Over the past 15 years, free movement from EU countries has been the largest source of labour migration to the UK. When it comes to low-wage jobs, in particular, there are few options for non-EU citizens to get a work visa in the UK, and employers have relied on growing numbers of EU workers in jobs such as cleaning, waiting tables, warehousing and food processing.
Under current government plans, free movement will come to an end after Brexit — or at least, after the post-Brexit implementation period that is currently scheduled to finish at the end of 2020. The government has not said what — if anything — will replace it. Indeed, there is no consensus on whether dedicated labour migration routes into low-skilled jobs are economically necessary at all.
Nonetheless, based on what the government has said about its plans so far, it seems likely that at least some new form of labour migration regime, permitting low-skilled work, will be introduced after Brexit.
What are the options?
If the government wants to create a dedicated labour migration route for low-skilled work after Brexit, it has two main options that are not mutually exclusive.
The first option to expand the Youth Mobility Scheme (YMS) to the EU. The scheme currently allows citizens of Australia, New Zealand, Canada and a handful of other countries to come to the UK for no more than two years and lets them work in jobs at any skill level.
The government has already said in its Brexit White Paper that it wants to do this, negotiating a reciprocal deal with the EU. YMS is, in theory, not designed to be a labour migration programme, but rather to promote cultural exchange. That said, it is clearly used as a labour migration route in the UK and many other countries.
The second option is to introduce a work-permit scheme for some or all low-skilled jobs. Work permit schemes allow employers to sponsor workers to come to the UK for a specific job, if they meet the (often extensive) criteria.
These have operated in the UK before in low-wage occupations: a scheme for seasonal agricultural workers existed for over 60 years before its closure in 2013, for example. When the government announced that it was closing the programme it explicitly linked this to the fact that EU workers were available to fill the jobs.
Importantly, the youth mobility scheme, and most of the precedents for work-permit programmes in low-skilled jobs, are strictly temporary, providing no path to permanent settlement.
Should migration be channelled towards particular jobs?
One of the key differences between YMS and work permits is that work permits are for a specific job, whereas YMS workers can choose (almost) any job. This distinction ends up being quite important.
First, work-permit schemes allow the government to target labour migration towards particular occupations. For example, it may decide that it is only really concerned about the need for migrant workers in a few areas of the labour market, such as agriculture or perhaps social care. If so, it can use work permits to target those positions without opening the rest of the low-wage labour market to labour migration.
However, this targeting also has drawbacks. The same feature that enables work-permit schemes to focus on particular parts of the labour market—the fact that a worker is tied to a specific job—makes it harder for workers to leave exploitative employers. From the workers’ perspective, YMS has a clear advantage in that it offers individuals the right to move freely between employers.
At the same time, employers often see sponsorship—which is required for work permits but not YMS—as a burden due to the cost, delays and paperwork it involves. And work permit schemes require the government to do a certain amount of ‘central planning’, deciding which industries are eligible rather than making employers compete with each other for staff in a normal labour market setting.
Can exploitation in low-skilled worker programmes be prevented?
Low-wage or low-skilled jobs are the part of the labour market where the risks of exploitation are thought to be concentrated. Labour abuses (such as minimum wage violations or failure to meet the terms of a contract) are by no means only a problem for migrant workers, although migrants are generally assumed to be at higher risk due to factors such as language barriers, lower local knowledge and immigration status.
Whatever type of programme the government chooses, addressing the risk of exploitation in any future low-skilled work route is likely to be extremely difficult.
On one hand, there is some evidence that the ‘employer tie’ in work permit schemes can lead to lower wages for some workers and may increase the risk of exploitation for the more vulnerable.
On the other hand, the fact that work-permit programmes are heavily regulated could in theory improve life for some participants, by setting minimum requirements for pay or employer-provided accommodation. But this, of course, depends on effective enforcement of labour standards — something to which the UK has traditionally dedicated relatively limited resources.
The views expressed in this analysis post are those of the authors and not necessarily those of the UK in a Changing Europe initiative.