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Post-Brexit Pay Squeeze To Be Much Larger Than Boost For Low-Paid Workers Due To Low Migration

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Union Jack Flag By Nick Page Via Flickr

Important new challenges for business and the labour market due to cutting migration, requiring a complete policy overhaul.

Cutting migration could deliver a small pay boost to some low-paid British-born workers, but any gains are likely to be dwarfed by the far bigger weakening of wage growth forecast by the Bank of England in the wake of the Brexit-vote.

This is according to a new Resolution Foundation report published today (Tuesday) on the impact of any-post Brexit reduction in migration on the pay and jobs of UK-born workers and the wider labour market.

The Foundation’s report analyses the impact of migration on the labour market over the last decade, during which the share of migrants in the population has increased from 10 per cent in 2004 to 16 per cent this year. It then assesses how meeting the government’s migration target might affect future earnings and employment, and the challenges this raises for firms and public policy.

The report shows that while the large increase in migration over the last decade has had no impact on the wages of British-born workers overall, it has dragged on earnings in some occupations such as skilled trades and basic cleaning, sales and security jobs.

However it notes that those expecting a wage boost as a result of any post-Brexit vote fall in migration are likely to be disappointed. It shows that even reducing migration to the tens of thousands immediately could boost the wages of British workers in sectors most affected by migration by between 0.2 and 0.6 per cent by 2018. These small increases would be dwarfed by the 2 per cent downgrade to average wage growth made by the Bank in the wake of the referendum result.

The Foundation says that while reducing migration will have little effect on the earnings and employment of British workers overall, it will create new challenges for businesses that the government will need to address in order to avoid firm closures and wider economic disruption.

Lower migration will be particularly challenging for sectors such as food manufacturing, clothing manufacture and domestic personnel services where over 30 per cent of the workforce are migrants.

The Foundation says that simply replacing migrant workers in these firms with British-born workers is not realistic given the large pay differences between the two groups of workers – Eastern European workers typically earn almost £3 an hour less than British-born workers. Firms in migrant-reliant sectors will therefore need to fundamentally rethink their business models or risk closure.

The Foundation says that these low-paying sectors, not just high technology industries, should be a priority for the government’s new industrial strategy so that they are supported through this major labour market shift.

In the short-term this means guaranteeing the rights of existing migrants to continue to work in the UK. This would prevent a short, sharp drop in the number of workers available for work that could threaten the viability of some businesses.

In the medium term, firms – supported by a government industrial strategy – will need to invest in skills and labour-saving technology in order to support more high-paid jobs or replace low-paid roles that can no longer be filled.

The report says that a reformed migration system post-Brexit is likely to include a greater role for temporary workers and therefore also requires a major overhaul of the light-touch labour market enforcement regime the UK currently has.

It notes that the combined frontline staffing of the UK’s three existing enforcement agencies – the HMRC National Minimum Wage Enforcement Unit, Gangmasters Licensing and Labour Abuse Authority and Employment Standards Agency Inspectorate – is less than 350. This means there is just one enforcement officer for every 20,000 working age migrants.

The Foundation says that a new single labour enforcement unit – with far greater resources than the combined agencies currently have – will be needed to prevent new types of illegal migration from overstaying workers, and the undercutting of pay and conditions that could follow.

Stephen Clarke, Policy Analyst at the Resolution Foundation, said:

“The impact that recent widespread migration has had on British-born workers is hotly disputed. While there has been no effect on wages overall, increased migration has caused a slight drag on wages for some low-paid British workers.

“However, those expecting a wage boost off the back of a post-Brexit fall in migration are likely to be disappointed. Any such gains will be dwarfed by the losses caused by the post-referendum slowdown in the economy.

While reducing migration may not have a huge impact on the pay and job prospects of British-born workers, it will create major new challenges for many British-based firms.

 

“The government must use its new industrial strategy to support these firms, such as food and clothing manufacturers, who have hitherto relied heavily on migrant workers. These firms will need to invest in skills and new technology if they’re to stay afloat in a changed labour market.

“A new migration policy will also need to be properly enforced if it includes a greater role for temporary workers. We currently have just one labour market enforcement officer for every 20,000 working age migrants. In future a new single enforcement unit, with more resources, will be needed to prevent new risks of migrants illegally overstaying their visas and the undercutting of pay and conditions that could follow.”

 

Economy

A Good Look At How Homes Will Become More Energy Efficient Soon

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energy efficient homes

Everyone always talks about ways they can save energy at home, but the tactics are old school. They’re only tweaking the way they do things at the moment. Sealing holes in your home isn’t exactly the next scientific breakthrough we’ve been waiting for.

There is some good news because technology is progressing quickly. Some tactics might not be brand new, but they’re becoming more popular. Here are a few things you should expect to see in homes all around the country within a few years.

1. The Rise Of Smart Windows

When you look at a window right now it’s just a pane of glass. In the future they’ll be controlled by microprocessors and sensors. They’ll change depending on the specific weather conditions directly outside.

If the sun disappears the shade will automatically adjust to let in more light. The exact opposite will happen when it’s sunny. These energy efficient windows will save everyone a huge amount of money.

2. A Better Way To Cool Roofs

If you wanted to cool a roof down today you would coat it with a material full of specialized pigments. This would allow roofs to deflect the sun and they’d absorb less heat in the process too.

Soon we’ll see the same thing being done, but it will be four times more effective. Roofs will never get too hot again. Anyone with a large roof is going to see a sharp decrease in their energy bills.

3. Low-E Windows Taking Over

It’s a mystery why these aren’t already extremely popular, but things are starting to change. Read low-E window replacement reviews and you’ll see everyone loves them because they’re extremely effective.

They’ll keep heat outside in summer or inside in winter. People don’t even have to buy new windows to enjoy the technology. All they’ll need is a low-E film to place over their current ones.

4. Magnets Will Cool Fridges

Refrigerators haven’t changed much in a very long time. They’re still using a vapor compression process that wastes energy while harming the environment. It won’t be long until they’ll be cooled using magnets instead.

The magnetocaloric effect is going to revolutionize cold food storage. The fluid these fridges are going to use will be water-based, which means the environment can rest easy and energy bills will drop.

5. Improving Our Current LEDs

Everyone who spent a lot of money on energy must have been very happy when LEDs became mainstream. Incandescent light bulbs belong in museums today because the new tech cut costs by up to 85 percent.

That doesn’t mean someone isn’t always trying to improve on an already great invention. The amount of lumens LEDs produce per watt isn’t great, but we’ve already found a way to increase it by 25 percent.

Maybe Homes Will Look Different Too

Do you think we’ll come up with new styles of homes that will take off? Surely it’s not out of the question. Everything inside homes seems to be changing for the better with each passing year. It’s going to continue doing so thanks to amazing inventors.

ShutterStock – Stock photo ID: 613912244

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Economy

IEMA Urge Government’s Industrial Strategy Skills Overhaul To Adopt A “Long View Approach”

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IEMA, in response to the launch of the Government’s Industrial Strategy Green Paper, have welcomed the focus on technical skills and education to boost “competence and capability” of tomorrow’s workforce.

Policy experts at the world’s leading professional association of Environment and Sustainability professionals has today welcomed Prime Minister Teresa May’s confirmation that an overhaul of technical education and skills will form a central part of the Plan for Britain – but warns the strategy must be one for the long term.

Martin Baxter, Chief Policy Advisor at IEMA said this morning that the approach and predicted investment in building a stronger technical skills portfolio to boost the UK’s productivity and economic resilience is positive, and presents an opportunity to drive the UK’s skills profile and commitment to sustainability outside of the EU.

Commenting on the launch of the Government’s Industrial Strategy Green Paper, Baxter said today:

“Government must use the Industrial Strategy as an opportunity to accelerate the UK’s transition to a low-carbon, resource efficient economy – one that is flexible and agile and which gives a progressive outlook for the UK’s future outside the EU.

We welcome the focus on skills and education, as it is vital that tomorrow’s workforce has the competence and capability to innovate and compete globally in high-value manufacturing and leading technology.

There is a real opportunity with the Industrial Strategy, and forthcoming 25 year Environment Plan and Carbon Emissions Reduction Plan, to set long-term economic and environmental outcomes which set the conditions to unlock investment, enhance natural capital and provide employment and export opportunities for UK business.

We will ensure that the Environment and Sustainability profession makes a positive contribution in responding to the Green Paper.”

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