In September, the ONS reported wages were growing at the fastest rate in three years. Today, the latest edition of those figures shows a further improvement, to the fastest rate since 2008. What’s more, it’s another quarter in which wage growth has outstripped inflation. In other words, people are getting better off in real terms.
As Paul has previously noted, the continued rumbling away of positive economic news is quietly bolstering the Government’s poll figures, helping to explain why they have held up rather better than might be expected given the many other serious problems the Prime Minister faces.
There’s a Brexit aspect to the positive news on wages, too, as I pointed out a couple of months ago. The general context for rising wages is near-full employment, but there’s also the specific circumstance of falling net immigration. If the supply of workers is more constrained than it might otherwise have been, that’ll be contributing to upward pressures on pay.
ConservativeHome was far from alone in arguing in 2015 that such an effect might come about from a Leave vote. Indeed, Stuart Rose, head of the Remain campaign, memorably argued at the time of the referendum that: “If you are short of labour, the price of labour will go up.”
Peculiarly little media attention is paid to this story. For example, yesterday the Chartered Institute of Personnel Development – the HR industry body – were interviewed on the Today programme, warning of employers’ concerns about a shortage of skilled and un-skilled workers coming to this country. It’s fair enough to explore those concerns, and the costs to business of a shortfall in the workforce, but somehow the BBC managed to get through the whole discussion without even mentioning the outcome of rising wages for the UK’s existing workers. That’s an amazing thing to simply ignore.
The interesting question is whether voters, and particularly Leave voters, are noticing this happening – or assuming that it is – with or without the media’s help.