Brexit discussion thread XIV (Please read OP before posting)

ancapailldorcha

Strazdas wrote: »

^^ A strange narrative has developed among the Brexiteers that everything was fine and dandy when it was just the EEC, but that the formation of the EU and the Single Market in the early 1990s was a negative thing and retrograde step. This completely ignoring the fact that the Single Market has been a huge success (and that the hated freedom of movement and ECJ was already part and parcel of EEC in the 1970s and 80s)

I think that this misses the point.

The problem here is that the stories of Tory lies, the buffoonery from Frost & co, the corruption and the continual stories of the UK's importance in the world diminishing and the neverending ebb of reports about companies leaving or whatever group suddenly being worse off only resonates with people who either voted remain, regret voting leave or who wish they'd bothered to begin with.

There is a sizeable demographic here who simply don't care. It's almost quaint seeing these stories followed by tweets from the likes of Ian Dunt or similar wondering if this will be what does for the government when the main bloc of Brexit/Tory voters couldn't care less. They have what they want and they're safe and secure in the knowledge that they're going to be just fine.

After all, they have their Waitrose, their buy-to-let property portfolios, their holiday homes, their secure pensions and so on and so forth. Witness the shift of the narrative away from the economic and the financial to the purely cultural. Witness the government never changing from campaign mode to governing mode. The second that popping to their Malaga holiday home becomes even slightly inconvenient or when they have to buy a tourist visa is when they'll appear stamping their feet like the tired, dull imperialists that they are.

And that's the problem. It's reflected in the structure of Parliament, in the voting system, the response to covid and pretty much anything else you'd care to name. You numb a huge chunk of the electorate with what Michael Gove termed "Shock & Awe" (a term I only ever recall hearing in my World War 2 strategy game funnily enough) while you convince some oldsters that the Liberals, Corbynites, Greens and so on want to take the country away from them while doling out some crumbs via the winter heating allowance, free TV licence and such.

I don't see a way forward. Starmer thinks that an updated version of Ed Miliband's anti-immigration mugs of 2015 is the answer, nobody knows who leads the Lib Dems now and the Greens will only ever get to far thanks to FPTP. Even Johnson's old pal, Dominic Cummings turning traitor had no effect. That's how bad things have gotten and there's no visible path to improvement that I can see.

Strazdas

ancapailldorcha wrote: »

I think that this misses the point.

The problem here is that the stories of Tory lies, the buffoonery from Frost & co, the corruption and the continual stories of the UK's importance in the world diminishing and the neverending ebb of reports about companies leaving or whatever group suddenly being worse off only resonates with people who either voted remain, regret voting leave or who wish they'd bothered to begin with.

There is a sizeable demographic here who simply don't care. It's almost quaint seeing these stories followed by tweets from the likes of Ian Dunt or similar wondering if this will be what does for the government when the main bloc of Brexit/Tory voters couldn't care less. They have what they want and they're safe and secure in the knowledge that they're going to be just fine.

After all, they have their Waitrose, their buy-to-let property portfolios, their holiday homes, their secure pensions and so on and so forth. Witness the shift of the narrative away from the economic and the financial to the purely cultural. Witness the government never changing from campaign mode to governing mode. The second that popping to their Malaga holiday home becomes even slightly inconvenient or when they have to buy a tourist visa is when they'll appear stamping their feet like the tired, dull imperialists that they are.

And that's the problem. It's reflected in the structure of Parliament, in the voting system, the response to covid and pretty much anything else you'd care to name. You numb a huge chunk of the electorate with what Michael Gove termed "Shock & Awe" (a term I only ever recall hearing in my World War 2 strategy game funnily enough) while you convince some oldsters that the Liberals, Corbynites, Greens and so on want to take the country away from them while doling out some crumbs via the winter heating allowance, free TV licence and such.

I don't see a way forward. Starmer thinks that an updated version of Ed Miliband's anti-immigration mugs of 2015 is the answer, nobody knows who leads the Lib Dems now and the Greens will only ever get to far thanks to FPTP. Even Johnson's old pal, Dominic Cummings turning traitor had no effect. That's how bad things have gotten and there's no visible path to improvement that I can see.

An interesting feature of it all is that they don't like anyone from outside their bubble. They hate the French, the Germans and the Irish for starters - they surely don't like the US or Canada under Biden and Trudeau. It's a strange place for a country with the UK's history to find themselves......retreating into isolationism, nationalism and populism.

embraer170

ArmaniJeanss wrote: »

It's here.
https://www.arte.tv/en/videos/100300-034-A/brexit-borders/
It's 30 minute long, so not exactly bite-sized viewing. Quite interesting though.

Brexit has definitely created some new jobs. Not sure that will do much good at all for the economy or the country's competitiveness.

ancapailldorcha

Strazdas wrote: »

An interesting feature of it all is that they don't like anyone from outside their bubble. They hate the French, the Germans and the Irish for starters - they surely don't like the US or Canada under Biden and Trudeau. It's a strange place for a country with the UK's history to find themselves......retreating into isolationism, nationalism and populism.

It's not that strange when you think about it. The UK has never suffered a significant military defeat like many European nations have and even when they have suffered setbacks on that front, they've rarely directly impacted Britain as an island.

The result is this warped, stunted nationalistic spirit that is anathema to the compromise and collaboration that are de rigeur to modern international politics. Modern powers know they can't enforce their will as they once did so influence is the order of the day and international entities are key in this. The UK has remained trapped in its cultural timewarp, cossetted if you will by prosperity, good governance (for the most part) and its flexibility. Brexit torpedoes the latter two of these and will cause long term damage to the UK's economy.

The result is that one chunk of the population knows it'll be grand and just wants to see what will happen. Another has just given up and is just going with it. I'm reminded of a quote from a senior US official whose name I can't possibly remember. He once stated that a problem he had with the previous US president was that he could work out "what does he mean when he says words?"

Yesterday it was fishing and sovereignty but when the fishermen dumped their catches in central London or when unelected elites continued to run the nation, not a peep was uttered. They'll just say anything to fulminate against the EU, the left, liberals and so on. None of it means anything. The issue in question is just a vector for their vitriol. There was a time when the Tory party would flirt with this demographic without giving into it.

Now, it's been taken over by nativism and demagoguery.

ancapailldorcha

Came across a rather interesting document from McDonald's today. I'll share it here. It's about five pages long.

We have identified two particular challenges in the labour market in the coming years:

 Shrinking pool of UK labour: The UK workforce is shrinking, because of too many older
workers leaving the labour market and too few young people entering it. The number of
people in employment is currently growing at 1.2% per year. However, the growth rate of the
working age population, including migration, is just 0.26%. As a result, the pool of available
labour is shrinking rapidly, reflected in the fact that employment rates are at their highest
since comparable records began in 1971.
If these rates of employment and working age population growth are maintained, our
projections show that the workforce supply and demand curves intersect around mid-2022, at
which point the economy will effectively ‘run out of labour’ to fuel further economic growth.
(Figures based on ONS data, September 2017).

 Full employment in certain parts of the UK: The equilibrium jobless rate is the point where
an economy is effectively at full employment. The Bank of England’s ‘rule of thumb’ had been
that the UK equilibrium jobless rate was when unemployment fell below 5%. In January 2017,
Michael Saunders, an external member of the Bank's Monetary Policy Committee, suggested
that the UK equilibrium jobless rate could be as low as 4% – although he stressed the
uncertainty around this figure.
The overall UK unemployment rate currently stands at 4.3%, with six regions at or below the
BoE’s lower 4% equilibrium jobless rate estimate: North West (4.0%); East Midlands (3.9%);
Scotland (3.8%); East (3.8%); South West (3.7%); South East (3.2%). This makes recruitment
in these areas extremely challenging. (ONS data, September 2017).

The combination of these two challenges mean that we are reliant on non-UK labour to meet our
business needs. As a result, 12% of our workforce come from the EEA, and 5.3% from the rest of the
world (figures from end of August 2017). Some restaurants have a greater proportion of non-UK
nationals, particularly in the South East, and London. Our restaurants in these regions are staffed by
a greater proportion of EEA workers. This is at its most acute in London, where 35.8% of our
employees are from the EEA.

Link.

While it's easy to harden one's heart when it comes to giant US multinationals, this document does paint a grim picture of the prospects for UK hospitality in general. I've noticed many "Staff wanted" signs across central London recently and I've not seen my bartending Hungarian housemate in nearly a month, save for today.

From The Economist:

Job postings for pub and restaurant positions on Indeed, a recruitment website, were up by 82% in the four weeks to May 7th, and are now 4% above their pre-pandemic level.

...

Wage rates do not yet seem to be responding to the shortage of staff. According to Indeed, the median advertised salary in the sector was £9.25 an hour from January until April and has ticked up to just £9.38 an hour in May even as the volume of complaints from bosses has risen. Some larger firms are considering raising pay but enforced closures have drained the reserves of many of their smaller peers. “There just isn’t any more money in the bank,” says Mr Andrews, who says his firm is using staff food, discounts and treats to attract employees. “When the industry reopens fully, it is going to have to re-evaluate what it pays.”

Link.

A casual glance suggests that the stereotype of younger people not being interested in hospitality much of the time is holding water. A big part of the Brexit campaign was an aversion to the purported suppression of wages by immigration from the EU but wages aren't really rising and the British youth aren't chomping at the bit to pull pints and wait tables.

Have to say that I did not see this coming at all.

embraer170

ancapailldorcha wrote: »

Came across a rather interesting document from McDonald's today. I'll share it here. It's about five pages long.



Link.

While it's easy to harden one's heart when it comes to giant US multinationals, this document does paint a grim picture of the prospects for UK hospitality in general. I've noticed many "Staff wanted" signs across central London recently and I've not seen my bartending Hungarian housemate in nearly a month, save for today.

UK at full employment. That will be sold by many as a big Brexit win.:rolleyes:

CelticRambler

ancapailldorcha wrote: »

A casual glance suggests that the stereotype of younger people not being interested in hospitality much of the time is holding water. A big part of the Brexit campaign was an aversion to the purported suppression of wages by immigration from the EU but wages aren't really rising and the British youth aren't chomping at the bit to pull pints and wait tables.

Have to say that I did not see this coming at all.

It's not just in the UK that there's a problem with recruitment into the hospitality sector. I recently had the chance to traipse the streets of a reasonably large French town just as bars and restaurants were allowed re-open, and every second establishment had "staff wanted" signs in the window.

The pandemic has forced/given the opportunity to thousands upon thousands of people to reconsider what kind of working conditions they're prepared to tolerate; and many of them have understandably re-defined their terms of reference for the phrase "quality of life".

The problem for post-Brexit Britain is that working in the various service industries is not generally compatible with a good quality of life; and Britain's economy is heavily dependent on ... service industries.

That Economist article points out that pub and restaurant owners just don't have the funds available to pay higher wages; and the Cornish fishmonger is selling her cattle to pay for her paperwork. Two examples of how businesses in a post-Covid, post-Brexit Britain are literally going to run out of human and/or financial resources unless the government wakes up to reality.

Padre_Pio

Business can't just hire up at the drop of a hat. Until 4 weeks ago, there was still some doubt that pubs and restaurants would even open in Ireland.

Owners were burned just after Christmas by a crack 6 month lockdown.

Add in the uncertainty of whether they can even turn a profit through outdoor dining and distancing. It'll be another 6 months before the gears of hospitality industry are back up to speed.

Other countries will experience the same uncertainty.

Strazdas

ancapailldorcha wrote: »

It's not that strange when you think about it. The UK has never suffered a significant military defeat like many European nations have and even when they have suffered setbacks on that front, they've rarely directly impacted Britain as an island.

The result is this warped, stunted nationalistic spirit that is anathema to the compromise and collaboration that are de rigeur to modern international politics. Modern powers know they can't enforce their will as they once did so influence is the order of the day and international entities are key in this. The UK has remained trapped in its cultural timewarp, cossetted if you will by prosperity, good governance (for the most part) and its flexibility. Brexit torpedoes the latter two of these and will cause long term damage to the UK's economy.

The result is that one chunk of the population knows it'll be grand and just wants to see what will happen. Another has just given up and is just going with it. I'm reminded of a quote from a senior US official whose name I can't possibly remember. He once stated that a problem he had with the previous US president was that he could work out "what does he mean when he says words?"

Yesterday it was fishing and sovereignty but when the fishermen dumped their catches in central London or when unelected elites continued to run the nation, not a peep was uttered. They'll just say anything to fulminate against the EU, the left, liberals and so on. None of it means anything. The issue in question is just a vector for their vitriol. There was a time when the Tory party would flirt with this demographic without giving into it.

Now, it's been taken over by nativism and demagoguery.

Indeed, but isolationism has never been part of the British / English mindset. It was actually the US who were traditionally inward looking and who were very reluctantly drawn into both WW1 and WW2.

It's quite some sight to see the Tory Party and Brexiteer England retreat into nationalism, populism and isolationism and regarding everyone outside their jingoistic bubble as a potential enemy.

I do agree that a series of occurrences and what you called stunted nationalism have left them in this situation : also, a failed FPTP system and hijacking of an advisory referendum, a weak parliament and no written constitution, a deeply corrupt media.....but it all means they are in a very bad place right now (much worse than Berlusconi's Italy for example).

Leroy42

Padre_Pio wrote: »

Business can't just hire up at the drop of a hat. Until 4 weeks ago, there was still some doubt that pubs and restaurants would even open in Ireland.

Owners were burned just after Christmas by a crack 6 month lockdown.

Add in the uncertainty of whether they can even turn a profit through outdoor dining and distancing. It'll be another 6 months before the gears of hospitality industry are back up to speed.

Other countries will experience the same uncertainty.

All true. The difference is that other countries haven't undertaken a massive government sponsored anti immigrant campaign and made their country as unwelcome as possible

reslfj

Strazdas wrote: »

A strange narrative has developed among the Brexiteers that everything was fine and dandy when it was just the EEC, but that the formation of the EU and the Single Market in the early 1990s was a negative thing and retrograde step. This completely ignoring the fact that the Single Market has been a huge success (and that the hated freedom of movement and ECJ was already part and parcel of EEC in the 1970s and 80s)

The FoM of people was in the "Treaty of Rome" signed March 1957. A restricted version was in the European Coal and Steel Community agreed in 1951 (for coal and steel workers).

Lord Cockfield during his term (1985-89) first and foremost created the single market for goods - i.e. adding (minimum) standards, rules, and regulations to no tariffs - and worked for the single market for services.

The EEC was much more than just about tariffs - and it was communicated widely in the early 1970's (read the text below)

Lars

Sam Russell

reslfj wrote: »

The FoM of people was in the "Treaty of Rome" signed March 1957. A restricted version was in the European Coal and Steel Community agreed in 1951 (for coal and steel workers).

Lord Cockfield during his term (1985-89) first and foremost created the single market for goods - i.e. adding (minimum) standards, rules, and regulations to no tariffs - and worked for the single market for services.

The EEC was much more than just about tariffs - and it was communicated widely in the early 1970's (read the text below)

Lars

It should not be forgotten that the formation of what has become the EU was primarily to end war in Europe, end poverty and hunger in Europe, and bring peace and prosperity to Europe by working as a single community.

Prior to its formation, Europe had been riven by wars between European nations, most recently (at the time of its formation) the World Wars I and II that pitted the UK and France and Russia against Germany.

Unfortunately, the new arrangement did not include Russia which was a sad omission, but given the political aims of Russia, that is a tragedy, but not surprising.

Now, the European project has lost the UK. Another tragedy.

Seth Brundle

It appears that the recent heralding of a new Trade Yacht has come to a premature end. Under the recently agreed WTO "global procurement agreement", Liz Truss claimed that overseas groups could still bid for UK public sector contracts "delivering better value for UK taxpayers". Apparently under item 47 of annex 4 of UK schedule of GPA says procurement of "ships, boats & floating structures, except warships" must be advertised internationally & awarded without discrimination (by contrast US, Japan, Australia have exempted non-military ships from this obligation).
https://twitter.com/PickardJE/status/1402140834938732550
Now it seems that the UKs Defence ministry has been tasked with overseeing the project who plan to staff the yacht with Royal Navy personnel. However, this then gives other countries the right to take legal action either in UK courts or at the WTO.
Apparently shadow trade secretary Emily Thornberry said ministers had failed to take "the most basic and simple steps" to guarantee the boat could be built in Britain. "It is yet more copper-bottomed, ocean-going incompetence from Boris Johnson and Liz Truss."

Capt'n Midnight

Seth Brundle wrote: »

It appears that the recent heralding of a new Trade Yacht has come to a premature end.

More kite flying.

Liz (the other one) wouldn't let them use Philips name for it.

Sam Russell

Capt'n Midnight wrote: »

More kite flying.

Liz (the other one) wouldn't let them use Philips name for it.

I was surprised at this. Aren't the Greeks a leading light in yachts and ships. It would add a bit of an air of competence if this yacht carried a Greek's name.

Peregrinus

Sam Russell wrote: »

I was surprised at this. Aren't the Greeks a leading light in yachts and ships. It would add a bit of an air of competence if this yacht carried a Greek's name.

The Royal Family are not concerned about the reputation of the yacht; they are concerned about the reputation of the late Duke, if his name is linked with one of Johnson's half-arsed, ill-thought-out, boosterish schemes — the Garden Bridge, the Irish Sea Tunnel, the "National Flagship".

Sam Russell

Peregrinus wrote: »

The Royal Family are not concerned about the reputation of the yacht; they are concerned about the reputation of the late Duke, if his name is linked with one of Johnson's half-arsed, ill-thought-out, boosterish schemes — the Garden Bridge, the Irish Sea Tunnel, the "National Flagship".

That reference to a Greek's name was meant as a joke.

I fully understand why Johnson's attempt at boosterism fails to impress and falls flat on Her Majesty - she has been on the throne quite a while at this stage and seen it all before.

Seth Brundle

I'm also only seeing now something that was reported yesterday following David Frost's article in which he claimed that the UK officials underestimated the effect of the NI Protocol.
However, Theresa May's former chief of staff, Lord Gavin Barwell, has said that Boris Johnson's government "knew it was a bad deal". They "agreed it to get Brexit done", he argued adding that Mr Johnson's government had intended "to wriggle out of" the protocol later.
Now whilst this comes as no surprise to us, it is interesting to hear it come from someone involved.

https://twitter.com/GavinBarwell/status/1401805490183606272

J Mysterio

ancapailldorcha wrote: »

I think that this misses the point.

The problem here is that the stories of Tory lies, the buffoonery from Frost & co, the corruption and the continual stories of the UK's importance in the world diminishing and the neverending ebb of reports about companies leaving or whatever group suddenly being worse off only resonates with people who either voted remain, regret voting leave or who wish they'd bothered to begin with.

There is a sizeable demographic here who simply don't care. It's almost quaint seeing these stories followed by tweets from the likes of Ian Dunt or similar wondering if this will be what does for the government when the main bloc of Brexit/Tory voters couldn't care less. They have what they want and they're safe and secure in the knowledge that they're going to be just fine.

After all, they have their Waitrose, their buy-to-let property portfolios, their holiday homes, their secure pensions and so on and so forth. Witness the shift of the narrative away from the economic and the financial to the purely cultural. Witness the government never changing from campaign mode to governing mode. The second that popping to their Malaga holiday home becomes even slightly inconvenient or when they have to buy a tourist visa is when they'll appear stamping their feet like the tired, dull imperialists that they are.

And that's the problem. It's reflected in the structure of Parliament, in the voting system, the response to covid and pretty much anything else you'd care to name. You numb a huge chunk of the electorate with what Michael Gove termed "Shock & Awe" (a term I only ever recall hearing in my World War 2 strategy game funnily enough) while you convince some oldsters that the Liberals, Corbynites, Greens and so on want to take the country away from them while doling out some crumbs via the winter heating allowance, free TV licence and such.

I don't see a way forward. Starmer thinks that an updated version of Ed Miliband's anti-immigration mugs of 2015 is the answer, nobody knows who leads the Lib Dems now and the Greens will only ever get to far thanks to FPTP. Even Johnson's old pal, Dominic Cummings turning traitor had no effect. That's how bad things have gotten and there's no visible path to improvement that I can see.

Check out Naomi Klein's 'The Shock Doctrine', it's excellent.

https://en.m.wikipedia.org/wiki/The_Shock_Doctrine

ancapailldorcha

J Mysterio wrote: »

Check out Naomi Klein's 'The Shock Doctrine', it's excellent.

https://en.m.wikipedia.org/wiki/The_Shock_Doctrine

I've read it but I don't think it's a good fit for this situation. When we had Osborne and Cameron running things, it made much more sense as we had huge transfers of public and state assets to private billionaires and companies such as the NHS procurement rework and the Atos scandal.

With Johnson, it really just boils down to his nativism and laziness. Sure, the usual Tory corruption is happening anyway but that was always going to be the case. In the Cameron years, there was clearly a neoliberal playbook which was being followed. Now, it's just chaos.

eire4

J Mysterio wrote: »

Check out Naomi Klein's 'The Shock Doctrine', it's excellent.

https://en.m.wikipedia.org/wiki/The_Shock_Doctrine

It is an excellent book. Her book No Logo is another one I would recommend although to be fair neither is directly on point here.

Akrasia

embraer170 wrote: »

UK at full employment. That will be sold by many as a big Brexit win.:rolleyes:

In fairness to the brexiteers, when there is full employment wages go up for the lower skilled roles, so their argument that immigration drives down wages could be borne out if McDonalds needs to eat into their profits to pay more for staff

Overall, excessive immigration control depresses the economy and hurts everyone, but in the short term, it could cause wages to rise

The stumbling block here though is that the many of the Tories are heartless monsters who would prefer to use this to cut benefits and force people to work at the current subsistence wage, rather than let market forces attract workers back in at a less exploitative wage

Strazdas

Akrasia wrote: »

In fairness to the brexiteers, when there is full employment wages go up for the lower skilled roles, so their argument that immigration drives down wages could be borne out if McDonalds needs to eat into their profits to pay more for staff

Overall, excessive immigration control depresses the economy and hurts everyone, but in the short term, it could cause wages to rise

The stumbling block here though is that the many of the Tories are heartless monsters who would prefer to use this to cut benefits and force people to work at the current subsistence wage, rather than let market forces attract workers back in at a less exploitative wage

Any evidence for that? It's thrown out constantly by Brexiteers but they never seem to back it up.

54and56

Strazdas wrote: »

Any evidence for that? It's thrown out constantly by Brexiteers but they never seem to back it up.

I doubt Brexiteers say excessive immigration "control" depresses the economy!!

54and56

Akrasia wrote: »

In fairness to the brexiteers, when there is full employment wages go up for the lower skilled roles, so their argument that immigration drives down wages could be borne out if McDonalds needs to eat into their profits to pay more for staff

Wages are an input cost just like steel or any other raw material and ultimately feed into end pricing. McDonalds or any other business won't sacrifice profits unless they have to and if wages go up across the economy so too will the selling price of their products.

CelticRambler

54and56 wrote: »

McDonalds ... won't sacrifice profits unless they have to and if wages go up across the economy so too will the selling price of their products.

Hence the Big Mac Index, where Britain currently lies alongside Singapore (well, how about that) but can perhaps look forward to joining the non-EU European countries of Norway and Switzerland at the top of the table? That's a win for Britain, innit?

Peregrinus

54and56 wrote: »

Wages are an input cost just like steel or any other raw material and ultimately feed into end pricing. McDonalds or any other business won't sacrifice profits unless they have to and if wages go up across the economy so too will the selling price of their products.

McDonald's will seek to maximise profits, but this doesn't necessarily translate into recovering the full cost of the wage increase through price increases. The reason for this is of course that price increases will cause sales to fall. Maintaining your margin but on a lower volume of sales means lower profits. So McDonald's will be looking for the sweet spot - how much of the wage increase can they pass to customers before the effect on sales is such that this costs more than simply absorbing the wage increase would cost?

ancapailldorcha

54and56 wrote: »

Wages are an input cost just like steel or any other raw material and ultimately feed into end pricing. McDonalds or any other business won't sacrifice profits unless they have to and if wages go up across the economy so too will the selling price of their products.

The problem is that McDonald's will have flexibility that small chains and independent businesses won't. It could be the difference between a lot of small enterprises closing and surviving.

Peregrinus

ancapailldorcha wrote: »

The problem is that McDonald's will have flexibility that small chains and independent businesses won't. It could be the difference between a lot of small enterprises closing and surviving.

McDonalds is a franchise operation. Most McDonald's branches are small enterprises.

But, yeah, the point is well made. If — and it's a very big "if" — the effect of Brexit is to contract the labour supply so much as to drive up wages at the lower end of the market, that puts pressure on businesses in which unskilled or low-skilled labour is a significant cost component. That plays out in ways which mean the net effect of Brexit (in this regard) is some combination of (1) higher wages for people in low-skilled jobs, but (2) fewer such jobs, and (3) higher prices for the customers of the surviving businesses that employ low-skilled labour.

But all of that depends on the assumption that low wage rates are the consequence of an oversupply of low-skilled labour due to EU citizens exercising their free movement rights. I don't think there's a lot of evidence that this is in fact the case. I think most accounts for the stagnation of UK real wages at the low end of the market point to low worker productivity as a major factor. If that's correct, then contracting the labour supply without also improving productivity will not result in higher wages; just in fewer jobs.

And even that assumes that ending free movement will contract the labour supply at the lower end of the market. It remains to be seen how true that is.

Sam Russell

Peregrinus wrote: »

McDonalds is a franchise operation. Most McDonald's branches are small enterprises.

But, yeah, the point is well made. If — and it's a very big "if" — the effect of Brexit is to contract the labour supply so much as to drive up wages at the lower end of the market, that puts pressure on businesses in which unskilled or low-skilled labour is a significant cost component. That plays out in ways which mean the net effect of Brexit (in this regard) is some combination of (1) higher wages for people in low-skilled jobs, but (2) fewer such jobs, and (3) higher prices for the customers of the surviving businesses that employ low-skilled labour.

But all of that depends on the assumption that low wage rates are the consequence of an oversupply of low-skilled labour due to EU citizens exercising their free movement rights. I don't think there's a lot of evidence that this is in fact the case. I think most accounts for the stagnation of UK real wages at the low end of the market point to low worker productivity as a major factor. If that's correct, then contracting the labour supply without also improving productivity will not result in higher wages; just in fewer jobs.

And even that assumes that ending free movement will contract the labour supply at the lower end of the market. It remains to be seen how true that is.

Another factor to take into account is the general rate of inflation. If the general rate of inflation is rising, then the effect of an enterprise increasing its prices is more acceptable to customers because 'it's inflation' and it is just accepted. During high inflation, prices rise just because the enterprise can get away with it without any down side, even though there might be no reason for that particular enterprise to raise prices.

Now we can see that the effect of Brexit is to increase costs due to increased cost of customs declarations and other red tape, so that will wash through the economy, and unaffected businesses will take advantage.