A recent report entitled “Where have all the workers gone?” puts the number of workers missing at 565,000.
It is the Economic Affairs Committee of the House of Lords which is at the origin of this report, published on December 20. We learn in particular that more than half a million Britons have left the United Kingdom since the start of the health crisis.
How can this labor shortage be explained?
If the new immigration rules that followed Brexit have been questioned, they are not the only, nor the main explanation. Other reasons are now well identified:
- early retirement of the 50-64 age bracket (although inflation is now pushing some back into the market);
- work stoppages which are increasing among adults of working age;
- the ageing of the population.
The hotel and catering industry is particularly affected, because it employed many workers from European immigration, who had to leave the country following Brexit and did not necessarily return. Today, it is immigrants from outside the EU who are strengthening the ranks of the sector.
What are the risks?
The report identifies two important risks: the shortage of workers would slow growth, at the same time as it would favor inflation. By what mechanics? To compete in the recruitment market, companies tend to raise salaries. Even if the rate of increase in remuneration (6%) remains below that of inflation which, despite a timid slowdown, still amounted to 10.7% in November.
The document also points to a peculiarity of the British job market, which would be the only one to experience a hiring rate at the start of 2023 lower than that of 2019 with an evolution of -0.5 points where France should reach +1, 25 dots.
The challenge now, as stated by the Economic Committee, will be to go into the details of these different causes to understand whether this trend is set to continue in the months and years to come.