B0ycey wrote:Nonetheless I see no correlation with poor wages and economic growth. Sure Victorian workers created wonders and boosted productivity with new inventions and hours worked but the same wonders are being build today and factories are even more productive than they were yesteryear with a shorter working day. Low wages are only a factor when it comes to profits. It is part of the cost of production and is why production is being sent to Asia. It is good for their economies I guess due to the Free Market. But whilst unemployment is low the same businesses would still have to look at new countries to invest in even if wages were significantly lower in the UK than they are now. Why? Because the labor simply isn't here unless you have migrants.
4 cheap workers can build and produce things faster than 2 expensive British workers. That inevitably means higher production, more houses can be built in the same time period. That ultimately means higher GDP. We have reached a point when it is very difficult to achieve further growth with native workforce due to their cost. This is visible mainly in areas that cannot be exported - construction industry, services.
Poor wages allow companies to undercut competition and gain market share. They also allow huge profits that can be used for investments and in that case it leads to more growth. They can invest in home country - in that case likely more automation or abroad, in that case new factories overseas that will supply cheap parts. In both cases it leads to economic growth of world as a whole and ultimately improvement of quality of life for everybody, including those poor workers, although for them it will not be immediate. There is a limit how much can be invested locally due to eventual labor shortages as you noted.
Cheap workforce from outside of UK could also be used to build schools, hospitals, new houses in the UK in near future, just like poor Brits built them during Victorian era.
B0ycey wrote:Exactly, if those two million people left tomorrow it would cause an economic/ health crisis. That is because there isn't enough people here to replace them as unemployment is low. The irony of course is if all EU citizens left, we would need new migrants from the Commonwealth to replace them. So you aren't getting rid of migration, just replacing them.
Yeah it's a very tricky issue to solve in the UK after Brexit. Boris can't blackmail EU with those workers, as we actually want them back home. He can't send them back immediately as that would trigger an economic crisis. If he sends them back gradually in smaller numbers, coupled with Brexit and poor future trade agreement it could lead to economic stagnation for some time (small economic growth would be negated by decrease of population). Moreover it means children of those immigrants will study at British schools, with every Brit paying for it and what can Britain do? Send them back after they paid for their education? That would be a very poor economic decision.
Job vacancies that get filled with immigrants, as long as economy is in good shape will result in new job vacancies being opened as immigrants also buy more goods and use services. Those new vacancies can again be filled by immigrants and it keeps repeating until whole Britain is one huge city - London. Which is why I advocate controlled immigration, not the chaos we have in EU right now.
B0ycey wrote:As for a shortage in services, that is a political shortfall. It is up to government to address this problem once they realised the significance of a population increase. If we can afford a few illegal wars we most definitely could have afforded a few more schools. The fact they never did was simply because they were ignorant of this issue until it was far too late. It was the same with Thatcher selling social housing for a quick buck. It is fine until the realisation that there isn't enough homes for everyone if you do that. And there wasn't even a plan to build new homes to replace them until recently from any government and the plan they have now still isn't enough.
UK debt as a percentage of GDP has risen from about 40% to about 80%. It had to pay huge sums of money to EU to trade and got huge number of immigrants in return (that also allowed higher growth to be fair). It needs replacement of Trident system and investment in state run services while being in high debt. Solving this is not going to be easy at all and continued membership of EU wouldn't make this easier either without some immigration control.
B0ycey wrote:But what if what you require from migrants is unskilled labor? It is no coincidence that migrants take jobs that are classed as undesirable and low skilled. There aren't many UK residence who want to work in care for example. And high skilled migrants will always be desirable for any nation in or out of the EU.
Selecting primarily unskilled immigrants results in uneven pressure on the home labour market as some locals will be affected by competition. Being unable to compete as they want to live decently they will resort to racism, fascism, vote for radical parties. It can work if it is controlled, but in EU it is not the case. Normally we could argue some locals could fill those job vacancies if unemployment rate is 6-8%, but in UK it seems to be about 3.8% so this doesn't apply as the bottom 3% tend to be quite useless in any country.
On top of that it introduces the problem of integration, as unskilled workers need to work many hours, will not read books, have poor knowledge of English language and not much time to learn it, tend to stick together more. US has experienced the same problem in early 20th century, it can be solved but is very slow, basically resolved only with children receiving British education. This problem doesn't exist for skilled immigrants as they come with the intention to integrate and become loyal citizens from the first generation.
Boris may experience a shock that Britain that is outside of EU isn't attractive for skilled EU workers anymore. We are talking about doctors, scientists, university teachers, IT professionals, engineers. British citizenship suddenly became worthless after Brexit to any prospective skilled immigrant. Winners will be US and EU.