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What labour shortages?

There’s much talk about labour shortages. These, however, are largely localised. The aggregate labour market is still one of excess supply.

The shortages are largely confined to three sectors: lorry driving, where there are 90,000 fewer drivers than needed; care workers where there might be a shortage of 190,000 by the year-end; and hospitality businesses where the Office for National Statistics (ONS) estimates that there are 117,000 vacancies – 30 per cent more than there were on average before the pandemic. This gives us a total of just under 400,000.

Which is small compared with the level of joblessness. There are 1.6m people officially unemployed and a further 1.8m people outside the workforce who want a job. That’s a total of 3.4m or 8.2 per cent of the working-age population – 200,000 more than at the pre-pandemic low point. This means that even if the three sectors where there are shortages were to recruit within the UK, we’d still be left with 3m unemployed – over 7 per cent of the working-age population.

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