The contribution of EEA citizens to Scotland: response to the Migration Advisory Committee call for evidence - evidence annex

Chapter 2 – EU workers in Scotland's key sectors

Key insights

• EU nationals have a younger age profile than non- EU nationals and the Scottish population as a whole. A larger proportion (61.1%) of EU nationals living in Scotland are under 35 years of age, compared with 54.3% of non- EU nationals and 41.5% for Scotland as a whole.
• In 2016, there were 190,000 migrant workers in Scotland. 128,000 EU nationals aged 16 and over were in employment (comprising 5.0% of the total number in employment in Scotland) and 62,000 non- EU nationals (2.4% of the total number in employment in Scotland.
• The individual country nationalities which accounted for the highest proportion of the workforce in Scotland were: Polish ( 61,000 in employment ), Irish (14,000) and Indian (8,000).
• The employment rate for EU nationals was 76.8%, higher than the overall rate for Scotland (73.0%). Non- EU nationals had a lower employment rate, at 57.5%.
• For EU8 countries the employment rate was 82.4% compared with 70.7% for EU14, 73.3% for UK nationals and 57.5% for non- EU nationals.
• Around two-thirds of all EU nationals in employment in Scotland work in either Distribution, hotels and restaurants, Public administration, education and health or Banking, finance and Insurance. Nearly three quarters of all non- EU nationals in employment also work in these sectors.
• Over a third (36.7%) of EU nationals (aged 16-64) in Scotland have a degree level qualification or higher. This is greater than the proportion of UK nationals (16-64) in Scotland who have degree or higher qualifications (over a quarter at 27.6%) compared with 56.8% of non- EU nationals who have a degree level qualification or higher.
• 31.7% of EU nationals and 22.0% of non- EU nationals in employment who have degree qualifications were working in medium-low or low skill level occupations, compared with only 18.8% of UK nationals with a degree qualification who were in employment.

2.1 Economic activity

2.1.1 Employment rate

Key insight: In 2016, there were 190,000 migrant workers in Scotland, of whom around two thirds were EU nationals.

128,000 EU nationals aged 16 and over were in employment (5.0% of total employment in Scotland) and 62,000 non- EU nationals (2.4% of total employment. The individual country nationalities which accounted for the highest proportion of the workforce in Scotland in were: Polish ( 61,000 people in employment in Scotland), Irish (14,000) and Indian (8,000).

The employment rate for EU Nationals was 76.8% ^[5] , higher than the overall rate for Scotland of 73.0%. EU Nationals also had a lower unemployment rate (3.8% vs 4.8%) and a lower inactivity ^[6] rate (20.2% vs 23.3%) than for Scotland as a whole. Figure 2.1 shows that EU8 nationals in Scotland had higher employment rates when compared with UK nationals across all age groups. EU14 nationals had a higher employment rate than UK nationals for all age groups except 16-34 years (see Figure 2.1).

Figure 2.1: Employment rate by age and nationality group, Scotland, 2016

Source: Annual Population Survey, Jan – Dec 2016, Office for National Statistics

Non- EU nationals had a lower employment rate than EU nationals in all age bands. For those aged 16-64 years, the overall employment rate, 57.5%, is lower than for UK and EU nationals. This is true for both females (45.4%) and males (71.0%) employment rates.

Key insight: Self-employment rates were highest amongst EU 14 nationals residing in Scotland and non- EU nationals.

In 2016, 10.7% (14,000) of EU Nationals, in employment in Scotland were self-employed, although for the EU 14 countries alone this rises to 14.1%. This compared with 12.7% of employed UK Nationals who reported self-employment. The highest rate of self-employment, by nationality group, was amongst non- EU nationals (16.7%) with just over 10,000 of the 51,000 non- EU nationals in employment in Scotland reporting themselves to be self-employed.

2.1.2 Working patterns

Key insight: For EU nationals the employment rate is higher than for Scotland as a whole, for both males and females. The proportion of migrants in employment who worked full-time and part-time are broadly consistent with Scotland as a whole.

Around three quarters of those in employment were working full-time . By gender, employment patterns were also broadly the same, whether for the whole of Scotland, for EU nationals or for non- EU nationals: around 9 in every 10 working men and around 6 in every 10 working women were in full-time employment. However, as Figure 2.2 shows, for non- EU nationals the female employment rate was considerably lower compared with the female employment rate for Scotland overall.

Figure 2.2: Employment rates by gender and nationality, 2016

Source: Annual Population Survey, Jan – Dec 2016, Office for National Statistics
Note: Scotland refers to the entire population of Scotland rather than a specific nationality group.

2.2 Sectors

2.2.1 Industry sectors of employment

Key insight: Around two thirds of EU nationals (aged 16 and over) are employed in: Distribution, hotels and restaurants; Public administration, education and health; and Banking, finance and Insurance. Around three quarters of non- EU nationals in employment in Scotland work in these three industry sectors.

Figures presented below, and in Figure 2.3, relate to the percentage of EU nationals employed in each industry sector in 2016.

As the Annual Population Survey is a survey of private households, and therefore does not capture data for people living in communal establishment like hotels, boarding houses, hostels and mobile homes, it is likely that a number of seasonal migrant workers known to be employed in Scotland are underestimated in this source.

• There were 33,500 EU nationals employed in the Distribution, hotels and restaurants sector, 26.3% of all EU nationals in employment in Scotland. Within this sector, the number of EU nationals employed in Food and beverage services activities was 10,000 (7.6% of all EU nationals in employment) and the number employed in Accommodation was 7,000 (5.6% of all EU nationals in Employment).
• There were 26,300 EU nationals employed in the Public administration, education and health sector, 20.6% of all EU nationals in employment in Scotland. Within this sector, 11,000 were employed in Education (8.3% of all EU nationals in employment).
• There were 24,800 EU nationals employed in the Finance and business services sector, 19.5% of all EU nationals in employment in Scotland. Within this sector, 8,000 (6.4% of all EU nationals in employment) were employed in Services to Buildings and Landscape.

For non- EU nationals, the concentration of employment in these 3 broad Industry sectors was even greater, with nearly three quarters working in either Public administration, education and health, Distribution, hotels and restaurants or Banking, finance and Insurance, with, respectively, 31.5%, 23.1% and 18.3% of all non- EU nationals in employment working in these sectors (see Figure 2.3).

Figure 2.3: Percentage employed by industry sector and nationality (aged 16 and over), Scotland, 2016

Source: Annual Population Survey, Jan – Dec 2016, Office for National Statistics

Note: Agriculture & fishing and Energy & water sectors have been excluded as the estimates individually are too small to be considered statistically reliable from a sample survey.

** Estimates are suppressed as they are not considered reliable for use.

2.2.2 Concentration of EU and non- EU nationals by industry

This section refers to how dependent certain sectors are on the employment of EU nationals and other migrants.

Key insight: EU nationals (aged 16 and over) account for 5.0% of all employment in Scotland. They are most heavily represented in the Manufacturing sector, accounting for 8.2% of all employed in the sector.

Figure 2.4 illustrates the representation of migrants in the Scottish workforce across the sectors. After Manufacturing, the industry in Scotland next most reliant on the migrant workforce is Distribution, hotels and restaurants: EU migrants make up 6.9% of all employed in this sector. EU nationals are least represented in the Construction sector, where they account for 2.7% of all in employment.

Figure 2.4: EU and non- EU nationals share of sector employment in Scotland, 2016

Source: Annual Population Survey, Jan – Dec 2016, Office for National Statistics

Note: Agriculture & fishing and Energy & water sectors have been excluded for disclosure reasons.

** Estimates are suppressed as they are not considered reliable estimates for use.

With the inclusion of non- EU nationals, who accounted for 2.4% of all employment in Scotland in 2016, it was the same industries which showed the most reliance on migrant workers – 10% of all those in employment in the Manufacturing sector and in the Distribution, hotels and restaurants sector were non- UK nationals.

Looking in more detail at specific industries within the broad industry groups above, we can see a range of concentrations and dependency on EU nationals. In Education, of the 243,000 people in Scotland employed in the sector in 2016, 11,000 were EU nationals (8.3% of all EU nationals in employment, and 4.4% of all in employment in this sector). 8,000 were non- EU nationals (13.2% of all non- EU nationals in employment, and 3.3% of all in employment in this sector).

By contrast, while there were fewer (6,000) EU nationals working in Manufacture of food products (5.0% of all EU nationals in employment), they accounted for one quarter of all employment in this sector. ^[7]

The Health and social care sector ^[8] employed 14.2% of all people employed in Scotland. 5.9% of these workers were EU and non- EU nationals: the 9,000 non- EU nationals in the sector accounted for 14.5% of all non- EU nationals in employment in Scotland.

2.2.3 Employment of EU nationals in Growth Sectors, 2016 ^[9]

This section of the chapter examines economic statistics for the six private sector dominated growth sectors defined by the Scottish Government ^[10] , using APS data to illustrate the role that migrant workers play in these important sectors. These sectors are Food and drink, Finance and Business services, Life Sciences, Energy, Tourism ^[11] and Creative Industries. Employment estimates are shown in the summary below ^[12] .

Food and Drink (includes crop and animal production, fishing, manufacture of food products, manufacture of beverages)

• This sector employed 81,000 people in total, 3.1% of all in employment in Scotland.
• 10,000 EU nationals were employed in the Food and Drink Growth Sector in Scotland, accounting for 7.7% of all EU nationals in employment
• EU nationals accounted for 12.3% of all in employment in this sector.

Sustainable Tourism (includes hotels/holiday accommodation, restaurants, museums, historical sites and visitor attractions, sports facilities and other amusement/recreational activities)

• This sector employed 179,000 people in total, 6.9% of all in employment in Scotland.
• 17,000 EU nationals were employed in the Sustainable Tourism Growth Sector, 13.2% of all EU nationals in employment in Scotland.
• EU nationals accounted for 9.4% of all in employment in this sector.

Creative Industries (includes advertising, visual art, crafts, fashion, performing arts, music, computer games, radio/ TV and writing/publishing)

• This sector employed 136,000 people in total, 5.3% of all in employment in Scotland.

• 10,000 EU nationals were employed in Creative Industries, 8.1% of all EU nationals in employment in Scotland.
• EU Nationals accounted for 7.6% of all in employment in this sector.

Financial and Business Services (includes insurance/pension funds, legal activities, accounting and tax consultancy, market research, HR provision and office admin support)

• This sector employed 217,000 people in total, 8.4% of all employment in Scotland.
• 9,000 EU nationals were employed in Financial and Business Services, 7.1% of all EU nationals in employment in Scotland
• EU nationals accounted for 4.2% of all in employment in this sector.

2.3 Skills and occupations

2.3.1 Employment by occupation

Key insight: Most EU nationals were employed in Elementary Occupations.

Figure 2.5 illustrates that there were 32,000 EU nationals (25.2% of all EU nationals in employment) working in Elementary Occupations, compared with 11.2% of all those in employment in Scotland. (Elementary Occupations include, for example, cleaners, hospital porters and labourers.) Professional occupations (including IT, teaching and health professionals) employed 25,000 EU nationals (19.8% of all EU nationals in employment), compared with 20.7% for all in Scotland.

For non- EU nationals, 21,000 (33.3% of all non- EU nationals in employment) were employed in Professional Occupations, a higher proportion compared with EU nationals (19.8% of all EU nationals in employment) and all in employment in Scotland (20.7%).

Figure 2.5: Proportion employed by occupation and nationality (aged 16 and over), Scotland

Source: Annual Population Survey, Jan – Dec 2016, Office for National Statistics

** Estimates are suppressed as they are not considered reliable estimates for use.

The Occupation sub-group in which most EU nationals were employed was Elementary Cleaning Occupations. There were 14,000 EU nationals (10.7% of all EU nationals in employment) working in this type of employment. The Occupation Minor Group where EU nationals had the largest presence amongst the workforce was in Elementary Process Plant Operatives: 5,000 EU nationals employed in this Occupation sub-group made up 26.9% of all employed in that occupation in Scotland.

2.3.2 Qualification and Skills

Key insight: Over a third (36.7%) of EU nationals (16-64) in Scotland have a degree level qualification or higher.

The proportion of EU nationals with a degree level qualification is greater than that for UK nationals (16-64) in Scotland (27.6%) but less than the proportion of non- EU nationals of the same age group (56.8%) ^[13] .

Figure 2.6, below, shows that 68.3% of those EU nationals in employment who had degree qualifications were employed in high and medium high skill level occupations (for example; nurse, health associate, construction trade requiring a body of knowledge and above) compared with 78.0% of non- EU nationals in employment and 81.2% for UK nationals in employment. ^[14]

Figure 2.6: Occupation skill level by qualification and nationality, Scotland, 2016

Source: Annual Population Survey, Jan – Dec 2016, the Office for National Statistics

Notes: Includes those aged 16-64 years in employment. Excludes those currently in full-time education.

31.7% of EU nationals and 22.0% of non- EU nationals in employment and with a degree qualification were working in medium-low and low skill level occupations. In contrast, only 18.8% of UK nationals in employment and with a degree qualification were working in medium-low and low skill level occupations ^[15] .

2.3.3 Location of employment

Key insight: The Aberdeen City, City of Edinburgh and Glasgow City local authority areas are home to nearly half of all EU nationals in employment in Scotland, and around 40% of non- EU nationals.

Of these three areas, only Glasgow City has a lower proportion of EU nationals in employment (66.9%) compared with the overall employment rate for EU nationals across Scotland (78.5).

The local authority with the highest proportion of its EU nationals population in employment is Aberdeenshire: 97.2% of working age EU nationals are in employment ^[16] .