It's funny to think that Brexit might kill Pret à Manger

Pret à Manger HR chief Andrea Wareham told the House of Lords last week that only “one in 50 people that apply to our company to work is British.” The rest are immigrants.

About 65% of Pret employees are non-British EU nationals, she told the Economic Affairs Committee, and the company relies on them to stay in business.

Pret is a classic British success story. It was started in 1986 by two law students who quit their post-graduation day jobs because they were disgusted by the terrible cafes serving lunch near their offices. Now they employ 10,000 people at 350 shops all over the world, and do £700 million in sales per year.

“We do pay well above the national living wage,” Wareham said. Pret employees start at £7.50 per hour (about $US9) plus a £1 per hour bonus, and can expect to make £16,000 per year, at entry level, she testified. Those who stay with the company can expect to advance into management, where base pay is about £33,000 per year and runs up to £45,000 with bonuses, she said.

Pret warehamParliament TVPret’s Andrea Wareham: 65% of Pret workers are from the EU.

That’s not enough to tempt British workers, however. So Pret relies heavily on immigrants from Europe and farther afield.

Pret might fade into history after 2019, when Article 50 expires and Britain leaves the EU. The EU shows no sign of offering Britain any access to the Single Market after Brexit. And that means Pret — and any other UK company — will lose the right to employ EU nationals. That will affect 65% of Pret’s staff.

As a Question Time audience member said earlier in the month, without EU immigrants, “who would be serving us our coffee in Pret? Who would be serving us our sandwiches?”

That poor woman was lampooned mercilessly on Twitter the next day (sample response: “middle-class angst at it’s most focaccia“). But she’s technically right: This is an existential question for Pret. Brexit might prevent EU workers from coming to Britain. Where is Pret supposed to find 65% of its staff after 2019?

Pret will face a choice: Drastically increase wages in order to attract British workers (and increase the price of its sandwiches to pay for them). Or shut down branches if it can’t find enough workers to stay open.

Perhaps Pret should pay more than £7.50 per hour. Britain has full employment. We are in one of those rare periods where employers are forced to compete on price for new workers. Why shouldn’t these fast-food companies pay decent wages? It might mean the price of a cheese sandwich goes up. It might mean that Pret closes a few shops, shrinks its business, and employs fewer people overall. But so be it.

Killing Pret is a small price to pay for Brexit.

OK, so this “World Without Pret” meme is a bit of a stretch. (Although I suspect there are people inside the HR department at Pret right now who do genuinely regard Brexit as a potential catastrophe for the chain’s business model.)

So let’s look at a Brexit staffing issue that’s a bit more significant: the NHS.

Roughly 40% of NHS doctors are immigrants:

And it has been that way for a long time (data from 2007):

Some data show the percentage is lower. This survey from 2014 found that “only” 26% of NHS doctors are foreign.

Pret and the NHS have this in common. They both need immigrants to survive. Pret is like a canary in the coalmine for the NHS. Pret’s problems today are the NHS’s tomorrow.

If you are one of those people who thinks the NHS is currently in “crisis” due to underfunding, imagine it after 2019 when at least one-quarter of all doctors in the UK start to disappear.

Not all of those foreign doctors are from the EU. Plenty are from non-EU countries. So perhaps one effect of Brexit will be an increase in the number of non-European immigrants we’ll need to keep the NHS going. Or maybe we can just have a smaller NHS.

That’s what the Leavers want, right?

Alternatively, perhaps UK taxpayers should do what Pret will be forced to do: Pay wages high enough to make British people want to become doctors. Doubtless that would be a good thing too. Doctors save lives. They should be well-paid.

So, how much more are you willing to pay to prevent the NHS from cutting 40% of its doctors?

When Article 50 is triggered later this month it will affect us all, from the baristas at Pret to the heart surgeons in your local A&E. As this recent chart from the Office for Budget Responsibility shows (below), if we want high employment in Britain, we will need high immigration. More workers create more jobs for more workers, basically. The chart shows different projected employment rates for different economic scenarios.

The best scenario would be a labour force with high immigration and younger-age workers:

The chart comes from the OBR’s review of Chancellor Philip Hammond’s spring budget, also from last week. It is one of the economic forecasts on which Hammond’s budget is based. It’s interesting that the Conservative government is aware that high immigration is necessary to maintain a strong economy, even if they’re not singing too loudly about it. George Osborne’s budgets were based on the same assumption. So there is a glimmer of hope that all these promises about the UK controlling its borders and reducing immigration to the tens of thousands will turn out to be lies. Because we’re going to need as many immigrants as we can get our hands on — to grow the economy, to staff the NHS, and, yes, to serve coffee at Pret.

It would be a shame if Brexit killed off Pret. It would be worse if it damaged the NHS.

This is an opinion column. The thoughts expressed are those of the author.

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