There is a significant public interest in how the UK Labour Market has been affected by the Covid -19 pandemic.
One of the highlights is how the percentage of the non-UK workforce or migrant workforce is changing
Movement of Non-EU workforce:
As per the Office of National Statistics, the UK for February 2021, of the 693,000 decreased payroll employees, 209,000 is from London. This statistics is since Feb 2020. 105,000 in the South East while only 7000 employees live in Northern Ireland. This kind of decrease in employment is the highest ever since Covid-19 struck the globe.
Data from Labour Force Survey (LFS) shows the unemployment rate continued to spike in smaller percentages than in recent periods. The employment rate continued to fall on the other hand.
An analysis of payroll employees and migrant workers shows a slight fall in the number of non-UK nationals employed.
The total number of job vacancies from December 2020 to Feb 2021 was 26.8% lower than a year ago.
The lockdown and continued restrictions due to the Covid-19 pandemic have significantly impacted the UK’s labour market. A cross-section of industries are affected, and more so the accommodation and food services industry.
Another interesting fact to bring to light is the drop in the birth rate of the non-UK population as against the rise in the numbers of newborns amongst the UK born population.
In addition to all this, the Real-Time Information tax data matched with the Migrant Worker Scan (MWS) gives additional insight and labour market analysis into the change in the migrant population. However, the statistics provide information about the payrolled employees in the UK labour market.
The Impact of Brexit:
With the advent of the Brexit policy, the UK’s unique approach to immigration treats EU and non-EU citizens equally. There is an exception for Irish folks. Anyone migrating to the UK to work, excluding Irish citizens, needs to apply for permits in advance to immigrate.
The highlight of the UK’s post-Brexit immigration policy is on high-skilled workers. Under the new points-based system, anyone migrating to the UK on work must meet a specific set of prerequisites. On meeting this requirement, they will be issued points. A minimum of 70 points is required in order to claim a visa, and visas are awarded to those who gain sufficient points.
The Centre for Economics and Business Research (CEBR), in analysis for the GLA, has estimated that London may lose £9.5bn a year in economic output because of Brexit. This number is more than 2% of London’s production. This is going to bring in a lot of uneasiness for every business in the UK as London is the financial Hubspot. This clearly indicates a rippled effect on the entire nation.
Some of the most recent changes made to the Brexit system prior to implementation, such as the deferral of the cap on migration, the abolition of the resident labour market test, the drop in salary and skills thresholds and the expansion of the shortage occupation list to include more construction industry jobs are a welcome move. However, the fact that there is no solution or workaround for unskilled workers is a serious concern. It may hamper the construction industry’s capacity to deliver on key projects within the assembled environment, including major civil engineering works, housing, office refurbishment, healthcare and social infrastructure, especially post-Covid-19.
Impact of Brexit on Sectors:
We are all aware that in the UK, there is significant dependence on EU nationals or on the immigrant population from the European Union to fill in positions in the domestic infrastructure, especially in the Construction industry, Food and Beverage manufacturing industry and in the majority of the businesses in Agriculture and Horticulture.
These sectors are characterized by the number of temporary workforces they employ in the labour market and the year around manpower; however, the seasonal workforce should not be considered alone for any analysis in isolation. This data would affect the entire supply chain. It is impacted by seasonal demands. Stakeholders would be dependent on this influx and outflux of the workforce before and after the seasonal waves.
A major concern for some of these industries is the ability to hire European nationals; however, with the new Brexit referendum in place, immigrants’ free movement from the European Union has come to an end by last year. The Construction Industry alone has one-third of London’s European Union population before the Brexit laws incorporated newly.
With the Covid-19 pandemic aftermath, Brexit, and so much more happening, UK at its heart still holds a lot of optimism about this path to economic recovery in the labour market. However, the path is unclear at the moment for many businesses.