UK migrant flows starting to reverse?

Migrant flows starting to reverse

There are signs that the huge inflow of migrant workers predominantly from eastern european countries which has boosted the effective UK labour supply in recent years is starting to go into reverse.

The Financial Times has reported that

“The number of Polish and and other central and eastern migrants registering to work in Britain fell by 9 per cent last year according to official figures published last month by the Home Office. A total of 796,000 workers from the 2004 accession countries, two-thirds of them from Poland, have registered to work in the UK since 2004 - far more than the government had expected. But official figures do not reveal how many may have returned home after working only a short while.”

What are the push and pull factors causing this flow to change direction?

A closing of the relative wage gap: Improved wages in Poland and other eastern EU countries - there has been a sharp acceleration in wages in these countries caused by strong economic growth and their own labour shortages. Since Poland’s accession to the EU in May 2004, the country’s average monthly wage has increased by 10 per cent each year to 3,000 zlotys, rising to 4,000 in the cities. People on British minimum wage currently earn about £1,100 per month, before tax, which is equal to 5,000 zlotys.

The demand for labour is rising in countries such as Poland partly from a surge in capital spending on infrastructure for example the investment in stadia and other facilities for the 2012 European Soccer Championships.

The pound has been depreciating against the Euro and against the currencies of Europe’s new member states - the Polish zloty has increased in value from 6.11 to the pound in 2006 to 4.6 today.

The rising cost of living in the UK not least high transport fares, rents and food prices

Many of the migrants who came into the UK post May 2004 were only planning to stay for a short while - to earn higher wages, improve their English and perhaps gain extra qualifications. Some migrants have come to the UK with high level qualfications and have been unable to find work commensurate with their skills and background, creating some disillusionment and a fall back of working at lower wages than expected

The possible drain of migrant workers will be bad news for the UK farming and food processing industry which has come to rely on employing thousands of migrant employees in the farms, fields and food factories. Home-based workers seem very reluctant to take these relatively low paid jobs. The construction sector is also likely to be affected as will the hospitality industry, transport businesses and also the National Health Service and Care Homes.

In December 2007, the UK government announced that unskilled workers from non-EU countries would be banned from taking jobs in the UK for the “foreseeable future”. An Australian-style points system for economic migrants is being introduced.

BBC: What if all the Poles went home?