In the course of his discussion with Andrew Milligan, Jonathan Cribb, an Associate Director at the IFS and Head of the Retirement, Savings, and Ageing sector, discussed the labour market in the UK with some policy implications especially for businesses. Jonathan firstly examined the strong demand for labour, exemplified by an unemployment rate of 3.7%, a level last seen in 2017, and well over 1 million vacancies. He explained how there was a broad brush expansion in labour demand since the pandemic began to end, albeit there are some sectoral and regional differences. Examples include extra demand related to working from home, such as e-commerce and delivery drivers, and less demand for services provided for commuters.
The discussion moved onto various factors which have affected the supply of labour since 2020. Brexit has had an effect on net migration from EU countries, albeit this needs to be put into context as there has been an expansion in non-EU migration. A proportion of the population is suffering from greater health issues following the pandemic, although IFS research suggests that the impact is moderate. There is some evidence of a skills mis-match, especially facing younger workers, partly offset by the demand for marketable skills from overseas workers.
Last, but certainly not least, Jonathan Cribb discussed the recent IFS report with his colleague Bee Boileau about the various reasons behind the growing demand for early retirement, by employed and self-employed people. The conversation ended with some policy implications, especially for businesses who could benefit from retaining older workers looking for part-time employment, as well as the pressure on local and central governments from the growing gaps between pay for public and private sector workers.
To read the latest report from Jonathan Cribb and Bee Boileau please click here.