Brexit's Potential Impact on UK's Labour Market, Trade, and Minimum Wage

Running head: ECONOMICS ASSIGNMENT
Economics assignment
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ECONOMICS ASSIGNMENT
Table of Contents
Introduction................................................................................................................................2
The potential impact of Brexit on migration and UK’s labour market......................................2
The potential impact of Brexit on trade and UK’s goods market..............................................5
UK’s unemployment and minimum wage.................................................................................7
Conclusion..................................................................................................................................9
Reference list............................................................................................................................11

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ECONOMICS ASSIGNMENT
Introduction
One of the main problem which the economy of the United Kingdom faces at the
present time is the weak economic growth where the output is much below the trend rate of
growth. The economy of the United Kingdom is highly developed in nature and is also
market oriented. It is also one of the fifth largest economy in the world which is usually
measured by the gross domestic product. In the year 1990, the economy of Britain fell in to
the global recession. Although United Kingdom can be stated as one of the strongest
economies in terms of inflation, interest rates and unemployment. The productivity of the
United Kingdom went down to 20 per cent below the pre financial crisis trend. Britain have
also known to be less productive in nature than the other developed economies including the
United States and France (Lavery, Quaglia and Dannreuther 2018). It have been said that the
growth of data and the artificial intelligence will be acting as a challenge for the economy.
The Brexit took place in June 23, 2016, where the United Kingdom voted to leave the
European Union. Brexit is used for the term of “British Exit” from the European Union. One
of the biggest disadvantage of Brexit is that, it had slowed the economic growth of the United
Kingdom. It had slowed down the economic growth to 1.3 percent in the year 2018. The
British pound also went down to 14 percent lower than before the referendum which will rise
the price of imports. Therefore, Brexit have been disastrous for the city.
The potential impact of Brexit on migration and UK’s labour market
In terms of the labour market, immigration is referred to the inflow of the workers
which is distributed across the education and the level of experience. In the last two decades,
UK have experienced a steady flow of migrants in the economy. The immigration had a huge
impact on the population, wages, tax revenue and productivity of the United Kingdom. Post
Brexit the growth of population have decreased (Winkel and Derks 2016). The growth of

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ECONOMICS ASSIGNMENT
population have slowed down to the lowest rate which fell down to 12 percent after the
referendum. The latest migration figures of the United States have shown a dip in net
migration.
The impacts of immigration in the economy of the United Kingdom:
Rise in the labour force: There is a presence of difference in hard Brexit and soft
Brexit. Hard Brexit refers taking the United Kingdom completely out of the European Union
which comprises of customs union and the single market. In case of soft Brexit, the United
Kingdom will remain closely aligned with the European Union. The UK in this case have
gained a special access to the single market. The soft Brexit usually aims to minimise the
impact on business and trade by staying in the customs union. The hard Brexit can result to
more economic damage to both the United Kingdom and the European Union. Economists
have found out that immigrants usually pay more taxes than they take as benefits (Dhingra,
Machin and Overman 2017). There is also a positive impact on the dependency ration of the
population. With an ageing population, there will be increase in the dependency ratio. The
rise in immigration also help in reducing the dependency ratio. The citizens of the European
Union affected the labour market of the United Kingdom in various ways through the free
movement of labour along with the contribution of immigration to the gross domestic
product.