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Economics

In the News

Labour Markets - Where have all the workers gone?

Graham Watson

2nd August 2021

Here is a really interesting article about the impact of coronavirus on the labour market, and the nature of the recovery.

It's clear that the recovery is uneven, and the notion of the K-shaped recovery, with different rates of recovery in various sectors, re-appears.

However, the bulk of the article is about the impact of the pandemic on the labour market.

There appears to have been a decline in the labour force: the suggestion is that some workers have returned home - with some Polish workers having gone home - and others having re-assessed whether or not to work.

Does this mean that there's been a permanent decline in the UK economy's productive capacity?

More evidence here of labour shortages in the UK, with the appearance of £10,000 'golden hellos' in certain labour markets - notably that for care workers and chefs.

Proof that markets almost always find solutions.

More lovely basic economics here, showing how markets react to changing market conditions. In this case, a shortage of HGV drivers has seen supermarkets raise wages to attract more workers into the profession.

Of course, factor in Brexit, and the pandemic and it might, in the long term, require more than a £1,000 bonus - which, if I were a lorry driver, I'd find insulting in the light of the extent of executive bonuses - to attract and retain workers.

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