Young people will benefit most from tougher controls on migration, thanks to Brexit

22 Aug 2016

@GeorgePaterson

 

Most don’t realise it, many will never accept it, but the EU referendum result on 23rd June was the best thing that could happen to young people in Britain today.

 

We are still experiencing the aftershocks of a Leave vote that took many Remain voters – especially the young and metropolitan – by shock. A significant segment still cling on to the belief that either the result won’t be implemented or that a second referendum will be agreed to overturn the result.

 

The unpopular truth is that a tougher immigration system, which Brexit will inevitably create, will ultimately benefit young people the most. Britain now has an opportunity to implement a rigorous but fair immigration system, without the obligatory constraints from EU freedom of movement rules. This will make population growth sustainable whilst ensuring we still bring in migrants with the most sought-after skills.  

 

Immigration is key to our society today. Those coming to work here can be colleagues, classmates, friends, housemates, and even spouses. However, they are always competition. Competition for jobs, for houses, for school places, for public services as a whole. To some extent this competition is good for efficiency, but with net migration levels at 333,000 a year, this competition has a downward effect on living standards, particularly for those who are young.

 

Wages have stagnated over the last five years, particularly for the young, who face intense competition from migrants who originate from poorer countries. In some cases the minimum wage in other European countries is eight times less than the UK rate. Employers are not incentivised to improve working conditions and pay when they can procure visa-free labour from countries with even lower pay and employment standards. It impacts those at every pay scale; entry level jobs are harder to secure, with young people from every EU country able to apply to the same role on the same basis as a British citizen. And who can blame them? In countries like Greece, youth unemployment is almost 50%.

 

Lower migration will bring two key benefits for young people seeking work today. With a smaller labour pool, employers will have to offer better terms and wages to prospective employees. If freedom of movement is abolished this will compel employers to look primarily at home for candidates, sponsoring visas only where employing a foreign worker is essential. Additionally, without the guarantee of attracting speciality skills from abroad, employers will be motivated to invest in apprenticeships, graduate schemes and in-house training.

 

Lower migration will also help young people get on the housing ladder. As it currently stands, high levels of migration help keep wages from rising, while also pushing up the price of renting and buying. Since 2003, just before EU freedom of movement was extended to Eastern European countries, the average house price has risen by 60%, whilst wages have been declining in real terms of 2% each year since 2010.

 

In turn, this is pricing young people out of the housing market and forcing them to rent. The proportion of young people renting has risen dramatically, and by 2025 it is forecast that a clear majority of those aged 20-39 will be renting. Not all of these renters are doing so out of choice. The problem with renting is that young people today will have nothing to show for their toils when they reach their middle age, unlike a mortgage which provides an asset – in the form of property - when fully repaid.

 

By lowering the rate of migration we can reduce demand for housing, and therefore reduce prohibitive prices. A lower rate of population increase will allow housebuilders to catch-up with the already overstrained market, which in turn will give young people greater opportunity to get on the ladder.  At worst, house prices and rents may grow at a slower pace, and this offers hope that wages will be able to catch up. But only after Brexit, when the migration system can be reformed.

 

In addition to all this, lower levels of migration will also mean lower pressures on public services and school places. The number of European children requiring a school place in Britain has doubled since 2007, making it harder for young British parents to find a suitable school for their children. A tougher, reformed system will enable us to build new institutions to meet demand and, as with housing, ensure demand doesn’t outstrip supply.

 

Young people shouldn’t be scared that a more rigorous migration system will penalise their opportunities to travel, study and work abroad. A stricter migration system will not prevent young people from travelling or working abroad. After all, a vast number of young people, including myself, have worked in countries outside Europe simply by getting a visa. More importantly, leaving the EU will not impede leisure travel.

 

The supporters of migration have always been large businesses who benefit from the lower wage growth, and find it easier and cheaper to hire skilled workers from abroad, rather than investing in training and home-grown talent. However, these same businesses do not burden the cost of housing these new arrivals and the cost of providing infrastructure and public services to cope with an increasing population. In the future it should be the responsibility of business to invest in home-grown talent, rather than increasing the country’s dependency on foreign labour and ignoring the knock-on impact on housing and services.

Lower levels of migration will mean better living conditions for young people in Britain today. If reform of the system is executed properly, it will mean higher wages for young workers, better investment in skills and training by employers, and better working conditions and perks. It will mean less demand for housing – making it easier to get on the housing ladder and negotiate fairer tenancy agreements. It will also mean lower pressure on public services and school places. It means sustainability.

 

Taking a such a strong stance on immigration may be controversial, but advocates for a tougher system should be bold – it will be extremely beneficial to working people. Especially the young.

 

 

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