Reply to post: Re: The elephant in the room - stagnant wages because of the free movement of labour

British jobs for British people: UK tech rejects PM May’s nativist hiring agenda

Dr. Mouse Silver badge

Re: The elephant in the room - stagnant wages because of the free movement of labour

if we must remove ourselves from so much free movement of labour, those of us left will earn more as a result

Not necessarily.

Wages, as with the prices of almost everything, are governed by supply and demand. If the supply is reduced but demand stays the same, the price should rise.

However, we are unlikely to see demand stay the same. There will be companies who choose to move at least part of their business elsewhere. This reduces demand. There may be people who bring jobs in to the UK, too, but they are unlikely to be in exactly equal numbers, so demand will change.

Therefore it will be the difference between the change in demand and the change in supply which will determine the change in pay. There is a good chance that there will be a large reduction in demand, so wages actually fall. There is also a good chance that there will be a lower reduction in demand (or even an increase in demand), which could see wages rise.

But it's definitely incorrect to say that if all the foreigners leave, we will get better pay.

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