Should global skills markets dictate wages in the UK?

A summary of what they said is the commonly-held belief that “They’re coming over here, taking our jobs” with the addition of “and keeping our wages low”.

I need to confess at this point that I am an economic migrant myself (holding both Irish and South African citizenships).

In digging around for the stats, I found that the UK has seen an increase in immigration and we have seen a fall in wages.

Whether the first is the main cause of the latter is in some doubt, however. Things like inflation play a bit role.
See: Are our foreign workers really holding down UK wages?
See: Economic Impacts of Immigration to the UK

What is blindingly obvious for anyone working in HR, especially in a multinational company, is that we now fish in a global talent pool when we need to recruit skills.

If the right skills at the right price can’t be found in the UK, then employers are pushed to look further afield and either bring foreigners here to fill the gaps, or they establish subsidiaries overseas or subcontract foreign suppliers.

And here’s the rub.

Broadly, wages outside the UK (and other Western economies) tend to be lower than here.

So the overall effect is a suppression of wages in wealthier economies.

This is regardless of whether these foreign workers land on our shores or not (despite what the Daily Mail would have us believe Mark Carney, govenor of the Bank of England said: Foreign workers drag down UK wages, says bank chief)

We are playing in a global talent and wages pool, so pay levels will gradually fall or rise in line with global norms.

For many skills, sadly especially those at the lower paid end, wages will therefore gradually sink for UK workers if we allow global markets to dictate to outcome the outcome.

Is that really a good idea?

And can we do anything about it anyway?