A hard Brexit which would be tough on immigration is likely to boost wages in the United Kingdom but only temporarily before economic setback leads to lower wages across industries according to the research by the Resolution Foundation. The research analyzes the impact of migration on employment from 2004 to 2014. During this period, the share of the migrants in the population of the UK increased from 10 percent to 16 percent. The supply of low-skilled workers from EU accession countries such as Poland and Latvia had helped drive down the wages. Their average earnings are £2.76 per hour below that of natives.

So if migration is halted as a result of the Brexit vote, some sectors of the economy such as food manufacturing and clothing could see a rapid wage increases for the Britons. Almost one in three workers in these sectors is a migrant. Even sectors like health care, cleaners are likely to see increases in wages. However, these wage benefits are likely to dissipate over time as such an exit and tough stance towards migration would face retaliation from the EU and Britain is likely to fall to a much deeper recession and prolonged wage stagnation. Prolonged wage stagnation in other sectors of the economy would eventually lead to a much lower demand in these sectors and reduce wages.