Wednesday 19 September 2018

Brexit and the Business Backlash

According to this article Jane Gratton, head of business at the British Chambers of Commerce, said:

“Any sudden cutoff of EEA skills and labour would be concerning, if not disastrous, for firms across a wide range of regions and sectors.”
I should first of all note that we have approximately 67 million people living in the UK, and I think something like 15% of these people were born abroad.   Due to the fact that over the past couple of decades there has every year been a surplus of immigrants over emigrants, our population is continually increasing.  At the current rate of net migration, in 50 years time the population will increase from 67 million to 83 million, in 100 years there will be 107 million people. 

Big business says this situation must continue (for years? decades? forever?) otherwise they claim it'll be economically catastrophic. This means they regard a successful economic model as being parasitic on the UK population spiralling ever upwards, even though parts of the UK -- precisely those parts of the UK where migrants tend to settle -- are already vastly overcrowded. That presents quite a dilemma.  Either suffer an economic catastrophe by reducing net migration close to zero so the size of the UK population remains more or less static, or have a continually increasing population with all the population problems this will entail (having to build new homes, strains on public services, pressure on infrastructure, social cohesion, etc).

I submit that having a continually exponential increase in population is simply not viable over the long-term.  If these firms depend upon this scenario, then they simply don't deserve to thrive. They need to adapt to the reality that the UK population cannot simply keep increasing forevermore. They need to accommodate themselves to this reality.

I am also cynical that such a dilemma exists. First of all, even economists predictions are scarcely better than flipping a coin. But, apart from that, there are vested interests here and we should treat the predictions of big business with a grain of salt. Clearly it favours employers to have a large pool of employees, especially those who are agreeable to work for low wages, since this puts a general downward pressure on wages resulting in greater profits for employers. It's also worth noting that the negative consequences of ever more migration -- housing, infrastructure pressure, strains on public services, effects on social cohesion etc -- don't fall upon employers.

Conversely, what is advantageous for employers is generally disadvantageous for employees.  Wages will only rise if workers are in fairly tight supply, which of course won't happen with the immigration policy of the last 20 years or so. So mass immigration has a negative effect for many workers as their wages are suppressed. Workers also have to contend with all the other aforementioned negative consequences of an ever spiralling increasing population.




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