As the Bank of England’s chief economist Spencer Dale put it in a speech on Wednesday, shortly after the jobs figures were published, “the harsh but inescapable reality,” is that, “households and families in our economy are worse off. Much worse off.”
He highlights the “extraordinary flexibility” of wages. Once adjusted for inflation, pay is now more than 15% lower than where it would have been if it had followed the pre–crisis trend.
In other words, the “flexibility” of the labour market has meant that anxious workers have had little choice but to accept paltry pay rises in exchange for holding on to their jobs.
The Office for National Statistics has also revealed that the number of people who are “underemployed” – working fewer hours than they would like – has increased by more than a million since 2008, suggesting many are struggling to get by on less income than they would like.
And at the same time as workers are accepting these unenviable choices, sterling is weaker on the world’s foreign exchange markets, making imports more expensive. And the slow rate of economic growth, despite the improving employment picture, suggests productivity – measured as the amount each person produces per hour – has plunged.
Economists aren’t sure how to explain this last development – it may be because the battered financial sector is still casting a shadow across the rest of the economy, or some of the productivity uplift in the boom years was illusory.
Choosen excerpts by Job Market Monitor from
via Flexible jobs market means anxious workers and declining living standards | Business | guardian.co.uk.
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