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.
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!