A fair immigration system that provides opportunity

Written by BrexitWorks.com

What does the Office of National Statistics say?

After decades of Freedom of Movement suppressing wages for workers we now have the facts.

The Office of National Statistics has recognised that private sector wage growth has risen due to worker scarcity:

"Businesses have resorted to hiking wages to attract and retain staff, with Office of National Statistics data showing private sector pay growth is up around seven per cent on an annual basis."

Public sector wages are growing more slowly but are catching up.

Worker scarcity = higher wages

Brexit = Worker scarcity = higher wages

Torsten Bell, the economist from the left wing think tank Resolution Foundation wrote in the article 'Can robots really plug the workforce shortage left by Brexit' about the coming AI and automation wave that's likely to take some of the jobs worked scarcity has created.

What is clear is that Brexit has caused worker scarcity.

Brexit = Worker scarcity = higher wages

An exert of that article below.

That’s not a bug with the new migration regime, it’s a design feature.

An exert from the article:

Migration was quite a big deal, Brexit-wise, but six years on, and two after the end of free movement, what has been the impact?

The level of net migration certainly hasn’t fallen, but a new report from Jonathan Portes and John Springford argues that if you focus on workers, the end of freedom of movement has left about 330,000 fewer in Britain (460,000 fewer Europeans, but 130,000 more from elsewhere). That’s a reduction of roughly 1% of the labour force, prompting many to say that a lack of migration drove recent economy-wide labour shortages.

This is overstated (hiring difficulties have been common across Europe), but fewer available workers will have contributed to the hiring challenges in lower-paying sectors that were previously reliant on EU workers (and where the authors show the workforce reduction is concentrated). But that’s not a bug with the new migration regime, it’s a design feature.

The important question is what happens next. Here, a new Danish study offers some insights. It shows that, from the mid-1990s, firms were more likely to invest in robots to support production in places where cheaper migrant labour was hard to come by: a 1 percentage point rise in the share of non-western immigrants decreased the probability of robots being used by 7%. The authors argue that this is because when firms can pay migrants lower wages, they do so rather than use machines.

The post-Brexit system is working

Jonathan Portes is no fan of Brexit, but he can tell a truth when he sees one. Listen to what he has to say:

 In fact, the migration statistics reflect something that is rare indeed in the UK right now – a successful policy implemented efficiently and effectively and, even rarer, the crystallisation of a genuine “Brexit opportunity”.

UK wage growth outstrips US and EU rises

In more recent news Indeed again points to buoyant UK wage growth:

British wage growth accelerated in the three months to May, in contrast to a downward trend in advertised salaries in the United States and the euro zone