(Apologies for the slight break in service, both Messr's Drew and Cityunslicker have been travelling a lot over the last week...normal service now resumed. Thanks to Mr Q. for filling in, pity he was again overlooked in the re-shuffle)
So today we have good employment numbers, with unemployment down to 6.6% (Germany is at 6.5%, USA at 6.3%, Canada 7.1% , Holland 7.2%, Sweden 8.3% France 10.4%, Italy 12.4%). The UK is well placed in the Western world in terms of unemployment rates overall. The levels have come down significantly in the past year and continue to do so. With a 4% probably around the lowest any economy could sustain (even China has over 4% and Japan too), the UK is on track to get back down in the next few years to the trend rate of 5.0%.
Which is great news for the Government. However there is a big BUT coming. Wage growth has fallen back again to only 0.3% this month. There is simply no pressure on employers to have to pay more for their staff, even if supply is tighter, clearly in many sectors this is not enough to actually engender any wage inflation.
Again, the core reason for this is the increase in self-employed workers. This can skew the statistics, as self-employed people on the whole earn less than employed people. Reality of course tells me something different. Self-employed people are able to claim all sorts of expenses and costs, as well as potentially take cash in hand payments. Many industries with high earning workers like IT have gone almost entirely to a self-employment consultant model. The companies gain great labour flexibility and reduced taxes. The workers lose rights but gain in taxes and flexibility too.
This may well be the model of the future, however it also leads to downward pressure on wages as a per day rate or per hour rate is hard to negotiate on an individual basis - after all, this is why Unions rose to prominence in the first place!
Also some very under-employed people are likely to call themselves self-employed for their own needs of self-esteem.
No doubt overall there is more work available as the economy grows, but how this is shared out and how much tax people want to pay on their earnings is there for all to see.