Brexit to Lower U.K. Real Incomes by 2% by 2018, Report Saysby
Low-paid Britons to see wages rise 0.2-0.6% if migration cut
Bank of England forecasts show weaker growth, faster inflation
Brexit will hit the earnings of lower-paid U.K. workers even if the supply of foreign labor is reduced by tough cuts to inward migration, according to the Resolution Foundation.
Analysing the impact of migration over the past decade, the London-based group said while it had no overall impact on British wages, certain jobs -- including cleaning, sales and security -- saw a drag on pay. “Leave” campaigners tapped into resentment in the buildup to the June referendum, arguing that low-paid workers would benefit if migration numbers were cut.
Resolution estimates that the salaries of U.K. workers in the industries most affected by migration would rise between 0.2 percent and 0.6 percent by 2018 if the inflow was lowered to below a government aim of 100,000 immediately from the current level of 333,000 a year.
But it said that any increase would be wiped out by a 2 percent drop in real incomes implied in Bank of England forecasts released this month, which showed weaker economic growth and faster inflation.
“Those expecting a wage boost off the back of a post-Brexit fall in migration are likely to be disappointed,” Stephen Clarke, a policy analyst at the Resolution Foundation, said in a statement. “Any such gains will be dwarfed by the losses caused by the post-referendum slowdown in the economy.”