Larry Ellliott, the Guardian's Kipper economics correspondent.
https://www.theguardian.com/business/20 ... -low-wages
If that way of doing things – in which the flipside of over-reliance on unskilled, cheap labour has been persistent underinvestment – is now coming apart then that is a welcome development and not a bad thing.
Now do the fall in trade with our biggest market. What does that do to incentives to invest?
There is something seriously wrong about an economy where more than half the people living below the official poverty line are from working households and where a large chunk of the welfare bill is spent supplementing the incomes of those who do not earn enough to get by.
And how much of this is down to immigration exactly? Probably not very much when compared to stuff wholly within our control, like government spending, stronger labour market regulation, lack of affordable housing.
Employers have only a limited range of options if they find themselves short of staff and it is not possible to call up reinforcements from overseas. They can invest more in labour-saving equipment; they can invest more in training to raise skill levels; or they can pay more in order to attract staff.
Another option might be for the employer to get out a calculator and do some basic management accounting. And conclude that it's no longer worth doing some things they were doing before because the margin is now too low. Talking of management accounting, maybe Tesco do some and conclude they can screw suppliers a bit harder to pay for these lorry driver bonuses. Neither of these would be wage bonanzas.
That is not quite the end of the story, because increasing the supply of overseas workers also boosts demand. The new employees are also consumers and spend the money they earn like everybody else. The extra demand creates more jobs, although mainly in low-paid sectors.
Nor is that the end of the story. The extra workers pay in more tax than they cost, and increase productivity. Not sure we can afford to piss those away in the current climate.