Migrant pay gap widens in many high-income countries

Migrants earn nearly 13 per cent on average less than national workers in high-income countries, according to a new International Labour Organization (ILO) report. In some countries such as Cyprus, Italy and Austria the pay gap in hourly wages is higher, at 42 per cent, 30 per cent and 25 per cent respectively. In Finland it is lower than the average, at 11 per cent and in the European Union as a whole it is almost 9 per cent.

In the last five years, the migrant pay gap has widened in some high-income countries: In Italy for example, migrant workers earn 30 per cent less than nationals according to the latest data, compared to 27 per cent in 2015. In Portugal the pay gap is 29 per cent compared to 25 per cent in 2015, and in Ireland 21 per cent compared to 19 per cent in 2015.

However, in all countries they face problems of discrimination and exclusion, which have been aggravated by the COVID-19 pandemic , the ILO study shows.

Migrant workers often face inequality of treatment in the labour market, including with respect to wages, access to employment and training, conditions of work, social security, and trade union rights. They play a fundamental role in many economies." Michelle Leighton, Chief, the ILO Labour Migration Branch The report – The migrant pay gap: Understanding wage differences between migrants and nationals  – shows that migrants in high-income countries are more likely to be in precarious work, with 27 per cent on temporary contracts and 15 per cent working part-time. They are disproportionately represented in the primary sector – agriculture, fishing and forestry – and take up more jobs than nationals in the secondary sector: mining and quarrying; manufacturing; electricity, gas and water; and construction.

Migrant workers often face inequality of treatment in the labour market, including with respect to wages, access to employment and training, conditions of work, social security, and trade union rights. They play a fundamental role in many economies. They cannot be considered as second-class citizens,” says Michelle Leighton, Chief of the ILO Labour Migration Branch.

Skills mismatch

Migrant workers earn less than similarly qualified nationals within the same occupational category.

They are more likely to work in lower-skilled and low-paid jobs that do not match their education and skills, which may point to discrimination during the hiring process. Higher-educated migrant workers in high-income countries are also less likely to attain jobs in higher occupational categories.

In the United States and Finland, for example, while the share of migrant workers with secondary school education is 78 per cent and 98 per cent, respectively, the share of migrant workers in high- or semi-skilled jobs are only 35 per cent and 50 per cent.

This reflects the fact that they have difficulties transferring their skills and experience across countries, in large part due to lack of systems that recognize the skills and qualifications of migrant workers.

In low- and middle-income countries, the situation is reversed: migrant workers are usually temporary high-skilled expatriates. They tend to earn about 17.3 per cent more per hour than non-migrant workers.

Women migrant workers are doubly discriminated against Migrant women workers face a double wage penalty, both as migrants and as women. The pay gap between male nationals and migrant women in high-income countries is estimated at nearly 21 per cent per cent per hour. This is higher than the gender pay gap (16 per cent) in those countries.

This is partly because migrant women workers represent a significant share of those in domestic work: 73 per cent (or 8.45 million) of all migrant domestic workers around the world. In high-income countries, the pay gap between migrant care workers and non-migrant care workers is about 19 per cent.

Impact of the pandemic

The pandemic has had a greater health and economic impact on migrant workers than on the rest of the working population. At the onset of the COVID-19 crisis, tens of millions of migrant workers were forced to return home after losing their jobs.

Their jobs are less amenable to teleworking compared to non-migrants and many of them are frontline workers who are more exposed to the virus.

The crisis – of which we do not yet have a complete picture – may widen the labour market differences between migrant workers and nationals, which may in turn further deepen migrant pay gaps, says the report.