In the News

Labour Market - UK Job Vacancies Reach New High of 1.2 million

Graham Watson

14th December 2021

Have we reached full employment? What even is full employment?

The number of job vacancies has reached 1.22 million, unemployment is 4.3% in the three months to October, and close to the 4% reached pre-pandemic, so where are the remaining workers.

Interestingly, it might be that unemployment has fallen because the number of people active in the labour market has fallen, with many migrant workers returning home.

"Much of the recent growth in employment has been among part-timers, who were particularly hard hit at the start of the pandemic."

However, it seems that the UK labour market is tight and that there are going to be ongoing labour shortages across the economy which may have inflationary implications.

The surge in covid infections might well bring a halt to the recovery in output and jobs. This is just a snapshot of business sentiment, but accountancy firm Moore UK is expecting a considerable number of firms to start making employees redundant, and also expects price rises in the New Year. However, something to keep an eye on.

And whilst wages are rising in response to labour shortages in many occupations, research by the New Economics Foundation finds that half of UK families are actually £110 worse off since 2019. In many senses, that's not all that surprising given coronavirus, but after accounting for inflation, many people are worse off, and income inequality has widened.

As I stated at the time 'levelling up' is a catchy slogan, but the reality is different from the rhetoric. Now I'm off to find the promised extra £350m per week promised for the NHS in 2016....

Graham Watson

Graham Watson has taught Economics for over twenty years. He contributes to tutor2u, reads voraciously and is interested in all aspects of Teaching and Learning.

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