The real risk to wages is from Brexit’s damage to the economy, not immigration

Friday, 23rd February 2018

brexit

• IN grasping for a left-wing case for Brexit, Daniel Powell, like most Brexiteers, has left reality behind (Put aside the divisive bickering, Brexit is inevitable, February, 16).

We need immigration. Since 2008, the working-age, UK-born population has dropped by half a million. Migrants have filled this gap. Who do you think will suffer most when the UK continues to have lower GDP thanks to Brexit?

Oxford University’s research shows migration has little effect overall on wages. The small adverse effect is only temporary in a single-sector: the low-skilled. Long-term, the low-skilled also experience no adverse effect due to the overall expansion of the economy.

Latest research shows that for each one per cent increase in migration to the UK, wage reduction for the low-skilled was under 0.2 per cent between 1992 and 2014.

So, given migrants increased as a percentage of the population from seven per cent to 13 per cent over that period, that’s a reduction of around 1.2 per cent. This is on the same scale as research by the OBR2, which estimates a one per cent reduction from 2004 to 2012.

Given that real median wages have dropped by nearly that much in the past year thanks to Brexit-caused inflation, you start to understand that the real risk to wages is from Brexit’s damage to the economy, not immigration.

Migration impact funds, apprenticeship schemes, further education and restricting access to benefits until migrants have contributed to the public purse for a number of years – these are the ways to mitigate the small, temporary downward pressure on wages for the low-skilled. The sledgehammer of leaving the EU will do more harm than good.

BRENDAN HOLMES
Witherington Road, N5

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