by The Guardian newspaper has a story about wages in England: A shortage of factory workers is starting to push up pay rates but wage rises in the services sector remain rooted at around 2%, according to the latest feedback from the Bank of England’s regional agents. The central bank said its agents, which are based in offices across the country, found that shortages this month across the manufacturing sector were leading to a “slight increase in pay growth” that would take average rate of pay rises up by half a percent, from 2-3% this year to 2.5%-3.5% in 2018. The report appeared to justify Threadneedle Street’s move last week to increase interest rates, which officials at the bank said was needed to dampen the inflationary effects of wage rises. A survey
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Mike Kimel considers the following as important: Brexit, immigration, labor, Uncategorized, wages
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The Guardian newspaper has a story about wages in England:
A shortage of factory workers is starting to push up pay rates but wage rises in the services sector remain rooted at around 2%, according to the latest feedback from the Bank of England’s regional agents.
The central bank said its agents, which are based in offices across the country, found that shortages this month across the manufacturing sector were leading to a “slight increase in pay growth” that would take average rate of pay rises up by half a percent, from 2-3% this year to 2.5%-3.5% in 2018.
The report appeared to justify Threadneedle Street’s move last week to increase interest rates, which officials at the bank said was needed to dampen the inflationary effects of wage rises.
A survey of employers in October by the Recruitment and Employment Confederation chimed with the BoE report after it found firms were having to raise their pay offers to hire new staff.
The REC said the increase, the second quickest rise in wages since November 2015, followed a fall in unemployment to the lowest level in 40 years that had restricted the number of workers available to take up new positions. It warned that higher pay offers were also needed to counter a growing shortage of EU workers ahead of Brexit.
“We already know that EU workers are leaving because of the uncertainties they are facing right now,” said Kevin Green, REC’s chief executive. “We therefore need clarity around what future immigration systems will look like. Otherwise, the situation will get worse and employers will face even more staff shortages.”
Official data shows that in August net migration fell to its lowest level in three years, with more than half the drop caused by EU citizens leaving and fewer arriving since the Brexit vote.
I find it truly shocking that employment and wages are determined by the market forces, or that the supply of labor is affected by whether foreigners can freely enter and exit a market. Who could have imagined such absurd chains of events? Fortunately, we can rest assured that this is an aberration and can’t possibly apply in the US.