Have British jobs gone to British workers?

Welcome to Reality Check. Today I’m looking at whether Labour has created “British jobs for British workers” since 1997.

One of the most contentious parts of the debate on immigration is the effect on jobs.

Famously, Gordon Brown talked about creating “British jobs for British workers”. But shadow immigration spokesman Damian Green says the statistics show that Labour “has left British workers in a worse position than when he took office 13 years ago”.  The UK Independence Party and the British National Party also often focus on the economic impact of immigration: on wages, productivity and jobs.   So what’s the truth? We’ve been using Office of National Statistics (ONS) data to create a new set of numbers which casts some light on this difficult debate. It’s not the whole truth – as usual, there are plenty of health warnings and caveats.

This analysis doesn’t begin to resolve larger questions about the impact of immigration on our society – or the wealth of the nation as a whole. But in the debate about immigration and jobs, it’s a big step in truth’s direction.

Job number rise

Start with an easy one: how many of the new jobs created in the UK since 1997 have gone to “foreigners”?

The pedantic answer is we can’t possibly know – there is no exact record of the jobs created since 1997, still less a register showing who those jobs went to.

But of course, we can look at the number of jobs held by British-born and non-British born people – and see how each number has changed since Labour took power.

The data show that the number of jobs in the UK has risen by 2.12 million since the first quarter of 1997. At the same time, the number of UK-born people in work has risen by 385,000, and the number of non-UK born in work has risen by 1.72m.

So, roughly speaking, you can say 81% of net jobs created in the UK since 1997 have gone to people who were not born in the UK.  Of course, many of the non-UK born workers might be British citizens – they might also have been in the country for decades. That is one big caveat to the numbers which we can’t do anything about.

I should also say, for complicated reasons, we’re not including workers over the legal retirement age. But that shouldn’t change the picture dramatically.

Ageing population

So, on the face of it, UKIP and the Conservatives are right to talk of a shortage of “British jobs for British workers” – the vast bulk of net job creation since 1997 is accounted for by workers not born in the UK.

But Britain is an aging society: our population isn’t growing very fast. It’s worth asking whether there were, in fact, British workers available to do all those new jobs. That is where our new data set comes in.  We’ve estimated what happened to the number of UK-born, working age people in Britain since 1997. It turns out that it has only risen by 348,000 since 1997. Whereas the non-UK born, working age population has risen by 2.4 million.

For some, that large number will confirm that Britain has been “swamped” by foreigners over this period. But it is worth noting that on these estimates, people not born here have actually been less successful at finding formal employment than the people that were.  On balance, the number of jobs for British-born people has risen by more than the rise in the British- born population of working age since 1997. Whereas only about 73% of non-UK born people entering the workforce have found a formal job.

I suspect the clue is in the word “formal”. Many of the others may have found jobs that don’t end up in the official statistics.

Recession impact

Still, it looks like there’s been net job creation for “British workers” since 1997. In fact, the employment rate for UK-born people of working age at the end of 2009 was 0.4% higher than at the start of 1997.   The recession has made a big dent on that number. At the start of 2008, the UK-born employment rate was 2.4% up on 1997 – and the number of “British jobs for British-born workers” had risen by nearly 950,000 since Labour took office.

However, it is true that workers not born in the UK have been much less affected by the downturn: in fact, the number of non-British born people in work has actually risen by about 16,000 since the recession began. And, though we hear about large numbers of Central and Eastern Europeans going home, the non-UK born population has risen since the recession began – by another 200,000.

So, to recap: workers not born in the UK have been the beneficiaries of the bulk of net job creation since 1997.  But the UK-born population did not rise in line with the number of new jobs, and a person of working age who was born in the UK is actually slightly more likely to be in work today than they were in 1997, though the recession has hit them much harder than workers who were born elsewhere.

Low birth rate

But there are two more pieces of the jigsaw: emigration, and what has happened to UK-born unemployment and inactivity. The numbers let us say something about the first piece – so far we’ve having less luck with the second.  One reason why the native working age population did not rise very much after 1997 is that the British people weren’t having many babies in the late 70s and 80s, when the new workers of the 90s and noughties were born. But another reason is that large number of British-born people have left the country.

Since 1997, there has been net migration out of the country by 988,000 British-born people. Put it another way – for every net job created for British born people in the UK since Labour took office, two and a half people who were born here have left the country.

Unfortunately, we don’t have an age breakdown for these migrants. Only some of those people will have been seeking work; many are likely to have been going abroad to retire. Those people wouldn’t have been in the market for a job. But critics of Labour’s policy may think that number makes for a good headline.

Finally, UKIP and others might say we’re missing the point. They would say it’s all very well to compare the rise in the working age population with the rise in people in work.  But there were millions of British-born people who were unemployed or economically inactive in 1997. In their view, immigration has helped to keep those people out of work.

Wage levels

Here’s the argument – because employers could fill vacancies using East Europeans, they weren’t forced to train up British-born workers to do the job – or tempt them into the workforce with higher pay.  That is actually what Gordon Brown first talked about, shortly before becoming prime minister: “Training British workers to do British jobs.”

Many economists would say that there wasn’t a fixed number of jobs in the economy, to be allocated between foreigners and the native-born. Whether employers create jobs depends on the productivity of the workers on offer – and the wage.  In the absence of all those hard-working, cheap immigrants, it’s possible that a good share of the jobs created since 1997 might not have been created at all.

If the economists are right, that would still mean that immigration had helped keep wages lower than they would otherwise have been, at least for the workers who compete with these new arrivals.  National income would definitely be higher as a result of immigration, and probably living standards (income per head) as well, though that increase is probably much smaller because there are now more “heads”.

We’ll never be sure which side is right on the economic costs and benefits of mass immigration. We can’t rewind to 1997 and play the tape again, only this time with tighter controls. And, unfortunately, we haven’t been able to get data on the nationality or birthplace of the millions who are neither in work or formally unemployed (we’re still looking).

But we can say that the vast bulk of net job creation since 1997 appears to have benefited workers not born in the UK.  On balance, job prospects for British-born people have risen slightly since 1997, but those workers have been hit much harder by the recession than workers born outside the UK.

And the increase in jobs for native-born workers has been dwarfed by the number of British-born people, of all ages, who have left the country.