THE EMPLOYMENT boom that has confounded market observers is down to the UK’s flexible labour markets, Legal & General said today, and is not down to government jobs schemes or fudged data.
Despite a double-dip recession, employment has increased in release after release, a puzzle which Legal & General economist James Carrick put down to flexible labour markets, aided by mobile migrant labour. “The jobs figures have been puzzling,” Carrick said, “Ordinarily a slowing economy leads to rising unemployment but official figures suggest something else is happening.”
Carrick pooh-poohed “cynical” suggestions that the figures were being “fudged”, and instead hailed the UK’s flexible labour markets – ranked third in the world by the OECD group of developed economies. “We’re seeing signs that the UK workforce is more flexible than previously thought,” Carrick said. “One factor may be the higher share of migrant labour – as people without family ties to a region are probably happier to move to find work.”
Carrick explained that this flexibility was contributing to the apparently limited structural unemployment, which is where employees’ skills or location is unsuited to the jobs on offer, even if they do exist.