Plans for a crack-down on firms undermining minimum wage
Labour leader Ed Miliband pledges to end the “epidemic” of worker exploitation by establishing a task force to target companies who encourage low skilled migration and undermine the minimum wage in the UK.
In a speech on immigration, the Labour party leader said this Home Office-based unit would penalize firms who exploit low paid workers with heavy fines. The unit would consist of teams from the Gangmasters Licensing Authority and specialist police units with extra Home Office staff.
Miliband has outlined his principles on immigration, including his pledge that a Labour government would “end the undercutting of wages of local workers through the exploitation of migrant workers.”
Steve Murphy, general secretary of the building workers union Ucatt, said: "This commitment demonstrates that Labour is serious about ending the misery caused by the exploitation of migrant workers and rightly targets the employers who profit through the mistreatment of workers."
The current coalition government has already increased penalties on employers who pay less than the legal minimum and has placed a cap on non-EU migration.
IZA World of Labor author Madeline Zavodny has written about how a minimum wage affects immigrants and native citizens. She states that “studies reach disparate conclusions on whether higher minimum wages attract or repel immigrants,” and that “compliance with minimum wage laws does not appear to be lower for immigrants than for natives.”
The issue of immigrant labor depressing the wages of native workers is a contentious issue covered by Giovanni Peri. He claims that 30 years of empirical research provides very little evidence that immigrants reduce wages by competing for jobs with native citizens, and that the “short-term wage effects of immigrants are close to zero.”
Read more here.
Related articles:
Who benefits from the minimum wage—natives or migrants?, by Madeline Zavodny
Do immigrant workers depress the wages of native workers?, by Giovanni Peri