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IEA - Still a glimmer of hope for a job-rich recession

Professor Len Shackleton, labour market expert at free market think tank the Institute of Economic Affairs responds to yesterday’s ONS labour market figures

“Yesterday’s labour market data show very little change from last month – although that change is mainly in a negative direction, with unemployment creeping up and economic inactivity rising again. Real wages continue to fall as nominal pay fails to keep pace with inflation, particularly in the public sector. This can only encourage more industrial action, with strikes already leading to the highest level of days lost for more than a decade.

“On the positive side, payroll employment is still rising, though slowly, and there are still far higher levels of vacancies than we might expect with falling GDP.

“Much depends on this week’s fiscal statement but, fingers crossed, we may still hope for that paradoxical unicorn, a job-rich recession. This would be facilitated if the new government took on board one worthwhile element of Trussonomics, the emphasis on deregulation – particularly the need to reduce red tape in hiring workers or setting up in self-employment.”

Labour market overview, UK : November 2022

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