END OF CHEAP LABOUR RISKS JOB CUTS AND BUSINESS CLOSURES SAYS NEW REPORT
The world of work is going to be “reshaped” because of the end of unlimited cheap labour, threatening job losses, business closures and weaker pay growth, a new report says.
The Resolution Foundation said the UK’s labour market was at a “tipping point” because of falling migration and risinglabour costs.
The think tank warned that failure to tackle the issues in the Brexit negotiations could be “hugely disruptive” for the economy.
The recent era of increasing numbers of people being in low-paid jobs was coming to an end, fuelled by a reduction in the supply of workers, said the report.
Migration is already falling, a trend likely to continue because of uncertainty about the status of workers, improved job opportunities in Europe and the fall in the value of the pound, it was predicted.
Torsten Bell, director of the Resolution Foundation, said: “Leaving the EU will have a profound effect on people’s lives, and nowhere will this be felt more strongly than in the workplace.
“The British labour market is at a tipping point, with big Brexit and non-Brexit related changes from lower migration to a higher minimum wage coming together over the next few years.
“How government and firms respond to these changes is as central to preparations for Brexit as negotiations in Brussels.”
Economic analyst Stephen Clarke added: “Low-paid labour will no longer be as cheap and will no longer be as available as British firms have grown used to. Businesses will respond to these changes in a number of ways, depending on their ability to automate or recruit more workers, but in almost all cases, they’ll need a helping hand from government to get the wider economic conditions right.
“With Brexit negotiations finally under way, that support for business should begin right now. This means clarity over the Government’s new immigration regime, a renewed drive to bring older and lower skilled people into the labour market, and action to ensure our employment and benefit regimes keeps pace with these changes in the world of work.”
A Government spokesman said: “Since the referendum, the Government has engaged with businesses across the country and we are now intensifying this process to ensure the voice of the British business community is being heard and reflected throughout our negotiations.”