The U.K. Needs Low-Skilled Migrants

(Bloomberg Opinion) -- If there’s been any good news in the chaotic race to replace Theresa May as U.K. prime minister, it’s that the two finalist candidates want to get rid of her draconian caps on immigration. The problem is that they want to keep another policy that makes even less sense: virtually eliminating low-skilled migrants.

Both Boris Johnson and Jeremy Hunt have vowed, if elected leader of the Conservative Party later this month, to abolish May’s longstanding pledge to reduce net migration to less than 100,000 entrants a year. That’s progress of a kind: The target was neither achievable nor desirable.

It was, however, expedient. Immigration was a major factor behind Britain’s vote to leave the European Union in 2016. A migrant crisis in Europe the year before, combined with years of domestic austerity, low productivity, and wage stagnation, had left many Britons feeling unsettled and in some cases looking for a scapegoat. Immigrants were blamed for dead-end jobs, cultural change, housing shortages, crime rates and more.

Thankfully, public attitudes have since shifted. Worries about immigrants declined sharply after the referendum, and there’s broad agreement that they’re needed to fill certain jobs. Only about a quarter of Britons say they oppose migrant care workers for the elderly, for example, while 76 percent support them working at the National Health Service. In any event, Britain’s net immigration has come down significantly: to 258,000 from 336,000 before the vote.

Even so, May announced in December that the government would go ahead with plans to severely restrict new low-skilled immigration. Over the objections of some of her own cabinet ministers, she proposed a requirement that immigrants make at least 30,000 pounds a year to qualify for a working visa. That would bar more than three-quarters of EU nationals currently employed in the U.K.

The rationale for such a threshold is, like May’s overall cap, more political than economic. Low-skilled migrants don’t pose a significant threat to British workers; a report last year from the independent Migration Advisory Committee concluded that they had little effect on either wages or employment for the native-born. Other research has found that they have a negligible impact on the provision of education, health services or welfare benefits.

These workers are, however, invaluable to the broader economy. With Britain aging and very close to full employment, there aren’t enough qualified local workers in many industries to satisfy demand. By one estimate, service-sector employers will face a shortfall of 1 million workers within five years, and twice that over a decade. The hospitality industry, which relies on EU nationals for up to a quarter of its workers in some areas, will be especially hard hit. Many labor-intensive businesses, such as restaurants and health-care services, will have difficulty making up for these needs with increased automation or improved productivity.

A looming labor shortfall could also impede public services. One of the NHS’s many problems is a shortage of workers at all levels, including some 40,000 nursing vacancies. If Britain is to launch a major house-building push, as it should, it will need carpenters and other specialized construction workers who may not count as “high-skilled” under the new definitions. The Russell Group of leading universities said the salary threshold would make it difficult to fill many teaching and scientific jobs.

Trying to lure skilled migrants, as May and her would-be successors say they want, surely makes sense. But there’s no reason that doing so must come at the expense of nearly all the less-skilled aspirants who want to contribute to Britain’s economy. Far better to modestly tilt the system in favor of the most talented while enacting preferences for industries most in need of the low-skilled.

Imposing an overall salary threshold, by contrast, is the kind of reductive thinking that led to May’s ill-advised cap in the first place. It will prove a major handicap for her successor once in office — and for everyone else, too.

Editorials are written by the Bloomberg Opinion editorial board.

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