Brexit: Less migration won’t boost your incomes, says new research

In fact, you'll have less money in real terms thanks to Brexit

Boris Johnson Michael Gove vote leave

 

Cuts to immigration promised by the government would not boost people’s incomes, according to new research which suggests Brexit’s damage to the economy would leave UK workers with less money.

Analysis by the Resolution Foundation finds that even if the government met its pledge of cutting net migration to the tens of thousands, lower growth post-Brexit would slash incomes in real terms.

The findings make nonsense of claims by the Leave campaign during the EU referendum that migration was holding down incomes and a Brexit vote would boost wages for UK workers.

The Resolution Foundation said large-scale immigration since 2004 – which saw migrants jump from 10 to 16 per cent of the population by 2016 – ‘did not affect the earnings of native workers overall’.

It said more migrant labour had meant a small (0.5 to 2 per cent) drag on earnings in some low-paid sectors.

However, it adds: ‘these small effects do not explain and were in fact dwarfed by the general pay squeeze experienced during the same period (4.7 to 9.7 per cent).

‘In the next few years a fall in migration will do little to ameliorate the squeeze on wages for native workers.’

The think tank said that even if migration was cut to the tens of thousands immediately, there would only be a small increase in wages of around 0.2 to 0.6 per cent by 2018.

Further, this increase would be drowned out by Brexit’s impact on economic growth, making those wages worth less in real terms, and leaving people worse off overall.

Companies in sectors like food and clothing manufacturing and domestic personnel, where 30 per cent are migrant workers, would suffer ‘severe damage’ and be forced to invest in skills, rely on temporary workers, or simply shrink their business, it adds.

The report comes at the same time as news of higher prices. Inflation has risen to 0.6 per cent from 0.5 in July, thanks partly to rising fuel prices, according to the Office for National Statistics. The Retail Prices Index measure of inflation rose to 1.9 per cent in July from 1.6 per cent in June.

The Resolution Foundation sums up it’s findings:

‘Looking forward we find that a fall in inward migration will not significantly help boost wages, which are more likely to be suppressed by sterling’s depreciation in the short term and the wider impact of Brexit on growth in the years ahead.

However, fewer migrants will create a number of other significant challenges for the labour market.’

It said Prime Minister Theresa May’s new industrial strategy must help business hit by cuts to migrant labour, with investment in ‘labour-saving technology’, and called for better controls on illegal migration.

See: Rail fares grow twice as fast as wages since 2010, says TUC

3 Responses to “Brexit: Less migration won’t boost your incomes, says new research”

  1. CR

    Mmm… A pro-EU Blairite ‘think-tank’ produced a pro-EU pro-immigration report. Whatever next !!!

    Of couse, the reality that we all see around us is that uncontrolled immigration has caused:

    – lower British worker wages
    – longer queues for our NHS services
    – longer queues and cuts in our Local Authority services
    – higher housing costs
    – greater threat from terrorism
    – major cultural costs in our inner-cities

  2. David Davies

    If every UK Citizen eligible to work were to emigrate, it may cause a bit of a fuss. migration is NOT a synonym for IMmigration.

    Zero Hours Contracts, and `Wealth Creators’ who have reversed the implications of what is laughably called the National Living Wage are the problems.

  3. ted

    People who emigrate to the Uk do not set wages, the employers do, other than minimum wage never noticed any requirement for employers to pay low wages, might I ask why this question is never put to employer organisations? If we had not so badly treated the Trade Unions in the last 30 years wages would be higher. The so called reforms of the NHS since 2010 have had a much greater impact on waiting times and NHS services than any increase in immigration, coupled with the cuts and the increased bureaucracy so that now out of every ten tax payer pounds spent one is now spent on administrating the market created since 2010. Cuts to the Local Authorities well, for example my local council has had its budgets cut by a near 50% since 2010, who might I ask is responsible for that? Higher housing costs, we as a country build fewer houses. Greater threat of terrorism might I ask who from? Working immigrants? When I was young we had real terrorists, IRA, INLA, RAF and many more not the micky mouse terrorist you get now days. Finally “major cultural cost in our inner cities, might I ask who “our” is and what does this mean? Getting back to my main point regardless of the situation employers today will try and pay less, leaving the tax payer to pick up the bill. The Minimum Wages means your employer would pay you less but the law stops them, finally did immigrants bring Zero Hours contracts with them? Lets focus on the real targets!

Leave a Reply