UK Employment Figures, November 2018: Pay Growth Accelerates as Unfilled Vacancies Hit a New High
Employment ticks up to a record high despite a fall in the number of EU workers
Britain’s labour market continues to hover around full employment with a record 32.4 million people in work, despite a continued outflow of EU workers. Despite a modest increase in the unemployment rate to 4.1% this month, employer demand for staff remains strong, with the number of unfilled vacancies hitting a new high of 845,000. As businesses compete harder against each other for recruits, there is good news for employees: pay is growing at its fastest rate in a decade.
Many areas of the economy, which for years have relied on a steady supply of workers from the EU, are coming under increasing strain as the number of Europeans in the British labour market registers its largest annual fall in history. Though the outflow of EU workers is steady rather than a stampede, and employment among British workers has risen to compensate, it adds to the recruitment difficulties that many employers fear after Brexit.
One of the largest groups leaving Britain are migrants from Poland. With average private-sector salaries in Poland growing at an annual rate of 6.7% – more than twice as fast as British paypackets – many workers who came to the UK in search of a job are being tempted home. This quarter we have also seen the largest fall in the number of Bulgarian and Romanian workers since records began.
UK wage growth is finally picking up as employers try to attract and retain staff. This is a welcome trend for working households. However, the rising prices of goods and services continues to limit improvements in purchasing power. In real terms, the average employee’s gross salary is only £3.50 a week higher than a year ago.
Pawel Adrjan is the UK Economist at the Indeed Hiring Lab and a Research Fellow at Regent’s Park College, University of Oxford. Before joining Indeed, Pawel spent over a decade in investment banking, holding senior roles in risk management, credit ratings advisory, and treasury at Goldman Sachs and Barclays in London and New York. His research focuses on a wide range of labour market topics, such as wages, pensions and the impact of technology on jobs. Pawel speaks Polish, Spanish and French. He has completed a B.A. in international studies and a B.S. in economics from the University of Pennsylvania and an M.Phil. and a Ph.D. in economics from the University of Oxford.