Tuesday 16 April 2019

Positive benefits of EU Referendum felt by all already by all UK residents

Let's compare and contrast some statistics that Remain fans will not want published too much, for fear they give succour to the Leave cause.

Firstly, here is Reuters news today:

Total earnings, including bonuses, rose by an annual 3.5 percent in the three months to February, the Office for National Statistics said, matching the median forecast in a Reuters poll of economists.

That was the joint highest rate since mid-2008 although in February alone the pace of wage growth slowed.

Britain’s labour market has defied the approach of Brexit, helping households whose spending drives the economy.   
The ONS said employment grew by 179,000 in the three months to February, in line with the Reuters poll forecast.

“The jobs market remains robust, with the number of people in work continuing to grow,” ONS statistician Matt Hughes said. “The increase over the past year is all coming from full-timers, both employees and the self-employed.”

The pace of wage rises remains slower than the 4 percent increases seen before the financial crisis.

Of course they have a nice 'Despite Brexit' line in here as always!

But more interesting is they only explain half the conundrum of rising wages. Here the author wants the readers to believe the simple causation between new job creation and rising wages. However, we know this cannot be the whole story as Britain has been a jobs miracle for over 7 years, with huge growth un employment but a very patchy record on wage growth. Indeed, it has been poor, with wages only now rising above the Financial Crisis period.

So what else might be a driver to be pushing up wages? Perhaps as well as demand issue there is a supply issue, what is happening to the supply of Labour?

Below are the recent ONS migration statistics:

And what a surprise we see! there is a big drop since the referendum in EU people coming to the EU looking for work and although and increase in Non-EU, there is not enough to offset this. Furthermore of the EU citizens coming to look for work the real drop is in Eastern Europeans coming to the UK, in fact on balance they are leaving the UK, even as overall migration remains at all time highs.

What this shows us is that the Referendum has already put people off coming to the UK (thanksto all media for calling Leavers 'Racist' for 2 and a bit years, it seems to have worked!). This in turn has reduced the supply of Labour looking for work, which when allied to a continuing increase in jobs available has led to the Holy Grail - Lower long-unemployment, Lower youth unemployment, record tax revenues and decent wage increases. No wonder the overall economy is looking pretty healthy, despite Brexit!


Matt said...

The numbers must be wrong. For those hardworking foreigners were not taking British jobs as we've been told for years. Something else must be happening instead.

CityUnslicker said...

Indeed Matt. I like to see how they try to explain it away all the time and above all, never mention this in polite company.

Raedwald said...

Even if you find a Remoaner who will admit that the absence of low-wage foreign competition is having a positive effect on wages, they will still not admit that those EU workers have been leaving the UK out of, erm, economic self-intrest rather than 'fear' of Brexit.

On the eve of the 2016 referendum the £ was at €1.24, having been up to €1.35 - €1.40 in 2014/2015. Last year it chuntered along at €1.10 - €1.12. That's a 20% drop in income for Poles and Bulgarians sending their wages home. Germany became more attractive, particularly given UK housing costs, so they left. Not fearing Brexit at all, but maximising their economic benefit, as befits capitalism

E-K said...

Must be all that stockpiling and the extra delivery drivers needed.

Fuck me, I've only just recovered from the long weekend in Remainsville. How can I have spent £35 on beer one evening in a Wetherspoons ?

E-K said...

I suppose they could say Brexit hasn't happened or - quite realistically - Brexit ISN'T happening.

Anonymous said...

But with Brexit becoming BrINO, the Guardian is already looking forward to more house price rises.

Anonymous said...

If you lack the will to invest in productive capital, you throw people at it - the UK's "productivity puzzle". Good news for employment and wage growth but bad news if you are holding sterling.

Watch sterling slide. Watch the pre-Brexit stockpiling unwind. And with a depreciating currency, house prices will go up but their value against a basket of currencies won't.

Is it good or bad? Depends on where you have hedged.