From the TUC

What causes migration: skill shortages or stingy employers?

19 Feb 2010, by in International, Labour market

There are many causes behind migration. One of the commonest cited is skill shortages. But as liberal economists argue, that’s often a misnomer. All that is in fact happening is a wage shortage: raise the wages and sufficient skilled workers will appear. Today, the Chartered Institute of Personnel and Development (CIPD) and KPMG have issued a report today which suggests the liberal economists are right. They say that employers facing skill shortages would employ more British workers if they could pay them less (rather suggesting the skills are available, but at a price employers don’t want to pay).

Exploiting migrant workers to undercut the existing workforce simply sets worker against worker. And whilst employers may benefit in the short run from lower wage costs, the BNP are more likely to be the long term beneficiaries.

Instead, unions have been arguing that paying migrants the same as the existing workforce (and giving them all the other rights we have won over the years) is the best way to combat exploitation, undercutting and racial strife. The national minimum wage has had some effect in making undercutting less possible, but the CIPD take potshots at that, too.

Launching the report, Gerwyn Davies, the CIPD public policy adviser said:

“Despite rising unemployment, employers are still struggling to recruit the people they need and we are turning abroad to plug the gap. … To help minimise further outsourcing of jobs abroad, the government needs to do all it can to curb rising wage costs.

“A good start would be abandoning the national insurance contribution increase, planned for 2011, as well as enforcing a real-terms freeze on the National Minimum Wage for adults and an absolute freeze for younger workers between the ages of 16-21.”

One Response to What causes migration: skill shortages or stingy employers?

  1. Andrew Curry
    Feb 21st 2010, 12:17 pm

    One of the several interesting things about this argument is the waving of the ‘outsourcing’ flag as a reason for action. There’s some evidence to say that the outsourcing trend has reached limits, and may even bw on the turn. In the production sector, it’s too exposed to changes in energy costs. In the (customer-facing) service sector, customers hate it (and there are costs to business as a result). The world’s quite a lot less flat that it looks.