Employment, international movement of labour & reducing wages

Market forces have been at work as never before in the last decade and resulted in vast numbers of workers moving around the EU. How and why has this happened ?

Open borders

There is nothing to stop citizens of the EU moving around Europe in search of work. In an evenly balanced economy this would present little problems. However, this is not the case.

Poorly developed areas of the EU

These exist mostly in the areas in Eastern Europe dominated by Russia in the post-war period when they were run on a demand economy which seriously held back their development. As a result after the fall of the Berlin wall in 1989 and the increase in size of the EU many had the opportunity to improve their lot by moving into the more prosperous areas of Europe which included the UK.

Eures

This has already been mentioned and has created an increased incentive to move because of the payments of subsidies both to the worker and the firm taking him/her on.

Welfare benefits

Many eastern Europeans are immeasurably better off by moving to the UK which offers free healthcare and schooling as well as subsidised housing and working family tax credits. One cannot attach any blame to the immigrants for taking full advantage of this especially when they are able to work here and send their child benefits back to their home country.

In all of the above if there was controlled immigration the UK would be able to gradually adjust to the situation but this is not going to happen. Time and again the EU makes it clear that none of this is negotiable.

Employers

A badly skewed welfare system which has enabled some employers to pay minimum wages in the knowledge that working tax credits paid for by the taxpayer will make their employees wages up including those of migrants. The existence of a huge pool of both skilled and unskilled workers abroad has enabled many employers including the NHS to save on their training budgets by taking on skilled workers from abroad. We have constant shortages of skilled plumbers, bricklayers, electricians, nurses, doctors etc as a result.

In short, some big business has never had such a good time since the Victorian era with a huge widening in the gulf of earnings between the highest and lowest paid. See articles below re the effects on earnings

http://www.express.co.uk/news/uk/612310/British-recruiters-advertise-jobs-abroad-Polish-workers http://www.express.co.uk/finance/city/614102/Monosoon-firms-not-paying-workers-minimum-wage-named-and-shamed http://www.express.co.uk/comment/expresscomment/610394/Immigration-damages-Britain-Theresa-May-Express-comment

Our skills are now such in deficit that we have gone from being the world’s first country to develop nuclear power to having to kowtow to the Chinese to lend us the money to pay the French to build an unproven nuclear power station at Hinkley which will double our cost of electricity ! Cameron is even crowing about the success of the deal.