OXFORD, England (Reuters) - Britain's new, post-Brexit immigration system is unlikely to lead to a significant increase in pay growth for workers in the country, Bank of England Chief Economist Andy Haldane said on Friday.
Under the plans of Prime Minister Boris Johnson's government, people from European Union countries will no longer have the automatic right to work in Britain, raising concerns about shortages of staff among many employers.
"Let’s see how that plays through," Haldane said after a speech about the labour market at the University of Oxford when asked about the impact of the new system on wages.
"Perhaps too much emphasis has been placed on how big a dampening (effect) immigration has had on real pay in the first place."
While pay in some sectors had been affected more by immigration, overall the impact was "pretty modest," he said.
In his speech, Haldane said the rise of "flexible" work, where workers are often unable to choose their hours and their pay fluctuates accordingly, appeared to be contributing to Britain's deep-seated productivity problem.
While Britain now had the lowest jobless rate in nearly half a century, the problem of high unemployment of the early 1980s had been replaced by one of weak wage growth.
Flexible working, including so-called zero-hour jobs, helped many people, including women and older workers, but many more worried about the insecurity of such work, Haldane said.
Figures from the Trade Union Congress showed almost 4 million people were in insecure work, or one in 9 workers, close to the scale of the unemployment peak in 1980s, he said, adding that the link between the poor quality of work and weak productivity was most evident among lower earners.
"Perhaps this rise of alternative working, insecure arrangements may have contributed at least in part to that flat-lining of productivity," Haldane said.
He declined to answer a question about the economic impact of the spread of coronavirus.