NET MIGRATION EFFECT ON WAGES

The Impact of Net Migration in the UK Economy and the Effect on Wages

The Impact of Net Migration in the UK Economy and the Effect on Wages

Introduction

The issue of migration has accelerated during the last 10 years as a minor issue. In a public opinion poll, people narrated the issue of net migration in the UK economy as one of the leading concerns. According to the regular poll conducted by Ipsos MORI, 42% of the study participates said the issue of migration is among the top four issues of the day (MORI, 2008). On the other hand, the discussion focused on problems like an increase in the net migration, the effect of immigration on the economic growth, contribution of immigrants to and use of public facilities, and the social and cultural impacts of new immigrants. The major emphasis is on public debate is on the impact of net migration on the labour market, especially on wages.

The members of the political party gave an impression on the political spectrum rights is that migration is reducing the worker's wages in Britain. Along with, a significant increase in joblessness because of economic downturn in UK, the claim that immigrants “take” job from natives or decrease wages take a strong hold on this thought. On the other hand, pro-migration, certain politicians and government ministers believe pressure groups, academics and tanks have been making efforts to employ the current evidence to precede the issue that immigrants facilitate the labour market operations through stemming shortages of labour.

This research aims to cut through the hyperbole and distortion of recent discussion. This paper offers an informed and balanced assessment of the best present statistics and evidence on the impact of net migration in the UK economy and the effect on wages. Additionally, having carried our descriptive and regression analysis of UK labour market to demonstrate the impact of migration on wages, as well as provide discussion on policy.

Theoretical Context

There are two underlying principles for the often voiced conviction that immigrants possibly decrease the UK-born workers' earnings. First idea is based on the idea that immigrants reduce the earning of UK workers. Second is based on the idea that immigrants boost the labour supply in UK economy that results in decreasing levels of wage, which has an effect on both migrant and UK-born workers.

Undercutting Argument

Based on the undercutting argument, migrants will denigrate UK labour force arise from the insight that they will be ready to do certain types of jobs on lower wages, in comparison to the current wages rate for the job. This argument is rationalise on two basis: first, that many immigrants remit considerable amount of wages to their home countries to support their families; and second, that migrants are willing to work on low wages and ready to live on a lower standard of living in Britain as compared to local UK population as they are used to this standard of living and are in UK on a temporary basis ...