Free movement of workers across the EU is good for employers, employees and the UK economy- nearly every business owner agrees with this.
But with Brexit around the corner, there is a very real danger that UK business owners will be cut off from accessing some of the the best, most-flexible workers they have.
The Treasury has said that some 15 per cent of annual growth in the UK’s gross domestic product is down to immigration. The argument against this has been that immigrant workers push down wages. The Bank of England recently reported it found a “small negative impact on average British wages”, with effects most pronounced among low and unskilled workers. One projection based on the Bank’s paper suggests that British workers’ wages were 1 per cent lower after eight years than they would have been without immigration, which equates to a few pence an hour at most.
What few will say in public is that a more flexible labour market delivers lower wages which can bring wider economic benefits: employers find it cheaper to hire and retain staff, so employment is higher. They also make greater profits, which can be spent making the workforce more productive or returned to shareholders who spend and invest it, stimulating growth.
So, what will happen in a post-Brexit world? It’s not all doom and gloom. The phrase, “It’s the economy, stupid” might never be more apt. If businesses pushes for more immigrant workers, then it is a very powerful voice to ignore.
The UK outside the EU could continue a policy of “openness” to foreign workers that might allow the entry of skilled and productive workers who would boost growth while excluding those with lower skills or a greater propensity to claim welfare instead of working.
If you’re in any way worried about your staffing needs as we enter Brexit negotiations, please do get in touch for a confidential consultation.