“One of the basic tenets of economics is that raising the price of something – in this case the wages of a chef or a waiter – increases its supply.”
One of the forecasts during the Brexit debate some five years ago was that with fewer migrant workers on the British labour market, employers would have to provide better wages and conditions and even some sort of career to attract ‘local’ staff.
There have been a lot of subsequent studies:
Including a paper from the Carnegie Trust in 2017:
On the positive side, the potential reduction in labour supply for lower-skilled jobs does offer greater scope to increase employment rates for those who have often experienced the most difficulty in accessing the labour market. Additionally, a number of independent analysts are suggesting that employers focused more on lower skills may be forced to increase earnings and improve conditions to retain and attract workers.
But five years on and this has not yet happened.
The impact of there being fewer migrant workers has been felt in the agriculture industries – with the media looking to the West Country back in April:
Reports of daffodils left unpicked in the fields at the Varfell Farms in Cornwall reflect many of the challenges that farmers across the country face. The flower farm employs hundreds of seasonal migrant workers that traditionally come from Eastern Europe.
And although the current pandemic has made things worse, it is still going to be difficult to attract locals – with this piece also from the West Country in April this year:
“The media perception that the field work is low paid and unskilled may be a reality in certain areas and for some work, but we find that cutting several hundred vegetables to certain specifications day in day out, really is not within the realms of most people’s idea of employment.”
Meanwhile in hotels and restaurants, the situation is no better, as reported earlier in these pages:
One solution would be to ask to ‘have our migrants back please’:
Although the labour shortage is not limited to the UK by any means:
It seems, then, that things have changed over the last year – with workers across the board not prepared to tolerate the low-pay, low-status:
Employers Need To Take Long View Of The Current Skills Shortages
One aspect — which many employers may have failed to anticipate — is that the coronavirus has caused people to reappraise their lives. As Kelly puts it, “employees want more opportunity, more security. They are making demands.” She sees the current situation as an opportunity for a complete overhaul of how companies hire and develop staff. “It’s not good enough to have ad hoc training and development,” she says. “We need professional standards. Skills have got to be recognised and valued.” Better employers will realize that and will treat workers with greater consideration and enjoy the rewards, she says. But others, less enlightened, may not do so well. There is a generation of employees — perhaps emboldened by Uber drivers gaining greater rights — kicking back against what many see as the exploitation of zero-hours contracts and other aspects of the “gig economy.”
The pendulum could be swinging. And only the most short-sighted employers should think that paying their workers a little bit more or giving them the odd perk will halt its progress.
The idea of paying people more is not a top priority in some quarters, however:
7 chief economists on how to solve the pandemic’s labour market paradox – The European Sting – Critical News & Insights on European Politics, Economy, Foreign Affairs, Business & Technology – europeansting.com
And yet Larry Eliot writing in today’s Guardian points out that one of the basic tenets of economics is that raising the price of something – in this case the wages of a chef or a waiter – increases its supply: