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December 21, 2015

New minimum wage will increase migration to UK, claim anti-EU campaigners

Groups campaigning for the UK to leave the EU have claimed the forthcoming increase in the country’s minimum wage will prompt a boom of immigration.

The Vote Leave and Conservatives for Britain campaigns, which are advocating a “no” vote in the future referendum on the UK’s membership of the EU, argue that the hike to the minimum wage due to come into effect next year will mean prime minister David Cameron's aim to ban recent EU migrants from claiming benefits will have no effect on migration.

MP Steve Baker, co-chair of Conservatives for Britain, commented that: “Even if the prime minister secures a deal on migrant benefits, this wouldn’t have even the slightest impact on immigration flows. The living wage will make any tax credit cuts irrelevant […] This whole farce makes clear that the renegotiation has become focused on a trivial issue that is fatally undermined by the facts on the ground. The only way to take back control is to vote leave.”

The UK’s minimum wage for over-25s is set to increase to £7.20 an hour in 2016 and over £9 by 2020, a policy branded the national living wage.

The British government has committed to holding a referendum on the UK’s continued membership of the EU by 2017. Recent reports have suggested it could take place as early as summer 2016.

Corrado Giulietti has written for IZA World of Labor about whether minimum wages induce immigration. He writes that there is mixed evidence of whether minimum wages attract or deter migrants, and argues that: "When introducing or raising the minimum wage, policymakers should consider the potential effects of the policy on the migration choices of individuals living abroad. Furthermore, minimum wage and immigration policies should be coordinated if central and local governments wish to control the effects of the minimum wage beyond local borders."

Related articles:
Do minimum wages induce immigration? by Corrado Giulietti
Who benefits from the minimum wage—natives or migrants? by Madeline Zavodny