There has been a lot of debate prior to and since the Brexit vote around whether or not the EU's insistence on maintaining the right to free movement is a help or a hindrance to the further development of the EU. Farage and others blame free movement for forcing down wages though survey after survey show that it actually has negligible impact [Prime Economics - EU membership impact on wages]. Though it doesn't force wages down I believe it helps to restrain wage rises beyond what the market can bear and actually has the effect of pushing wages up on average throughout the EU, and is therefore a good thing.
So, how can Farage have got this so wrong? The reason is that he is focusing only on the local effects in the wealthier countries that have been the recipients of large number of Eastern European migrants and then putting the cart before the horse. If you take the EU as a whole, free movement ensures that the working population in each country is not geographically constrained. Being constrained in such a way would make the workforce exploitable by corporations/employers playing off one country against another in order to force down wages, or working conditions, or environmental protections, etc. The EU has a common set of laws in place to prevent these practices that would otherwise occur in the pursuit of the maximum return on capital. The fact that the workforce can relocate means that firms competing for labour in the countries vacated by economic migrants have to put wages up to retain the best staff - the ones that have a choice about where they work. This has the effect of raising the spending power of those citizens that stay-put and is a catalyst towards the re-balancing of the economies of the EU and standards of living across the EU. Firms will initially invest in those countries because they are cheap, and wages will rise to keep the best staff in those countries. This is a good thing - it means that on average free movement pushes wages up amongst skilled workers across the EU.
But how about in the countries that are the destinations of economic migrants - surely an influx of job-seekers will lead to more competition for jobs and therefore force down wages? As the referenced surveys have shown, this is not the case. Intuitively it is apparent that the vast majority of migrants relocate in order to find work so will target those economies that are growing, creating jobs and already have skills shortages. They are unlikely to target regions that have high unemployment or under-performing economies - to do so would just not make any sense. In migrating to countries that already have skill shortages they will certainly have the effect of constraining the growth of wages beyond a level that is competitive, which would normally be the consequence of a shortage of labour, but again this is a good thing as it holds down inflation and keeps the economies of the EU competitive. The idea that freedom of movement of people forces down wages simply does not fly - they would have to migrate to destinations that already have a surplus of labour and no minimum wage if they were to have the effect of reducing wages.
How about the fruit and veg pickers of East Anglia? Despite these workers not falling into the 'skilled workers' categorisation, the same analysis applies. Farmers consistently tell us that they hire migrant labour because they cannot get locals to do the work ie. the jobs already exist and the farmers are facing the same shortages in filling them. The wages they are offering must already be competitive across the EU as a whole, even if they are low, otherwise people wouldn't travel from the EU to the UK to fill them. Hence the wages for fruit pickers in East Anglia are already amongst the highest rates for the job in the EU. Preventing free movement will mean that farmers have to raise those already (relatively) high wages and will therefore become less competitive. Once we are outside the EU those farmers are going to have to put up wages to attract local workers and will require significant subsidies or else tariffs on fruit and veg imports from the EU if they are to remain in business. Or we continue to allow migration to fill these vacancies; ipso facto, Farage has sold the public a con - again.
Interesting refs:
Prime Economics - EU membership impact on wages
NIESR - Impact of immigration
Economics Help - The 'lump of labour' fallacy
Impact of EU migration
EU migration — the effects on UK jobs and wages