It's incredibly sad, in my view, that the people who will suffer the most from Brexit are the ones who were hoodwinked into voting for it by people such as Boris Johnson and Michael Gove. Patronising or not, it's a hard fact that the British public have incredibly false beliefs (all reflecting negatively on the EU, of course) about the EU, on top of the already existing fact that
people consistently over-estimate the number of immigrants in the country, the amount of benefits fraud, and the amount we spend on foreign aid.
Already, we've seen their promises evaporate into thin air: immigration is not going to come down significantly (indeed Gove and Johnson, as advocates of the free-market, are pro-immigration as they've repeatedly said); and there won't be any more money for public services. Rather, we'll see economic growth slow (there probably won't be a recession, but we will see significant costs), and that means less revenue for public services and less income for low-skilled and uneducated natives who overwhelmingly voted to leave.
Nonetheless, the Brexit vote was a clear sign that something is very wrong in this country: stagnant wages, insecure jobs and a health service under strain. As the King's Fund has said, the NHS is in its most austere period in history.
The strains on public services and the lack of investment in infrastructure and housing all stems from this government's ideological - and economically illiterate - decision to adopt an austerity agenda.
Now's the time for Labour to unite behind their leader and drive home an anti-austerity economic agenda which will resonate with disaffected voters who will - invariably - be disappointed by the effects of Brexit and the lies from the Leave campaign.
With the IMF and the OECD
having called
for the British government to take advantage of record low interest rates, and invest in long-term infrastructure projects, now's the time to grow the economy, get incomes rising and create thousands of jobs for British workers. (It's ironic that Cameron and Osborne, who continually cited the IMF and the OECD, ignore their advice on this.)
On immigration, there's no point in trying to speak the facts: people just won't listen. Immigration only has a slightly negative impact on the employment of low-skilled natives (counterbalanced by the creation of more jobs for medium to high-skilled natives), and only has a
negligible to small negative impact on the wages of low-skilled natives (with a positive impact on the wages of medium to high-skilled natives, making it slightly positive overall). Studies differ, but as Jonathan Portes said, commenting on the most pessimistic study from two Bank of England economists, which stated that a 10% rise in immigration leads to a 2% drop in wages for some low-skilled natives:
Yes, immigration
raises GDP per capita. But people won't listen.
As a result, talk from Labour figures of instead using the net contribution that immigrants make to the public finances - as well as money from elsewhere - to help communities most affected by migration is welcome. EU migrants, on the margin, contributed £28.7 billion more to the public purse than they took; non-EU migrants made a net contribution of £20.5 billion. (See
table 6). They should also be talking about a surtax on immigration: don't restrict immigration, tax it.
We could learn some lessons from a particularly well done
2013 study by Peri and Foged, who tracked the wages and employment of every individual worker in Denmark from 1991-2008, and tracked how they responded to large influxes of refugees from places like Somalia, Afghanistan and Bosnia.
This is a particularly robust study because the Danish government randomly distributed these refugees to counties in Denmark, giving the researchers a great data-set to work with. They found that average wages, native low-skilled wages and low-skilled native employment all increased, along with occupational mobility. So, let's try to spread immigration more uniformly around Britain.
This issue is not going to go away: immigration will still be too high in the eyes of many, and the most prominent leave campaigners are all pro-immigration and were personally, I suspect, pro-freedom-of-movement. They're advocates of the free-market, after all.
These kinds of keyhole solutions are better for everyone: both for low-skilled and uneducated natives who are rightly angry at their economic situation, and for immigrants, who should be free to seek a better life for themselves and their families. It's what we would do in their situations, after all.