Allowing asylum seekers to work could help UK labour shortage

Labour shortages have led to all sorts of ideas on how to drum up more staff. Perhaps prisoners could be ferried to factories and fields? Maybe mothers could work in abattoirs between dropping off and picking up the children from school?

Yet there are many people around the country who want to work but are banned by the government from doing so: asylum seekers waiting for a decision on their applications.

In the UK, asylum seekers can only work if they have waited for an initial decision for 12 months, and only then if they can find a job in an official list of “shortage occupations”, most of which are highly skilled.

In the meantime, they are put in government-provided accommodation and given £39.63 (€47.32) a week to live on, far below the government’s own definition of absolute poverty.

‘There could be far more fish in the sea if we just stopped fishing so hard’

---

Hybrid work weakens the bonds of corporate loyalty

---

Dispute over alleged €8.3m loss to pilots’ pension fund settled

---

Big number of Irish staff threaten to leave jobs over lack of face time

---

The UK stands out internationally for its reluctance to let asylum seekers work. In the EU, where the law specifies they must be allowed access to the labour market after a maximum of nine months, many countries have shorter periods, such as Sweden (immediate), Portugal (one month), Germany (from three months), Belgium (four months) and Ireland (six months). In Canada, asylum seekers can work immediately, and in the US they can do so after six months.

Pull factors

The UK’s approach, which dates back to the New Labour government in 2002, is based on the idea that allowing asylum seekers to work would create a strong “pull factor” that would encourage people to “lodge unfounded asylum claims in an attempt to avoid work visa rules”.

It sounds plausible, but the available evidence is weak: a review of international studies found no correlation between access to the labour market and choice of country for asylum. Other pull factors were more important, such as language and the presence of family and friends.

While the benefits of the employment ban are unproven, the same cannot be said of the costs. A number of studies show the longer an asylum seeker must wait to enter the labour market, the worse their long-term prospects of getting and keeping a job.

A German study found employment rates were about 20 percentage points lower for refugees who had to wait an additional seven months before they were allowed to enter the labour market. It took up to a decade for this employment gap to disappear.

Another study, which assessed almost 30 years’ worth of data from 19 European countries, found those banned from working also ended up in worse-quality jobs once the ban was lifted, reported lower language proficiency, had more health problems and were more likely to receive benefits.

In the language of economists, forcing people to sit idle causes a “depreciation of human capital”. Or, as a Syrian refugee put it to me, it leaves you “hopeless” and “kills your skills”.

On £39.63 per week, just buying a bus ticket to the library can mean having to skip a meal.

Application delays

The misery of this waiting period wouldn’t matter too much if the government made decisions on people’s applications quickly. Yet the share of applications completed in six months has dropped from more than 80 per cent in 2014 to less than 10 per cent, according to Oxford university’s Migration Observatory.

The number of people waiting for an initial decision has swelled from about 24,000 in 2014 to more than 80,000 today.

The pandemic hasn’t helped, but it isn’t the root cause, either. A report last year by the independent chief inspector of borders and immigration blamed the delays in part on poor staff retention of “decision makers” and outdated work processes such as a reliance on enormous Excel spreadsheets.

It said claimants who received a decision in 2020 had been waiting an average of 449 days. The Home Office now plans to recruit more “decision makers” and introduce a new digital case progression platform. But the backlog they face is huge.

Of course, allowing the people caught in this backlog to work wouldn’t solve the UK’s labour shortages, but it could help some businesses. An Organisation for Economic Co-operation and Development survey of German employers who have hired asylum seekers and refugees found that more than 80 per cent were broadly or fully satisfied with their work.

It is also an unusually good moment in the economic cycle for asylum seekers to find work: studies show they are sucked into jobs when labour markets are tight but struggle more than most when unemployment is high.

There are no simple answers to labour shortages and lower workforce participation in the UK. But there are some easy wins. If people want to work, we should let them. – Copyright The Financial Times Limited 2022