
the city, achieving sizeable votes in the 2002 and 2005 Mayoral
Elections, and currently holds five council seats.
The increasing antipathy towards, and harassment of, asylum
seekers, refugees and members of established ethnic minorities
has been documented by the Partnership Approach to Racial Incidents
in North Staffordshire (PARINS).
A final, but equally significant, development has been reports
of the recruitment of migrant workers into the area since 1999.
Local media have reported the direct recruitment of migrant labour
from outside of the European Union into the local health service
(eg Filipino, Indian and Fijian nurses), and there have been numerous
reports of employers seeking to recruit workers from the EU accession
states since 2004 (for example, Czech and Polish workers at the
local bus company First PMT; Slovenian workers at Alton Towers;
Polish workers at the pottery firm Wood & Sons and Polish
dentists). In addition to these groups of recent migrant workers,
there is clearly potential for the employment of students from
outside the European Union given the location of Keele and Staffordshire
Universities within North Staffordshire. Again, there have been
criticisms of such policies, in relation to the impact on regional
unemployment rates, fears that the employment of such workers
will be used to undercut existing pay and conditions (The Sentinel,
2005a) and fears of further racism and xenophobia (The Sentinel,
2005b).
In summary, the North Staffordshire labour market presents
an interesting case study for a number of reasons. Firstly, the
North Staffordshire labour market contains a relatively wide range
of (low-skilled) employment in industrial, distribution, customer
service and agriculture or food processing sectors. While there
is potentially a high demand for migrants to address skilled labour
market shortages—derived from the low skill and qualification
levels of the local population—the occupational structure
of the area and its relatively high unemployment rate suggest
that there may also be scope for employment substitution of indigenous
workers by new arrivals.
Secondly, there is evidence of a number of different groups
of new arrivals migrating into the area. This allows an examination
of the utilisation of a range of different migrant workers, with
different legal status, language and employment-related skills,
and crucially allows an examination of possible substitution effects
between different groups of migrant workers. Thirdly, the economic
factors that characterise the local labour markets and the use
of migrant labour cannot be divorced from the political environment
and its influence upon the perceptions and decisions of local
employers and workers. These range from the reporting of issues
relating to ethnic minorities and asylum in local media, to the
campaigning of the BNP and to important political developments
such as the ongoing cutbacks and redundancies within the NHS.
As a result, the research has been able to address areas
which have not been examined by other research, notably research
focused upon an industrial setting rather than in the agricultural
or hospitality sectors, research outside of the South East, and
crucially, research which focuses upon the interaction between
different groups of migrant workers.
The research undertaken
The main objectives of the research in each of the three
research projects were to discover the reasons why migrant workers
were being employed in the area; to analyse the terms and conditions
of migrant workers and their experiences of work; and to examine
whether the utilisation of migrant labour was leading to competition
between indigenous workers and migrant workers.
The fieldwork research undertaken applied a range of research
methods to generate evidence about the use of migrant workers
and their own experiences. The research activities can be broadly
characterised under two headings. The first stage was based upon
documentary searches (particularly of local media) and interviews
with representatives from organisations that have direct contact
with migrant workers to map the use of migrant labour in North
Staffordshire. The second stage focused upon small-scale surveys
and interviews with representatives of organisations employing
migrant workers and a selection of migrant workers from across
different economic sections and from different communities that
make up the new arrivals.
The mapping exercise focused upon analysis of the allocation
of National Insurance numbers to foreign-born workers and the
Worker Registration Scheme data available for Stoke-on-Trent.
The initial interviews with local agencies and a search of local
media (which formed the basis of this and the LPC project) provided
additional information about a number of firms where migrant workers
were employed and some indication of the problems which these
workers face.
As a result, the researchers initially identified 23 companies
where they sought to conduct interviews with managers and migrant
workers. As reflected in other research into migrant workers,
access to employers did prove to be difficult to secure. While
the researchers were able to interview 13 employers from these
23 companies, but interviews were only possible with six further
employers subsequently. Of these 19 companies, seven were employment
agencies. In addition to this a small-scale survey of 78 HR and
Personnel managers was conducted through the local CIPD branch.
While some agencies were prepared to provide limited access
to migrant workers in their employ, in most cases it was impossible
to facilitate interviews directly with migrant workers in firms
studied. Consequently, access to migrant workers was secured through
a number of other routes, through the local college (ESOL classes),
Stoke-on-Trent CAB, the Unity trade union, the local Polish Association
in Longton, and through contacts established by the four interpreters
employed on the project. Initially, new arrivals were asked to
complete a brief one-page questionnaire (available in English,
Polish, Czech, Slovak and Russian) which focused upon basic personal
employment, accommodation and benefit data, and to provide contact
details if they were prepared to be interviewed. In total, 86
surveys were completed by new arrivals working, predominantly
from Polish workers.[34]
In total 63 migrant workers were interviewed. Interviewees
lasted between 15 and 60 minutes and were conducted by the researchers
using interpreters. In total, 37 Polish workers, 16 Czech and
Slovak workers and 10 refugee and asylum seekers were interviewed.
2. What are the numbers and characteristics of recent immigration?
How do the characteristics of EU migrants differ from other migrant
groups?
Firstly, it should be noted that the data available that
seeks to count the numbers of recent migrants (the Worker Registration
Scheme and National insurance number data) is not robust. In respect
of WRS data there are potential issues as to whether A8 migrant
workers do actually register and maintain their documentation
up-to-date. The data cannot account for migrant workers who subsequently
leave the UK, nor can it pick up information about those family
members of A8 migrant who come to the UK. There is also the question
of accounting for workers who have completed their year of work
in the UK and gain residence and access to benefits. It is not
clear how, if at all, these workers are monitored, notably in
terms of where they might subsequently end up working and living.
The Nino data is also problematic, as it cannot deal with labour
mobility and again is restricted to those seeking employment.
Crewe and Nantwich Borough Council have, therefore, sought
to establish new sources of data to account for the primarily
Polish, migrant population in the borough, using data from recruitment
agencies, GP lists and data from social services and data from
the LEA. The council argues that this provides a more accurate
picture of migration into the borough and helps in the allocation
of resources.
Nevertheless, using the data available, the following picture
emerges for North Staffordshire and Crewe and Nantwich.
WRS data for end Q1 2006 indicated that 2534 applications
had been made in Staffordshire of which 1525 originated in Stoke
on Trent and 155 in Newcastle. Table 2 provides a breakdown of
WRS applications by nationality The applications from A8 workers
were allocated as follows
Table 2
WRS APPLICANTS IN STAFFORDSHIRE (END QUARTER 1, 2006)
BY NATIONALITY
Nino data provides a better picture of the relationship between
A8 workers and those from other nationalities, highlighting the
need to consider a wide range of migrant groups and the interaction
between such groups. Table 3 below outlines the Nino data for
Stoke-on-Trent and Crewe & Nantwich between 2002-06 (2002
being the first date when data on the NI applications from foreign
nationals was collected)
Table 3
NINO DATA FOR STOKE-ON-TRENT AND CREWE AND NANTWICH (2002-06)
|
| Stoke on Trent | n
| % | Crewe and Nantwich
| n | %
|
|
| Pakistan | 630
| 10.9 | Poland
| 1,430 | 55.0
|
| India | 560 |
9.7 | Portugal
| 190 | 7.3
|
| Poland | 550
| 9.5 | India
| 120 | 4.6
|
| Iraq | 550 |
9.5 | South Africa
| 90 | 3.5
|
| Philippines | 410
| 7.1 | China
| 70 | 2.7
|
| Slovak Republic | 280
| 4.8 | Slovak Republic
| 70 | 2.7
|
| Sri Lanka | 190
| 3.3 | Germany
| 50 | 1.9
|
| China | 190 |
3.3 | Philippines
| 50 | 1.9
|
| Zimbabwe | 170
| 2.9 | |
| |
| Total | 5,790
| | Total
| 2,600 |
|
|
The data indicate the different migration patterns to the
two neighbouring conurbations. While migration into Crewe and
Nantwich has been dominated by Polish migrant workers, the picture
for Stoke-on-Trent is more mixed, reflecting, in part, families
joining settled BME communities, a larger international student
body, direct recruitment into the NHS to address shortages, the
settlement of refugees in the city, and the recent migration of
Polish and Slovak workers.
3. In what sectors and occupations are migrants employed—How
does this differ from local workers?
The CIPD survey of local employers indicated that migrant
workers from different groups were employed across economic sectors
(as illustrated by Table 4 below). However, notwithstanding the
direct recruitment of workers into the NHS, the majority of migrant
workers in North Staffordshire appear to be concentrated in industrial
sectors. The survey of 86 migrant workers, attracting responses
from a wide range of access points, indicated that close to 70%
of workers in food processing, manufacturing and warehousing,
logistics and transport.
Two further findings emerge from the surveys and the interviews
conducted with employers and migrant workers. Firstly, there would
appear to be a degree of labour market segmentation, with migrant
workers (notably refugees and A8 workers) finding it hard to acquire
jobs that reflect their qualifications, skills and experienced
gained in their country of origin. While language might be an
explanatory factor here, this would appear to be the case for
those fluent in English too, highlighting perceptions amongst
local employers of which jobs are "migrant jobs".
Secondly, it is clear that the use of migrants have been
used, in part, to address labour shortages. However, there is
a picture emerging from the research which suggests that A8 migrant
workers are being recruited in place of refugees, and to a lesser
extent indigenous workers. This reflects the prevalent idea amongst
employers that A8 workers are generally more reliable and productive
than indigenous workers, easier to employ that refugees (in terms
of questions of legality) and less militant that other groups
of migrant. The extent to which job competition exists is reflected
in the economic structure and qualification levels outlined above.
Table 4
THE UTILISATION OF MIGRANT LABOUR BY SECTOR
|
| Firms employing:
|
| Sector | EU
Accession
Migrants
| EU
Migrants |
Refugees
& Asylum
Seekers
| Outside
EU |
Foreign
Students |
Total
number of
firms
employing
migrant
workers
| Total
Firms
surveyed
|
|
| Agriculture | -
| - | -
| - | -
| 0 | 1
|
| Construction | -
| - | -
| - | -
| 0 | 2
|
| Retail | 3 |
3 | 2
| 4 | 3
| 4 | 6
|
| Manufacturing | 5
| 7 | 2
| 3 | 4
| 10 | 15
|
| Education | 1
| 1 | -
| 2 | 1
| 2 | 2
|
| Health | 1 |
- | 1
| 2 | 1
| 2 | 3
|
| Financial & Legal | -
| 1 | 1
| 3 | -
| 3 | 8
|
| Local/Central Government | 3
| 3 | 2
| 4 | 2
| 6 | 13
|
| ITC | 2 |
4 | 1
| 2 | 1
| 4 | 8
|
| Transport & Distribution | 1
| 1 | -
| 1 | 1
| 1 | 2
|
| Hospitality | 1
| 1 | -
| 1 | -
| 1 | 1
|
| Other | 2 |
4 | 2
| 5 | 2
| 7 | 12
|
| More than one sector | 1
| 2 | 1
| 2 | 1
| 2 | 5
|
| Total | 20
| 27 | 12
| 29 | 16
| 42 | 78
|
|
One disturbing finding of the research to emerge relates
to the future training and employment of young workers. Interviews
with employers that utilised skilled workers, indicates a willingness
to recruit skilled, and comparatively cheap, workers directly
from abroad, rather than invest time and money in training young
indigenous workers. The most recent NEET (not in education employment
or training) data for Crewe and Nantwich would appear to provide
an early indication of a more wide-ranging application of such
strategies.
4. What impact has immigration had on the labour market,
including wages, unemployment and working conditions of the UK
Workforce? Does the impact differ between skilled and unskilled
workers?
The research conducted for the Low Pay Commission found little
evidence of widespread contravention of the National Minimum Wage,
and this has been a finding that has been confirmed by the subsequent
research. Nevertheless, that should not hide the fact that employers,
notably agencies have used deductions from salary for a variety
of reasons, notably, accommodation to significantly reduce the
pay of migrant workers. The following case, which was supported
by contractual information highlights the worse forms of exploitation
possible.
The final EU accession worker interviewed was an unskilled
Polish male worker who had arrived in the UK in 2005. He had migrated
to the UK because he believed that there were few opportunities
in Poland for him, notably in his region of Poland that was characterised
by high levels of structural unemployment. He had arrived in Staffordshire
because he had been offered work through an international agency.
He had paid a total of £450 to the agency to cover flights,
a deposit and the WRS. This money he had borrowed from friends
in Poland.
He was initially employed by the agency in the same mobile
phone repair company that the previous two Polish workers had
worked at for one day. He worked a 60-hour week on a production
line that was completely populated by migrant workers, mainly
EU accession workers. He signed an opt out from the 48 hour working
week and was guaranteed a net payment of £4.50 an hour for
the first 40 hours of the job, with the rest paid at a net overtime
rate of £5.25. His contract, which he provided to the researchers,
indicated that the net pay rates were those payable to the worker
after tax and national insurance, and also after the agency had
deducted expenses incurred `by virtue of your choice of having
[the Agency] facilitate your accommodation and transportation
to and from work during your assignment.' The agency also deducted
£50 from the first month's wages as a deposit for staying
in the accommodation.
The subsequent experiences of the worker highlight the possibility
for exploitation of migrant workers. He was housed in accommodation
within walking distance of the firm where he worked, yet he still
had to pay transport costs (although none was provided). Four
workers were housed in a two-bedroom house and were forced to
share a bed, for which they each paid £70.00 per week rent.
Within the factory he did not receive proper training and the
agency employed a liaison supervisor, whose job was effectively
to act as a gatekeeper between the migrant workers and the British
line management. Given the different nationalities of migrant
workers in the plant, the supervisor was unable to support many
of the workers employed there.
The worker was befriended by a local family and he tried
to examine some of his terms and conditions in more detail. He
had been advised by the agency supervisor to throw away any letters
from the Inland Revenue and following his request about obtaining
a national insurance number, he was immediately relocated to another
mobile phone repair company in Banbury and threatened with the
sack if he did not move immediately. When his British friends
tracked him down to Banbury, he was relocated to Essex to work
as a picker in a warehouse. At this time his contract was revised
(and back dated) with the net pay rates had reduced to £3.50
per hour and the overtime rate to £4.25. Again he provided
evidence of the contractual changes. In addition, he claims that
the hours threshold for overtime payments was also increased.
He was also charged for damage to the property in which he was
housed in Essex, although it had been in that state of disrepair
on his arrival.
At this stage he decided to leave the agency, losing his
housing, and also the return flight that he had paid the agency
for before departing for the UK, due to breach of contract. He
returned to North Staffordshire and was able to gain direct employment
with the same mobile repair company. Before being offered employment,
the worker claims that employers checked a blacklist provided
by the agency, but fortunately, they had mis-spelt his name on
this list and he was offered a post. He moved to a second production
line within the same workplace which contained a few British workers
and a range of migrant workers from outside of the EU. He also
moved into private accommodation.
It was quite clear that the worker had little, if any, knowledge
of his employment rights, despite support from the local family.
The workplace was non-unionised, and he had no knowledge of trade
unions, he received no support from the agency and had, on one
occasion, approached the police about non-payment of the minimum
wage, who advised him to refer the case to the Inland Revenue.
(French and Möhrke, 2006: 56-7)
While the direct accommodation of migrant workers by employers
appears to be declining, reducing some scope for deductions, it
is clear from the interviews conducted with migrant workers that
few, if any, have anything more than a rudimentary knowledge of
their rights. Informal discussions with fellow migrant, "gut
feelings" and past experience in their home country seem
to be the main guides for A8 workers, who usually work for agencies
in non-unionised organisations. Thus, the true extent to which
migrant workers' terms and conditions are being under-cut is unclear.
It is also difficult to ascertain from our research methods
the extent to which migrant workers have impacted upon pay levels,
as employers have been unwilling to discuss pay interviews. Nevertheless,
recent interviews with agencies indicate that there is an expectation
that profit rates will fall as employers seek to use the supply
of migrant labour in the local labour markets to hold down the
payments made to agencies subsequent to the rise latest rise in
the National Minimum Wage. More importantly, there is evidence
that migrant workers are utilised by employers for unsocial, shift
work, often without receiving additional premia, while a proportion
of the migrant workers surveyed also work, apparently voluntarily,
a working week in excess of 48.
In summary, therefore, there is some limited evidence from
the research into this area, that migrant workers have altered
the operation of the labour market. Employers appear to be capitalising
upon the perceived reliability and hard-working nature of A8 migrant
workers. Given the general expansion of work in the area through
the establishment, in particular, of distribution centres, and
given labour market churning, it is unclear of the impact upon
employment, though there is some evidence to suggest the substitution
of refugees and some indigenous workers. In terms of pay, that
would not appear to be widespread undercutting of the National
Minimum Wage by employers, and it is frequently in NMW sectors
that a large proportion of migrant workers are employed in this
area. However, it is uncertain whether improvements in productivity
are being achieved exclusively by a more reliable, and possibly
higher skilled, workforce of A8 workers determined to maximise
income (less absence, longer working hours), or whether such gains
are achieved by holding down wage levels and utilising migrant
workers for unpaid unsocial work. Given the unwillingness of employers
to discuss these issues, and the lack of knowledge of migrant
workers, the methods used in this study cannot produce a conclusive
answer, although it is clear that some employers have sort to
reduce unit labour costs through the latter approach.
5. How has immigration affected public services such as
health care, education and social housing? How does this differ
across the country?
These issues are only beginning to be addressed in North
Staffordshire. In Crewe and Nantwich, the council have acted as
a lead organisation in promoting the integration of polish migrants,
establishing a local Polish Associations and co-ordinating information
provision about local services. It would appear that the age profile
of the Polish population means that they are less reliant upon
the health system, though maternity provision is an increasing
issues, but that the main problem has been the provision of support
in the school system.
A recent report on the housing of A8 workers in North Staffordshire,
commissioned by Renew, is due out shortly.
It is also important to highlight that the responsibilities
for migrant workers may be shard across authorities, especially
where migrants are employed in food processing sectors. In one
case, we found primarily Slovakian workers housed in Stoke-on-Trent,
while employed by an agency in Newcastle-under-Lyme, and bussed
out to Market Drayton, Winsford and Wrexham to work. With long
working hours, and the complexity of
6. How can data on immigration be improved? How far have
"inadequate data" affected public policy?
See the answer in relation to Crewe and Nantwich above (point
2). It is clear that an underestimation of the numbers of migrant
workers has budgetary implications for local authorities as well
as impacting upon the provision of services. However, it is also
the case that the freedom of movement enjoyed by A8 workers (compared
to other categories of migrant workers employed on different work
schemes) means that planning such service provision is difficult,
irrespective of data. In Crewe the recruitment activities of one
agency effectively changed the population profile of the town
with direct recruitment of Portuguese and subsequently Polish
migrants.
8 October 2007
34
A further 30 surveys from Polish workers in and around Crewe have
yet to be analysed. Back
|
