UK “Labour” Party demands migrant slave wages

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

The Johnson Government has dropped the salary threshold for “skilled” migrants by £4,400 to £25,600, which has been attacked by the Labour Party as still being too high:

Following recommendations from the Migration Advisory Committee (MAC), the salary threshold for skilled workers wanting to come to the UK would be lowered from £30,000 to £25,600.

The independent advisory body argued that lowering the threshold would help recruit teachers and skilled NHS staff.

Unlike the current system, applicants would also be able to trade points.

Those earning less than £25,600, but more than £20,480, could still apply for visas if they had a job in a “specific shortage occupation” or a PhD relevant to the job…

[The Government] is urging employers to “move away” from relying on “cheap labour” from Europe and invest in retaining staff and developing automation technology…

Labour said the “hostile environment” will make it hard to attract workers…

Shadow home secretary Diane Abbott said… “Ultimately, it will also be very difficult to attract the workers we need at all skill levels while the Tories’ hostile environment is in place. It needs to go”…

But Home Secretary Priti Patel said the new system would mean “the brightest and the best will be able to come to the United Kingdom”.

The government, which said it was aiming to reduce overall migration to the UK, wants a “points-based” immigration system – as it promised in its election manifesto.

Under the scheme, overseas workers who wanted to come to the UK would have to speak English and have the offer of a skilled job with an “approved sponsor”.

They would be awarded 50 points if they fulfil these criteria…

“It is important employers move away from a reliance on the UK’s immigration system as an alternative to investment in staff retention, productivity and wider investment in technology and automation,” it said.

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Reducing the ‘skilled’ migrant salary threshold to £25,600 is ridiculous. 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 new ‘skilled’ migrant pay floor is nearly £5,000 below the population median full-time salary (including unskilled workers), which would necessarily undercut local UK workers and lead to lower wage growth.

Labour’s faux 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.

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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.

The union movement should sue the “Labour” Party and demand they change its name. Because they no longer represent ordinary UK workers.

About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.