Deciphering labor market data messages is a full-time job in itself, but the latest release from the Office for National Statistics (ONS) is unlikely to compel anyone to get to work this morning.
Unemployment remains close to a The lowest in 50 years of 3.8%. Expect to hear this mentioned frequently by ministers – a rationale for the furlough scheme which has supported livelihoods through 18 months of COVID lockdowns.
But unemployment only tells part of the story. The number of vacancies is just as high, with a record 1.3 million unfilled jobs.
The combination of fewer people out of work but actively seeking jobs and companies struggling to fill jobs is what economists mean when they talk about a ‘tight’ or ‘hot’ job market. “.
On the ground, that’s why sectors ranging from agriculture to tourism and travel are complaining of labor shortages, exacerbated by the impact of Brexit.
BT Openreach is the latest major company to complain that the inability to recruit European workers easily is slowing operations – in its case, the pace of super-fast broadband rollout.
Whether it’s picking fruit, working security, lugging luggage or digging holes, repetitive, unskilled roles at minimum wage aren’t as easy to fill as they used to be.
In theory, the tight market should empower potential employees able to demand better terms and higher wages, and there are signs that this is happening.
Companies say they have to lure payroll workers with bonuses and perks because there is a shortage of job candidates.
According to the ONS, remuneration is up, on average by 6.8% including bonus and 4.2% without.
But the impact of inflation is impossible to avoid, so in real terms wages actually fell 4.5% in April.
This is the largest decline since records began in January 2001.
Firms unable to fill jobs to boost growth and productivity, and worker compensation eroded by inflation, is an unusual and corrosive combination, which may explain another key feature of labor data, the near half a million people considered “economically inactive”.
This category broadly includes those who are unwilling or unable to work; the sick, students and retirees, more than half of whom are over 50 years old. ignored the home and historically the role of women.)
This trend has been called the “great resignation,” a post-COVID reset by middle-aged people who have decided that work is no longer central to their goals and ambition.
This group is difficult to quantify, and the impact of long Covid and other illnesses may be just as significant in driving the over-50s out of the workforce.
But an economy desperate for growth is unlikely to do so without them.