If we vote for Brexit what happens

Generali

michaels wrote: »

First lesson in economics, the interaction between supply and demand sets price, more supply with the same demand = lower price. Freedom of movement increases the supply of low/unskilled labour. What impact do you think it has on the pay of the lowest skilled in the UK? (and does this have anything to do with tax havens?

Separately, consider the supplier of a basic agricultural product like sugar from a poor country outside the EU. The EU applies high tariffs against such producers, this will result in sales of this poor producers output to be less than otherwise and they will receive less revenue thus being even poorer. Doesn't sound very progressive to me unless you are one of the few protected industrial farmers in the EU.

The trouble is that there is very little evidence to support the view that increased migration of low skill workers has significantly surpressed wages. This is probably due to the minimum wage putting a floor on the price of labour and also migrants increasing the demand for labour too. After all a Polish plumber will buy coffee, go to the pub and get his hair cut.

If the UK had as many low skill migrants pushing down wages as claimed there'd be more than 3 million on the minimum wage. The theory doesn't match the real world experience.

gfplux

kabayiri wrote: »

Nothing has "stayed the same" when it comes to the EU.

The complete opposite has been true in the last couple of decades.

The Euro; EU expansion; new EU regulations. It's all been about change.

Now, you might agree with this change, but that's your choice.

To survive and maybe prosper, I think the EU will have to change even more. Things like Schengen and the Dublin agreement are not working, and there is already talk of their replacements.

You obviously missed the point that staying the same is the same as the ever changing, evolving EU of the past.
Sad I had to point that out.

CLAPTON

gfplux wrote: »

You obviously missed the point that staying the same is the same as the ever changing, evolving EU of the past.
Sad I had to point that out.

So you actually meant both options involve unquantifiable unknown change.

gfplux

Generali wrote: »

The trouble is that there is very little evidence to support the view that increased migration of low skill workers has significantly surpressed wages. This is probably due to the minimum wage putting a floor on the price of labour and also migrants increasing the demand for labour too. After all a Polish plumber will buy coffee, go to the pub and get his hair cut.

If the UK had as many low skill migrants pushing down wages as claimed there'd be more than 3 million on the minimum wage. The theory doesn't match the real world experience.

Good point.
In reality that Polish plumber will buy coffee in a coffee shop, Go to the pub and the hairdressers and be served by other EU nationals. Well that is how it seemed to me while on holiday in London.
As I have said before, where are the Brits who can do these jobs.

CLAPTON

gfplux wrote: »

Good point.
In reality that Polish plumber will buy coffee in a coffee shop, Go to the pub and the hairdressers and be served by other EU nationals. Well that is how it seemed to me while on holiday in London.
As I have said before, where are the Brits who can do these jobs.

Unless this effect is unique to the UK, one has to assume that for every 'benefit' in the UK there is corresponding damage being caused in Poland.

mwpt

gfplux wrote: »

Good point.
In reality that Polish plumber will buy coffee in a coffee shop, Go to the pub and the hairdressers and be served by other EU nationals. Well that is how it seemed to me while on holiday in London.
As I have said before, where are the Brits who can do these jobs.

Where do you speculate they are? There is apparently only 5% unemployment in the UK. When I walk down my high street, the butcher is British, the fruit and veg merchant is British, the plumbing store workers are British, probably the nearby car wash owner is British (though he employs EU nationals), the Waitrose staff all seem to be British (though the nearby Tescos staff all seem to be foreign - not EU), the charity shop workers are British, the bank tellers are British, the man who cleans the roofs locally is British, the gas engineer who lives opposite me is British, the pub staff are British.

This is in London.

cells

Unemployment of 5% is misleading as it includes all unemployed. If you look at the figures for unemployed for more than 3 months or 6 months the 5% crashes towards 2%

cells

michaels wrote: »

First lesson in economics, the interaction between supply and demand sets price, more supply with the same demand = lower price. Freedom of movement increases the supply of low/unskilled labour. What impact do you think it has on the pay of the lowest skilled in the UK? (and does this have anything to do with tax havens?

Separately, consider the supplier of a basic agricultural product like sugar from a poor country outside the EU. The EU applies high tariffs against such producers, this will result in sales of this poor producers output to be less than otherwise and they will receive less revenue thus being even poorer. Doesn't sound very progressive to me unless you are one of the few protected industrial farmers in the EU.

Importing lower skilled workers in theory could allow domestoc higher skilled workers in low pay low skill work to upgrade their pay and working conditions.

So if you import a million eastern immigrants they will have low pay low skill demands but also high pay high skill demands. So their need for food employs workers in tesco and aldi. There need for education healthcare legals etc might allow a law degree holder working at tesco to become a solicitor in a law firm. It might allow a English degree holder working in a call centre to become an English teacher in a school. It might allow a bouncer at a club to become a policeman.

So the economy fills demands and allocates resources and people to create those goods and services. If the migrants demands are about the same as that of the average local then overall the jobs created in the economy will be of similar pay. The migrants might be pushed to the lowest jobs and wages so its not all that aparant that lots of other people have had the opportunity for higher paid work as a result.


A bit like a growing company. If your company is hiring at the bottom then a lot of existing workers go up grades responsibilities and pay as the company gets bigger. Looking just at the bottom and saying they are low skill low paid without looking at the whole picture gives the wrong conclusion.

CLAPTON

It would clearly be an interesting economic debate to analyse what the demand and supply impact of immigration is, both on the receiving country and the sending country.
Is there any 'universal' economic arguments or do they all depend upon the specific situations.

Obviously not possible now, as all 'remain' will ignore any downside and all brexit will ignore benefits ; be to fair to myself I have often praised the range and number of new coffee bars and restaurants so I feel I am more objective than most here.

CLAPTON

cells wrote: »

Importing lower skilled workers in theory could allow domestoc higher skilled workers in low pay low skill work to upgrade their pay and working conditions.

So if you import a million eastern immigrants they will have low pay low skill demands but also high pay high skill demands. So their need for food employs workers in tesco and aldi. There need for education healthcare legals etc might allow a law degree holder working at tesco to become a solicitor in a law firm. It might allow a English degree holder working in a call centre to become an English teacher in a school. It might allow a bouncer at a club to become a policeman.

So the economy fills demands and allocates resources and people to create those goods and services. If the migrants demands are about the same as that of the average local then overall the jobs created in the economy will be of similar pay. The migrants might be pushed to the lowest jobs and wages so its not all that aparant that lots of other people have had the opportunity for higher paid work as a result.


A bit like a growing company. If your company is hiring at the bottom then a lot of existing workers go up grades responsibilities and pay as the company gets bigger. Looking just at the bottom and saying they are low skill low paid without looking at the whole picture gives the wrong conclusion.

In theory the exact opposite might be the case.
The increase flow of cheap young people can depress wages and remove any need for businesses to produce higher value goods and service or improve their productivity as they can make good profits from cheap labour.

The increase in imports could lead to a decline in the value of the pound so increasing our costs, decreasing our standard of living due to our increased dependency on imports and further reducing 'real' wages.
The need for increasing infrastructure will lead to increased taxes to pay for it, further reducing real take home pay.
The decline in the balance of trade will be funded by capital flows: like all effective borrowing, this is fine for now but will have to be paid for in the future by our children.
On the other hand the inflow of 1 million plumbers might spark a renaissance in entrepreneurial businesses and we become the one economy in the world.