Research carried out by the Resolution Foundation think tank found that while workers in sectors such as security and cleaning would experience small pay increases in the event of significantly reduced immigration, this would be more than offset by damage to the UK's economy, which in turn would affect the wages of many other workers.
"While it is wrong to say that migration had no effect in reducing earnings, specifically for those in low-paying occupations, the effects are small and reducing migration will not reverse the earnings squeeze," the report said.
Lower migration may reduce the drag on wages for some occupations — but the impact of Brexit pay sqeeze far greater pic.twitter.com/RjoUyL1UtW
— ResolutionFoundation (@resfoundation) August 16, 2016
The report warned that trying to meet government targets of reducing net migration from 200,000 to the tens of thousands will "throw up a number of significant new challenges for the labour market."
"In the short-term the government will need to ensure that the right to work of existing migrants is guaranteed to avoid serious harm being done to some sectors heavily reliant on such labour. In the medium-term its much heralded new industrial strategy will need to focus on helping these industries adjust to lower migrant availability, for example by investing in labour saving technology."
#Brexit to Lower #UK Real #Incomes by 2% by 2018, according to the Resolution Foundation
— Renesource Capital (@Renesource) August 16, 2016
"Finally, with a likely rise in temporary workers and a greater risk of illegal migration the government will need to rethink the UK's current light touch approach to labour market enforcement."
Some Sectors to Be 'Severely Damaged'
Researchers warned that many UK companies that rely on foreign workers are likely to face serious problems in the event of significantly reduced migration, while particularly industries with a high migrant workforce, such as food and clothing manufacturing would suffer "severe damage."
Report from Resolution Foundation confirms that Brexit has damaged the economy. Any chance of an apology from Brexit leaders? We told you so
— david bush (@Davidbush) August 15, 2016
"Going forward, recruitment is likely to be a challenge for these sectors. Given the fact that migrants in these sectors earn a lot less than average native wages, it is unlikely that these sectors will be able to substitute migrant for native labour without rethinking their business models," the report added.
The report contradicts the claims made by Leave campaigners during the EU referendum, with Euroskeptics arguing that the UK could benefit from being able to control and reduce immigration.
Why did we vote to leave? What an analysis of place can tell us about Brexit — Resolution Foundation https://t.co/d4vINf9KNA
— Louise Ankers (@LouiseAnkersLD) July 16, 2016
There are still many questions surrounding Britain's post-Brexit economy, with the government not yet outlining what course of action it would like to take in terms of its relations with the EU.
This has led to concerns the UK could be locked out of the European single market, which many business and economic experts say would be disastrous for Britain.
