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The cost of Brexit for us; the ordinary people

(1000 Posts)
MaizieD Mon 12-Dec-16 08:29:59

There have been headlines over the weekend, in response to the recent polling, on the lines of "Nobody voted for Brexit in order to become poorer" (though they were good at dsmissing warnings that they would as 'scaremongering') Richard Murphy takes us through 10 reasons why he thinks it is inevitable. If anyone has an authoritative source to counter his points I'd be happy to see it.

POGS Mon 12-Dec-16 11:02:15

Brexit 6.

MaizieD Mon 12-Dec-16 13:10:18

We haven't finished Brexit 5 yet.

Does no-one have any counter arguments?

whitewave Mon 12-Dec-16 15:10:11

Only those who don't listen to truth - post truth.

durhamjen Mon 12-Dec-16 15:42:43

A blue link, as yours didn't seem to work, Maizie.

rosesarered Mon 12-Dec-16 16:33:18

Apart from a few die hards who voted Remain, I think that most Gransnetters are ever so slightly bored with all these threads on Brexit.tchwink
After all, 'tis the season to be jolly.

granjura Mon 12-Dec-16 17:32:04

granjura Mon 12-Dec-16 17:34:36

roses be as bored as you wish. An awful lot of people are not going to be jolly at all- including most leavers- when they realise how hard it will hit them in the pocket in 2017-

more and more will realise they have been mis-sold a very sick pup - and are going to go ape ... and not be jolly at all

ho ho ho

granjura Mon 12-Dec-16 17:37:21


roses and other staunch leavers - as you are being so jolly?

Ana Mon 12-Dec-16 17:38:14

I refuse to go ape! tchgrin

granjura Mon 12-Dec-16 18:14:48

the more I see what is going on currently in the world- the more I think going ape is a jolly good idea indeed smile

durhamjen Mon 12-Dec-16 18:30:41

You really don't need to go on every thread, roses, like all the others who are slightly bored.
On the other hand, you might find something interesting on the taxresearch thread, which will stop you feeling bored.

suzied Mon 12-Dec-16 18:56:38

I think they should increase the taxes of those who voted Brexit, to pay for it.

trisher Mon 12-Dec-16 19:05:32

Bet no one would admit to it if there was cost for them. Suddenly we'd all be "Remainers".

Cunco Mon 12-Dec-16 19:10:17

When I voted Leave, I understood that there was an economic downside. I think staying in the EU also has an economic downside, particularly if the Eurozone continues to underperform. Personally, I think the sovereignty issue is more important but I understand that others disagree.

I agree that the fall in the Pound will, if nothing else happens, cause a rise prices. This happens because the price of things we import translate into more pounds. Conversely, the things we export are cheaper in foreign currency, adding a stimulus to exports and helping to counter an increase in foreign tariffs, should that occur. Many economists (although, sadly, not the architects of the Euro) see the value of a floating exchange rate to help an economy to adjust to exogenous shocks.

There is also a question whether downward pressure on real wage rates would be eased by a slower flow of people from the EU looking for work in the UK. The Bank of England cited net migration as one source of downward pressure on real wage rates in recent years. Whether this would reverse in future is possible but not certain, especially if the UK economy turns down. The increasing use of robots rather than labour over the longer term adds additional doubt, in or out of the EU.

I am not the authoritative source requested but there are a few things that might help us muddle through rather than fall off a cliff.

durhamjen Mon 12-Dec-16 19:21:27

As fullfact said, you can't fact check the future.

MaizieD Mon 12-Dec-16 20:24:42

Thanks for redoing the link, dj. I was using my tablet this morning and it doesn't always do what it's told!

Cunco You say There is also a question whether downward pressure on real wage rates would be eased by a slower flow of people from the EU looking for work in the UK.

This Oxford Uni group seems to be saying that the impact is minimal, some 0.5 -0.6%, and downward pressure affects mostly the low paid.

UK studies find that immigration has small impact on average wages but more significant impacts along the wage distribution: low-waged workers lose while medium and high-paid workers gain

The effects of immigration on workers within specific wage ranges or in specific occupations are more significant. The greatest wage effects are found for low-waged workers. Dustmann et al (2013) find that each 1% increase in the share of migrants in the UK-born working age population leads to a 0.6% decline in the wages of the 5% lowest paid workers and to an increase in the wages of higher paid workers. Similarly, another study focusing on wage effects at the occupational level during 1992 and 2006, found that, in the unskilled and semi-skilled service sector, a 1% rise in the share of migrants reduced average wages in that occupation by 0.5% (Nickell and Salaheen 2008).

This is interesting:

The available research further shows that any adverse wage effects of immigration are likely to be greatest for resident workers who are themselves migrants. This is because the skills of new migrants are likely to be closer substitutes for the skills of migrants already employed in the UK than for those of UK-born workers. Manacorda, Manning and Wadsworth (2012) analyse data from 1975-2005 and conclude that the main impact of increased immigration is on the wages of migrants already in the UK.

I do appreciate that since 2005 the EU has been considerably enlarged and that the effect of immigration may be greater but this commentary on more recently published research seems to disagree:

Moreover the estimated impact is partly simply a compositional one – reflecting the fact that migrants earn less, as well as the impact on native wages. Allowing for this, we can calculate that the new paper implies that the impact of migration on the wages of the UK-born in this sector since 2004 has been about 1 percent, over a period of 8 years. With average wages in this sector of about £8 an hour, that amounts to a reduction in annual pay rises of about a penny an hour.

rosesarered Mon 12-Dec-16 20:28:24

As ever, a good post cunco , a whole lot of us who voted to Leave think the same.I doubt that anyone thought it would be all singing and dancing, and that we realised that things may get dearer if there was an economic downturn. However, it will be worth it in the long run IMHO.
You either agree or disagree with wanting to stay with the unwieldy and bureaucratic nightmare that the EU has become, and which, like all empires who extend themselves too far, eventually crumble.

rosesarered Mon 12-Dec-16 20:35:19

leaving the EU was too big a thing to decide on (than the) problem of finding that it affected our income.We will belt tighten if necessary and do whatever is needed.

durhamjen Mon 12-Dec-16 20:44:36

What a shame, roses. More red tape on leaving the EU, not less.

You've been conned again.

Deedaa Mon 12-Dec-16 21:15:57

My feeling has always been that, with luck, life won't change much but it will have cost an awful lot to keep it like that.

rosesarered Mon 12-Dec-16 21:18:42

You do seem to be obsessed with me at the moment djen...... a bit weird really.

granjura Mon 12-Dec-16 21:18:49

Glad some of you were aware that might be a heavy cost and are prepared to take it. I am afraid you are likely to be very much in the minority though. Many who voted are on the breadline and suffering already- and voted as a protest, and also for the NHS - when they realise how much it is hitting them... who knows.

granjura Mon 12-Dec-16 21:20:17

obsessed, wahoo and lol - don't flatter yourself roses. Weird indeed.

Cunco Mon 12-Dec-16 21:20:36

Maisie: I think you are using a sledgehammer to crack a nut. I merely raised a question because, other things equal, I would expect an increase in the supply of labour to reduce its price and the Bank of England study suggested, to a degree, that it has. It concluded that 'the biggest impact of immigration on wages is within the semi/unskilled services occupational group.' I took this to mean 'ordinary people'.

Jen: Indeed, we cannot fact-check the future. The impact of robots has been discussed in all continents, both as threat and opportunity. It is probably both but my guess is that the biggest impact will be at the lower end of the wage scale.

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