Generation Brexit

Are migrants actually ‘stealing’ our jobs or has the mass public perception, led to tactical voting to Brexit?

Did you know?
The EU rejection of a UK request for a cap on unskilled migration represented one of the main steps towards the controversial ‘Brexit’ events. Also, only 13.5% of the UK population are not UK born!

Preconceived notions of free movement:
▪ Large amounts on EU citizens move to the UK and ‘take or steal our jobs’
▪ Britain’s vote to leave the EU was the result of widespread anti-immigration sentiment, rather than a wider dissatisfaction with politics, according to a major survey of social attitudes in the UK.
▪ Findings from the British Social Attitudes (BSA) survey published show Brexit was the result of widespread concern over the numbers of people coming to the UK – millions of whom have done so under the EU’s freedom of movement rules in recent years.
▪ Nearly three-quarters (73 per cent) of those who are worried about immigration voted Leave, compared with 36 per cent of those who did not identify this as a concern, the research found, showing the discrepancy in views about immigration between Remain and Leave voters.
▪ It also reveals that the longer any given voter felt EU migrants should have lived in the UK before qualifying for welfare benefits, the more likely they were to vote to leave the EU.

So, Are immigrants ‘stealing’ jobs and benefits?
There are various reasons why people decide to incur the cost of migration. The most obvious one is the willingness to find better job opportunities. We then expect that the migrant will be better off in the host economy. After EU enlargement in 2004, the employment rate of migrants has steadily increased to. This was mainly the result of the very high employment rate of the EU accession immigrants, who are often willing to accept lower-paid jobs than natives.

In the Economist, it demonstrates the Impact on Wages for immigrants and natives. Immigrants and native workers compete for the same wages, an increase in migration implies that the host labour market faces a downward pressure on wages. Subsequently, a reduction in free mobility should then limit the impact on wages. However, the influx of immigrants increases national income , so limited mobility will reduce the overall gain to natives. If immigrants compete with native workers for jobs, then we can regard them as being substitutes. The initial increase in mobility generates an increase in employment. An increase in labour supply causes a shift of the supply curve to the right. When immigrants and natives are substitutes, leads to an increase in employment, but a reduction in wages; if under Brexit the number of immigrants falls, then the curve shift inwards and the wage rises. There is less downward pressure on wages, but overall employment in the host country decreases. Therefore, this means native workers will be better off, with Brexit as the number of immigrants falls, so although they have a relatively lower income than before, it has a reduced downward pressure on wages, due to the decline in supply.

Another Impact that will effect the economy is via Entrepreneurial opportunities and action. Positive externalities can arise when immigrants compete with natives in the same labour markets, but they bring new ideas and interact with them. The exchange of ideas makes cities like London very productive. We expect that the increase in labour supply also generates an increase in labour productivity. The diffusion of knowledge is hard to quantify. However, with Brexit a decrease in labour mobility will reduce the exchange of ideas, with a decrease in labour productivity. As, supply of labour will decrease, causing a shift of the supply curve to the left. Therefore, a relatively lower population, ceterius paribus means less consumption. This would decrease the amount of derived demand for labour within the economy, causing an shift of the demand curve to the left. Employment falls, and the effect on wages depends upon the relative movements of demand and supply. However, we could expect that the impact of a decrease in the diffusion of knowledge through the exchange of ideas will have a long-lasting effect on the host economy.

Lastly, it will Impact on the average skills composition in the UK. An additional concern of public opinion is the impact of a more generous welfare system on the decision to migrate to a particular country. If low skilled immigrants migrate in order to claim high levels of benefits, a decrease in labour mobility would seem beneficial to the host economy. However, in fact on average, migrants tend to be more skilled than natives, Therefore, they would be contributing more to the labour force skills composition and taxation revenue than they would be benefiting from transfer payments and welfare. Consequently, Brexit could then decrease the average skill composition in the UK and create a larger skills gap in UK.

To summarise a decrease in labour mobility may reduce employment and national incomes. Leading to, a decrease the diffusion of knowledge and exchange of ideas to innovate UK firms and finally decrease the average skill composition in the UK. Additionally, the perception that migrants are stealing our jobs, is a PUBLIC PERCEPTION; which consequently, may have led to people to vote leave!

 I would like to think about these three questions and comment to start a discussion!


1. What is your opinion of Brexit and Labour mobility?

2. Do you think the reduction of labour mobility will have a large impact on the UK economy?

3.  What policy would you impose to reduce the impact of Brexit and Labour Mobility?

 

Attached is a PowerPoint I produced! With the supply and demand curves to demonstrate further my line of argument! 

edited on Feb 26, 2018 by Roch Dunin-Wąsowicz

Evie J 9 months ago

I agree with you and I think that it is very important for labour mobility and this to continue as much as possible after Brexit. This could be achieved through working holidays where young people are able to study or work for up to abroad in participating countries.

Reply 7

Tara Hinds 9 months ago

1. I think it is crutial for the government to get a deal that allows the largest amount of movement as possible post brexit.

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Olivia Fitzpatrick 9 months ago

2. Yes labour mobility is a key aspect of our economy, with a reduction in it, the uk economy will suffer greatly

Reply 8

Kristina Griffin 9 months ago

I agree!

Reply 1

Shreya Kochhar 9 months ago

I agree and I think this would hit many European entrepreneurs who come to the UK with ideas to create a business and so the UK will lose out.

Reply 5

Martina Svibic 9 months ago

Thank you for your economic insights! Thinking about your argument on welfare tourism, I would like to add a legal dimension to it. According to the Citizens’ Rights Directive 2004/38/EC, benefits are tied to employment in the respective country and, in case of unemployment, to having been employed over a certain period of time before. In addition, the ECJ has become more restrictive than the directive originally suggested since 2013 (case Dano). It has even decided in favor of Great Britain in the case of the Commission against GB in 2016 (ever since, child benefits shall be treated as any other benefit of the directive and, therefore, is also linked to a valid right of residence). Therefore, with regard to welfare tourism, the problem is already being solved by the directive and following rulings of the ECJ which renders Brexit irrelevant in this regard - and the perception, just a perception.

Reply 7

Kristina Griffin 9 months ago

This is brilliant knowledge to link with the economics!

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Hugh D 9 months ago

Until the NHS and housing crisis are solved it's madness to want to add to the population. Sure if we are especially lacking in certain fields we should take in migrants but mass immigration is currently not sustainable. The working class suffer from this the most.

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Martha Eckersley 8 months ago

This is a really interesting perspective, that Brexit was perhaps used to not only play on perceived public opinion and reinforce those beliefs through misinformation and sensationalism; but also as a way to 'solve' all of these 'problems'. Another example being the NHS, as was a huge feature of the Leave campaign, that suddenly so much money would be pumped into the Service and all these problems would be magically solved.

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luke clark 7 months ago

We have a ageing population, the EU immigrants allow us to tackle this problem and bring down the UK's average age, putting 'money into the pot'. Ultimately supporting the UK economy.

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Pratham Bhat 6 months ago

I also believe strongly labour mobility plays a paramount role in our economy and by it being impacted, both growth and production will suffer a great deal and result in zero economic development.

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Ryan Murphy 4 months ago

I think vote leave was not based on economic reasons alone, but culture and identity. Migration is often welcomed, but it is not welcomed when it is sudden and large influxes of immigrants arrive at once. For a short while, it could be that immigrants come to the UK without jobs and do not necessarily have the skills to work in certain industries... This can hurt the economy.

Other immigration problems come from crime. I come from a city called Hull in the north-east of England, where we have a large Eastern European community. Most of the migrants that come here from these countries are hard working, but do not really earn much as they are in low-skilled manual jobs. However, there are a few who part take in illegal, informal work and commit crime. Quite a lot of the domestic violence, drunken violence, etc has gone up in the city and are increasingly committed by foreign migrants. This only looks to put a strain on our emergency services. No matter of added national income or increased labour mobility can act as a quick fix for this reality.

While I feel some EU immigration policies can be hugely beneficial to the economy of the UK, more often it fails to support integration, societal cohesion and law and order in some of our cities. I think people voted for Brexit with this in mind. They did not want to see their cities become inundated with some of the trouble that some migrants bring. Rightfully so when you can drive down some streets in Hull that are so impoverished and culturally alien to the rest of the city.

Immigration is by no means a hindrance to the country, but it will be if it is not holistically considered to an individual country's needs. I.e. how can a union of 28 countries collectively coordinate a policy position to be applied to every country within it. Brexit was an opportunity to really bring the sovereign legislative powers to the UK, so that we can fully decide who is permitted to work and operate within the state.

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Reply 1

Seungmin Bae 2 weeks ago

I agree, labor mobility is very important to Britain's economy. May's position towards the immigrants and many minorities may be deceiving the public that the immigrants are "stealing jobs".

Reply 1

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