#Brexit and the Economy: Effect on the US Job Market

 

Little over a week ago, Britain voted to leave the European Union.  The British Exit, or Brexit, as it has come to be known, is already having an impact on Britain’s economy and the effects are being felt around the world.  Of course, we watched as the stock market reacted to the news with a big sell-off and a flight to security here in the US, but one of the less-obvious, immediate ramifications that is evident on the UK side, is in the British job market—and the search for jobs outside the UK.  In fact, just since the Brexit vote, UK job search into the US has increased as much as 170%.

 

Indeed.com has collected the following information on UK-based job search to other countries by volume after Brexit (sources: SilkRoad & iCIMS):

1. US – 29.4% of outbound search
2. Canada – 12.7%
3. Ireland – 9.1%
4. Australia – 6.2%
5. United Arab Emirates – 6.1%
6. France – 5%
7. 

 

To go a bit deeper into this developing trend, I was able to interview Tara Sinclair, chief economist at Indeed.com, to get some insight from an industry expert:

 

Q: You are quoted as saying: “But the Brexit vote, at least in the short term, caused the share of UK job search into the US to increase as much as 170%, a potential trend as more UK and EU citizens look for opportunities elsewhere.”  What do you think is the driving force behind this short-term trend? 

A: What we’re hearing from job seekers is that after the Brexit referendum they developed increasing concerns about the opportunities in the UK labor market.  The concerns are both in terms of job opportunities going forward for foreign citizens as well as the health of the UK economy overall and how that may impact future jobs. 

 

Q: What factors specifically contribute to UK and EU citizens looking in the US?

A: The US, even before the Brexit vote, was the top destination for UK residents outside the UK and is also highly desirable globally.  The health of the US labor market with lots of job openings today along with competitive salaries makes the US a perennial favorite for people searching for international job moves.

 

Q: What impact do you anticipate this having on the US job market—which is already fragile—i.e., fewer jobs and lower labor participation rate for US citizens?

A: Given the strict restrictions on work visas in the US, this will likely have little consequence in terms of the number of international workers who come into the US labor market, but with increased competition for those visas we may see US companies benefiting from higher quality international talent.

 

Q: Not getting into the politics of it, but how do you anticipate the presidential election in November affecting this trend?  Which policies of Trump/Clinton would impact this the most?

A: We’re carefully watching the jobs data in the US as we head up to the election, but we haven’t seen any big movements so far.  One lesson from the Brexit vote is that we may not see an impact until after the election, but that job seekers do respond to changes in opportunity.

 

Q: You are also quoted as saying: “Separately, an exodus of EU citizens from the UK may provide an opportunity for US job seekers to find roles there.”  What potential opportunities would this open up for US workers in Britain?

A: If the negotiations over Brexit result in more restrictions for EU citizens wishing to work in the UK, this could put US citizens interested in working in the UK on a more level playing field with EU workers and may allow more US citizens the opportunity to work in Britain.

 

So what does it all mean?

We saw stocks plummet after the announcement of the #Brexit vote and a flight to gold and other “safe” investments, but then quickly rebound.  While UK workers may feel uncertain as to what the direction of their economy will be without being part of the EU, the spike in job search numbers may be somewhat of a knee-jerk reaction.

 

*Indeed.com, the #1 job site in the world, allows jobseekers to search millions of jobs on the web or mobile in over 60 countries and 28 languages. More than 180 million people each month search for jobs, post resumes, and research companies on Indeed.  More people find jobs on Indeed than anywhere else. Indeed is the #1 source of external hires for thousands of companies.