Will the global financial crisis and ‘credit crunch’ see a fall in demand for overseas migrant workers?
With the world’s banking system in crisis and western economies heading into recession, Immigration Matters examines the likely effects on migrant workers in the UK.
Migrant workers most likely to be directly hit by the downturn include those employed in the Banking and Finance and IT sectors, which employ many thousands of highly paid overseas staff in the City. Thousands of British and ex-pat workers have already lost their jobs in the City as American and UK banks scale down operations or go out of business.
The healthcare industry has recruited tens of thousands of overseas workers during the last 10 years including Nurses, Doctors, Senior Carers and Healthcare Assistants. Hospitals and Care Homes would not survive without Filipino, Indian and African staff.
Healthcare workers providing essential services, funded by the Government, are far less likely to be directly affected by a recession. The UK’s population is still growing, and coupled with an ever expanding elderly population, the demand for hospitals and care facilities will continue to grow.
In addition, there is still a shortage of care workers in the private and public sector with thousands of shifts going unfilled in NHS Trusts every day.
Last week I received requests for Senior Care Workers and Health Carer Assistants (HCA’s) from a major care group and NHS approved Agency staff suppliers desperate for more staff.
The head of an agency supplying HCA’s to NHS Trusts all over the UK told me that if he had the staff he could fill over 500 shifts a day. He will willingly take students, with a nursing background, currently enrolled on NVQ Health and Social Care courses on student visas.
There are currently over 12,000 health care job vacancies advertised on the Government agency’s Job Centre Plus website alone.
In recent years, health sector employers have been forced to recruit overseas workers to do the jobs most British people did not want, either because the locals did not need to work or because higher paying jobs were always available. Traditionally, this trend does change dramatically during a recessionary period. In particular, women look for full or part time work locally to supplement their partner’s reduced income.
Students looking for part time work may find it harder to land jobs during a downturn, although there seems to be no shortage of job vacancies in the catering and hospitality industry.
128,000 vacancies on Job Centre Plus website
128,000 vacancies on Job Centre Plus website
A quick search on the Job Centre Plus website revealed just under 22,000 job vacancies advertised in the last month, for work in bars, restaurants and hotels all over the UK.
There are over 16,000 job vacancies in the security, transport and cleaning sectors, and a further 8000 in the construction industry where demand for workers is set to outstrip supply in the run up to the 2012 London Olympics.
Overall, 128,000 vacancies are advertised on the Job Centre’s site, which is by no means the only recruitment medium used by employers.
Reed.co.uk has 159,000 vacancies on its job site, including 6000 in health and social care and 25,000 in Accountancy and Legal.
Indirectly Affected Workers
Some jobs could be indirectly affected by a recession. For instance, many Domestic Workers are employed by City high flyers. With thousands of jobs set to go in London’s financial district, some overseas workers could suffer the knock-on effect of their employer being laid off. On the other hand, demand for a reliable Domestic Worker, usually on a Domestic Visa, is extremely high.
In some respects migrant workers have less to lose than their British counterparts. Many workers send much of their money back home to support their families or invest in land and property, and I have yet to receive an enquiry from an ‘Icesave’ victim.
Most migrants who have arrived in the UK during the last five years will not yet have bought their own property, so will not have to worry about a huge mortgage hanging around their neck. Indeed, the collapse in property prices will be welcomed by ‘first time buying’ migrants looking to get on the property ladder.
Credit card debts and Personal Loans could cause problems
Whilst migrant workers may not be saddled with a mortgage, they are highly likely to be in debt with personal loans, overdrafts or credit cards. This fact is evident from the number of bank statements we see from candidates applying for Work Permit and Visa Extensions, Further Leave to Remain (FLR), Indefinite Leave to Remain (ILR) or British Citizenship.
Immigrants are constantly surprised by the staggering amount of credit on offer to all and sundry in the UK. Coming from countries like the Philippines, for instance, where credit cards and unsecured loans are not freely available, many overseas Filipino Workers (OFW’s) are tempted by readily available credit.
A manager at one of the London branch of a leading Philippine bank told me last year that he was concerned at the level of personal debt which OFW’s, such as Nurses, Senior Carers and Domestic Workers, were getting themselves into.
He said that whilst his bank lent conservatively and would not allow their customers to take on more than they could afford, British and American banks were literally “throwing money at them regardless of the amount owed on existing loans and cards”.
Loans on “easy terms” are hard enough to repay during the good times, let alone when one or more in the family loses their job or the overtime dries up.
Whatever the economic climate, the vast majority of non-EU migrants are in the UK for the long haul, but this may not be the case for the million or so migrants from Eastern European countries such as Poland, many of whom have already started to return home.
Bulgarian and Romanian citizens, now part of the European Union, are still coming to the UK to exercise treaty rights. There are still restrictions on taking employment for the latest EU members, but Bulgarians and Romanians can exercise their right to start a business or study under the yellow card scheme.
Regardless of warnings of economic meltdowns, the UK will remain a popular destination for migrant workers and students. In the long run, the points based system, with Tier 2 starting next month, will probably do more to restrict migration than the state of the economy.