There are many causes behind migration. One of the commonest cited is skill shortages. But as liberal economists argue, that’s often a misnomer. All that is in fact happening is a wage shortage: raise the wages and sufficient skilled workers will appear. Today, the Chartered Institute of Personnel and Development (CIPD) and KPMG have issued a report today which suggests the liberal economists are right. They say that employers facing skill shortages would employ more British workers if they could pay them less (rather suggesting the skills are available, but at a price employers don’t want to pay).

Exploiting migrant workers to undercut the existing workforce simply sets worker against worker. And whilst employers may benefit in the short run from lower wage costs, the BNP are more likely to be the long term beneficiaries.

Instead, unions have been arguing that paying migrants the same as the existing workforce (and giving them all the other rights we have won over the years) is the best way to combat exploitation, undercutting and racial strife. The national minimum wage has had some effect in making undercutting less possible, but the CIPD take potshots at that, too. Read more »

   Filed under: Earnings, Migration, Minimum wage | 1 Comment »

The rise in the minimum wage announced today is small but it is a rise.  The strenuous megaphone lobbying by the business associations to freeze the minimum wage (covered elsewhere on this blog) was faced down.  An extra £2.45 per week for a full-time minimum wage worker isn’t a lot but the mean-spirited and economically myopic bunch at the CBI and British Chambers of Commerce would have had it at £0.00p.  So a small glimmer within the gloom.

   Filed under: Minimum wage | Comments Off

I mentioned before how pressure for a freezing of the minimum wage has grown in recent days.  Here’s four reasons why this is a bad idea. Read more »

   Filed under: Labour market, Minimum wage, Recession | Comments Off