UK mulls wave of low-paid “skilled” migrants to crush wages

With UK wage growth recently hitting an 11-year high:

The Migration Advisory Committee (MAC) has recommended the Johnson Government drop the salary threshold for “skilled” migrants by more than £4,000:

Skilled migrants from outside the EU currently need to have a job offer with a minimum salary of £30,000.

But the Migration Advisory Committee (MAC) said it should fall to £25,600 for all workers to help recruit teachers and skilled NHS staff…

The committee dismissed those calling for no threshold, believing it stopped the undercutting of the labour market, ensured migrants made a net positive contribution to the public finances, and made sure migration policy supported the “ambition to make the UK a high wage, high skill, high productivity economy”.

But it said the drop would enable more medium-skilled workers to qualify…

Home Secretary Priti Patel said ministers would carefully consider the committee’s recommendations but stressed the report was “advisory”…

Dr Ben Greening, executive director of Migration Watch – a group which believes the present level of immigration is not sustainable – said the proposals amounted to “a significant loosening”…

He said it would mean “exposing over seven million UK jobs to new or increased global competition from much larger developing countries where there is very substantial demand to come to the UK”.

Reducing the ‘skilled’ migrant salary threshold to £25,600 is a ridiculous idea. According to the Office For National Statistics, the median full-time salary was £585 per week as at April 2018, or £30,420 a year. Thus, the MAC is recommending a ‘skilled’ migrant pay floor that is nearly £5,000 below the population median full-time salary, which would necessarily undercut local UK workers and lead to lower wage growth.

MAC’s concerns about skills shortages are also bunk.

Except in very limited circumstances, there is no such thing as a shortage of labour. There is only a “shortage” of labour at the price/ wages firms are generally willing to pay.

The very purpose of migrant workers is to suppress wage growth by allowing employers to recruit from a global pool of labour to compete with local workers. Thus, if UK employers want to attract workers there is a simple solution: raise wages. This is how the “market” is supposed to function when their are shortages.

Allowing the mass importation of foreign workers will circumvent the ordinary functioning of the labour market by enabling employers to pluck cheap foreign workers in lieu of raising wages. It will also discourage employers from training locals in favour of hiring ready-made workers from overseas. This is deleterious for both workers and the broader economy.

Unconventional Economist

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