Why labour shortages may not herald a boost for wages

Larry Elliott (So what’s so wrong with labour shortages driving up low wages?’, 29 August) doesn’t acknowledge that there are upwards wage pressures everywhere from Germany to Singapore and from Norway to America – in other words, in places that didn’t have Brexit. Moreover, moribund wage growth afflicted all of the advanced economies following the global financial crisis, not just the UK.

Second, it is true that migration correlated with a negative effect on low-paid occupations. However, that effect is tightly contextualised in terms of numbers of new occupational entrants and is consistently reported as being small. Compared to the effects of the financial crisis, the immigrant effect is very small indeed – as all the research shows. Perhaps tackling the underlying causes of low pay in tight labour markets rather than celebrating the removal of workers for being here in the wrong numbers might be more productive.

Third, in every election since 1979, the UK electorate has voted in governments committed to an insecure, deregulated, low-wage service economy. The effect of supporting this political economic settlement far outweighs any impact of migrants on wages. The “cheap labour” that Brexiters keep banging on about is a consequence of electoral choices, not patterns of migration.

Fourth, it is true that increased demand supports the creation of a lot of low-paying jobs, but it also supports the creation of jobs right across the occupational spectrum – from manufacturing through to health services, banking and law. It is disingenuous to disregard the positive national elements of increased demand. To conclude that Brexit straightforwardly represents a victory for a casualised workforce without addressing the realities of the political economy of post-1979 UK or the state of the global labour market is simplistic.
Dr Martin O’Brien
Lancaster

Larry Elliott says the casualised workforce will benefit from Brexit due to wage increases and that Brexit is “doing what it was supposed to do” for them. He neglects to mention a less welcome effect of labour shortages: inflation. How will higher food prices affect the living standards of the less well-off people he claims to speak for? This issue is not mentioned. Perhaps it would damage his pro-Brexit narrative.
Simon West
London

The report on the shortage of blood test vials states that according to NHS England “it will take time for these products to be imported” and the main supplier cites “UK border challenges” as one of the factors in the shortage (26 August).

The blame for this lies squarely with the government and its hard Brexit policy, and the failure of ministers and officials to plan ahead for such issues by relying on non-UK suppliers instead of facilitating supply chains from British companies.
Ian Arnott
Peterborough

I can’t understand why there is a shortage of lorry drivers and fruit pickers. Surely many of those who voted for Brexit are queueing up for these jobs which they knew would soon be available?
Elizabeth Pearson
Barnet, London

Brexit means continental breakfast (Food industry proposes ‘Covid recovery visa’ after warnings of surplus pig cull, 27 August). Did Dominic Cummings know this? We should be told.
Ekkehard Kopp
Hull

Comments are closed.