British nationals could expect a slight increase in their wages (0.2% – 0.6%) following the Brexit vote, but the downturn in the UK’s economy could also mean a 2% decrease in the average wage, according to a report from the Resolution Foundation.
Resolution Foundation policy analyst Stephen Clarke told FoodManufacture.co.uk: “39.7% of workers in food manufacturing are migrants, 25% are from the EU accession countries.
“The sector may struggle to recruit if there is a significant reduction in workers from the EU permitted to come to the UK.”
The report said that simply replacing EU workers with British-born workers would not solve the problem, given that European workers earn around £3 on average less than British workers.
“While reducing migration may not have a huge impact on the pay and job prospects of British-born workers, it will create major challenges for many British-based firms.
“The government must use its new industrial strategy to support these firms, such as food and clothing manufacturers, who have hitherto relied heavily on migrant workers. These firms will need to invest in skills and new technology if they’re to stay afloat.”
Replace the jobs
The government must guarantee the rights of existing EU employees to continue working in the UK in the short-term, said the Foundation. Food manufacturers should then invest in skills and labour-saving technology to replace the jobs that would be no longer filled.
The Resolution Foundation’s report came after the manufacturers’ organisation, EEF, found the challenges of Brexit would be at their most severe over the next six months to a year. The UK could expect to remain in recession until at least the end of 2017, said the EEF.
Resolution Foundation report on Brexit challenges – at a glance
- Food manufacturers face “particularly challenging” time
- Companies would struggle to replace European workforce
- British staff wages down