Driving down wages: Polish workers hunt for work in the UK 
Wage warning: Professor David Blanchflower says EU expansion has driven down average pay rises for UK workers
Posted on 10/27/2007 11:42:51 AM PDT by BGHater
The arrival of immigrants from Eastern Europe has forced down the wages of British workers, a Bank of England expert says.
Professor David Blanchflower said the average pay rise given to a UK worker had reduced significantly as a direct result of EU expansion.
Workers have an increased 'fear' of unemployment - which allows bosses to drive a harder bargain.
Professor Blanchflower is a member of the Bank's Monetary Policy Committee.
His findings provide the first proof that the arrival of 700,000 Eastern Europeans has left the average worker worse-off.
In 2004, prior to the influx of workers from Poland and other countries, an employee earning £30,000 would have received a pay rise of £1,260.
But a rise given to a worker on the same salary in the middle of this year, would be only £1,050 - a reduction of £210.
The more you earn, the more you would lose out.
Professor Blanchflower said the arrival of Eastern Europeans had 'increased the fear of unemployment'.
This, he said, 'tends to have a downward impact on pay, especially in the non-union sector'.
Fear of unemployment is measured by asking the public how they expect the number of unemployed to change over the next 12 months.
A balance is worked out between those giving positive and negative replies.
Across the EU, the 'fear' of unemployment has fallen since 2003/4.
This is consistent with most of the other EU countries putting restrictions on the right of Eastern Europeans to work, the professor said.
But, in Britain, which allowed free access to the jobs market, it has increased.
Workers fear they could be replaced by a migrant. As a result wage growth, excluding bonuses, has fallen from 4.2 per cent in 2004 to 3.9 per cent in 2005, 3.8 per cent in 2006 and 3.5 per cent in the second quarter of 2007.
In June, the Retail Price Index inflation measure, which includes mortgage payments and is used in pay bargaining, was 4.3 per cent.
Workers receiving a pay-rise below this rate, as the average employee did, can claim to have suffered a real-terms pay cut.
The same has happened in Ireland, which also opted against restrictions on Eastern Europeans.
There, average weekly earnings growth has fallen from 5 per cent in 2004 to 3.1 per cent in 2006.
Professor Blanchflower said: 'Given the strong growth rates of both economies, many economists have struggled to find an explanation for this apparent weakness.
'I believe a rise in the fear of unemployment is the only realistic candidate explanation.'
However, there are benefits, he added, such as helping to keep inflation low.
Earlier this week, it emerged that one in every eight workers is born outside this country.
The Office for National Statistics produced the breakdown from the Government's Labour Force Survey which questions about 20,000 a month.
It showed that in 1997 there were 1,904,000 employees born abroad, fewer than one in 13 of the country's workforce.
By 2007 the number born abroad had risen by more than 70 per cent, to 3,269,000.
The number in work has risen since 1997 from 25.5 million to 27.2 million.
But only 310,000 new jobs have gone to workers born in Britain - fewer than one in five of the jobs created by a continuously expanding economy.
The number of British-born workers has actually fallen over the past four years, from a peak of 24.5million in 2003 to 23.9million, the figures showed.
Professor Blanchflower is a professor of economics at Dartmouth College in the U.S. and a Research Associate at the National Bureau of Economic Research.
Driving down wages: Polish workers hunt for work in the UK Wage warning: Professor David Blanchflower says EU expansion has driven down average pay rises for UK workers
Change some of the nouns - UK, Eastern Europe, etc. - and this could refer to the US and the influx from south of our border.
What the UK really needs are more third world migrants, 'cause with them its all blue sky.
Precisely. The UK needs many more Muslims, Africans, and Caribbeans. These Poles are just too darned white, and besides they are lousy at cricket.
At your age you should know that white Christians are absolutely useless at boosting your Official Diversity Score, as well.
“The arrival of immigrants from Eastern Europe has forced down the wages”.
Why do ya think big business and Bush want illegal mexicans and such?
To keep wages low.
It sure as hell isn’t to help raise up the lifestyle of the illegal.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.