Unemployment Down, Wages up - any explanations?

GreatApe

michaels wrote: »

I bet if hand car washes were more expensive because cheap migrant labour was not available then there might have been more investment in car wash machines that don't damage the paint. Sure fewer people might pay to have their car washed but productivity would also be higher as more of the washes that were done would be by a machine.

Even barristas and nail technicians can be replaced by robots as is happening in Japan where labour is scarce due to a falling and aging population.

well surely those machines would firstly be invented and deployed in the areas where wages are higher than the UK. Wages are a good deal higher in the USA and they have a market 6x the size so any robo development is likely to take place there. Once invented marginal cost of additional robots and software is low so it will filter down to the rest of the world.

Filo25

Just to echo other comments earlier in the thread, the real story here clearly isn't a minor increase in nominal wage growth, it is the massive squeeze on real wages.

I'm getting a higher wage increase in 2018 compared to 2017 as well, and that's not due to falling immigration, its pretty simply because we get base rises equal to inflation every year, you would expect inflation rates to be a significant factor in any annual pay review.

Thrugelmir

GreatApe wrote: »

Wages are a good deal higher in the USA

Jobs in the US offer far less security and benefits, i.e. sick pay, holiday entitlement, maternity pay etc. In essence people work harder and are therefore more productive. Nor do people benefit from universal health care.

HAMISH_MCTAVISH

michaels wrote: »

productivity would also be higher as more of the washes that were done would be by a machine.

Even barristas and nail technicians can be replaced by robots as is happening in Japan where labour is scarce due to a falling and aging population.

Perhaps you'd care to explain why British productivity is 11% higher than Japanese productivity then...

And while we're here, perhaps you could also explain why British Real wages were rising by 2% with higher immigration in the two years prior to the Brexit vote, and are now falling by 1% with lower immigration since the Brexit vote.

Oh yes, almost forgot, as our resident productivity champion, maybe you could also just let us know why UK productivity is so much worse than Germany, France and Italy (all countries in the EU and Schengen zone with unlimited free movement) but around 4% better than productivity in Canada (which last time I checked was not in the EU).

It seems this whole immigration/wages/productivity malarkey is a bit more complicated than some Brexiteers make out.... :whistle:

Thrugelmir

Filo25 wrote: »

you would expect inflation rates to be a significant factor in any annual pay review.

There's no linkage to an organisations ability to pay though. Nor a requirement to if the market in general is paying less for the same roles. Good employers will value their employees and pay at a level to retain them.

Thrugelmir

ilovehouses wrote: »

if there's inflation it means employers are getting more money from consumers

Not if consumers spend less as a result.

Filo25

Thrugelmir wrote: »

There's no linkage to an organisations ability to pay though. Nor a requirement to if the market in general is paying less for the same roles. Good employers will value their employees and pay at a level to retain them.

In extremely tight Labour markets it usually no longer mattes if the employer can afford the increase or not, if they can't someone else will and people will move employers.

It is still something of a conundrum that unemployment is low by resent historical standards and it is co-existing with falling real wages.

Not that falling real wages are all bad news, yes it is clearly squeezing living standards, but if nothing else it should stop a one-time inflationary increase due to devaluation from becoming an old-school inflationary spiral.