Britain’s central bank, the Bank of England, has stated that the high level of immigration that Britain is currently experiencing does in fact lead to lower wages, with those hurt most by the policy being on the semi-skilled or unskilled end of the country’s workforce: almost 1 in 4 Britons.
The news will come as a blow to pro immigration campaigners and organisations who have long stated that the argument behind wage compression – as it is commonly known – is a falsehood.
News outlets and so-called “independent” fact checking organisations have ignored the idea over the years, but the claim has been made repeatedly by those who want controlled immigration rather than open borders, such as the UK Independence Party and its leader Nigel Farage MEP.
The Bank of England concludes in its new report entitled ‘The impact of immigration on occupational wages: evidence from Britain’:
This paper asks whether immigration has any impact on wages. It answers this question by considering the variation of wages and immigration across regions, occupations, and time. Occupations turn out to be a relatively important dimension. Once the occupational breakdown is incorporated into a regional analysis of immigration, the immigrant-native ratio has a significant small impact on the average occupational wage rates of that region. Closer examination reveals that the biggest effect is in the semi/unskilled services sector, where a 10 percentage point rise in the proportion of immigrants is associated with a 2 percent reduction in pay. Where immigrants come from — EU or non-EU — appears to have no impact on our economy wide results; with the impact within the semi/unskilled services sector being small. These findings accord well with intuition and anecdotal evidence, but do not seem to have been recorded previously in the empirical literature.
The last line in that conclusion appears to be a slap down to studies which have so far averaged their conclusions across sectors, paying little or no attention to the impact mass migration has by sector respectively.
UKIP’s Migration Spokesman Steven Woolfe MEP said today: “Since I have been the UKIP spokesman on Migration, along with UKIP leader Nigel Farage, I have been arguing that mass uncontrolled migration pushes down the wages of the low paid in Britain. This is not the first report which came to the same conclusion. In fact, Bank of England Governor, Mark Carney also recently accepted that unsustainable levels of migration causes wage compression some time ago.
“The Report states clearly that a ’10 percentage point rise in the proportion of immigrants working in semi/unskilled services leads to a 1.88 percent reduction in pay’. Government net migration numbers of over 300,000 annually, together with those that are not captured in official figures, is preventing wages rising in line with inflation for native, British workers, noticeable at the lower end of the skills classification scale. But the ‘knock on’ effects of this many outsiders entering the UK workforce impacts the disposable incomes of workers across the social spectrum and, with technological advances, hinders employment opportunities for British people.
“Until policymakers in this country stop being apologists for mass migration it excuses them from dealing with the consequences of a dispossessed, impoverished, UK native ‘underclass’. Successive Labour and Tory governments have been warned about this but done nothing.”
Commenting on the latest Bank of England research on the impact of immigration on wages, Lord Green of Deddington of the Migration Watch think tank said: “For many years the immigration lobby have claimed that there is no evidence that immigration has any significant effect on the wages of British workers. This new research by the Bank of England blows their claims out of the water. It has found a significant negative impact on those in the lower skilled services sector in which six million UK born are working. This amounts to nearly a quarter of all British workers.”