Yesterday, Theresa May said that Brexit would mean the end of ‘low-skilled' migration into the the UK and that EU migrants would not get preferential treatment. The University of Oxford estimates that there are about half a million migrants from the continent working in the UK in industries like cleaning and hospitality.
Making it more difficult to enter the UK is not the biggest threat to low-skilled migrants wanting to work in the country, though. Economists have warned about job losses and rising inequality due to rising automation and digitisation - and it is commonly expected that the workers who lack further education will bear the impact.
A report from the Migration Policy Institute (MPI) highlights the impact of the gig economy (Uber, Deliveroo, Task Rabbit), which is helping the low-end of the jobs market to grow at the same time as sectors like technology are experiencing labour shortages. Economists believe that this could lead to a highly polarised labour market, divided between few desirable, skilled and highly-paid jobs and precarious low-skilled roles.
The authors, Meghan Benton and Liam Patuzzi, imagine four possibilities for the future of the labour market.
The first is a worst-case scenario, with little government preparation for the sweeping changes that process automation and digitisation will incur. There will be a huge rise in informal work (the gig economy), leading to lower tax revenue; this, combined with an ageing population requiring higher pension payouts, will leave little money for investment in education or similar.
Second is digitisation having a smaller impact than forecast. The gig economy reaches a natural plateau and the government implements some regulations to support it. Third is a scenario where the government proactively plans for (and capitalises on) digital change, and implements some form of universal basic income.
Finally is the case where technology helps a large section of the population avoid unemployment by setting up their own businesses, with rising trust in online tools like LinkedIn and Github and a decline in the influence of educational and professional bodies.
Automation and other technological changes will doubtless impact the labour market in the coming years, requiring government oversight to ensure a positive outcome - and not the bleak picture depicted in the first scenario.
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