“The tightest labour market in modern times”

This Twitter thread (below) is really worth a careful read for everyone who wants to understand the current state of the labour market.

Firstly, the fears about mass redundancies at the end of furlough are just not materialising – if anything redundancies are below pre-pandemic levels.

In summary, there’s a strong recovery going on, but it is being hampered by employers not being able to hire the workers that they need because there is a ‘missing million’ from the workforce.

The missing million comes from a combination of migration (Brexit and covid-related absences – people who went home to look after the family and never returned), and ‘economic inactivity’ from people who aren’t formally out of the labour market through retirement and/or an inability to work for whatever reasons. This is particularly notable among older women, men in their 50s, and young men (especially students). There’s also a worrying increase in long-term ill-health.

Tony’s conclusions are that this isn’t going to be resolved by ‘paying more’ – that the real problem facing the economy is persuading people who are currently economically inactive to change that – and that will need a ‘Plan for Jobs’.

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1 Response to “The tightest labour market in modern times”

  1. Pingback: Got a pay claim coming up? Want advice on inflation, and stuff like that? | Bectu Freelance Research

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