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’.
Today's jobs stats: worker shortages and record vacancies are driving tightest labour market in modern times.
This has been a jobs light recovery – we need action to get more people the help they need to work: older people, those with health conditions, parents, students.
— Tony Wilson (@tonywilsonIES) October 12, 2021