ONS labour market data “the calm before the storm,” says Professor Len Shackleton
“This morning’s data show little change in the employment or unemployment rates, though the number in work has fallen sharply, particularly amongst the self-employed. This is the calm before the real storm which we can expect when furloughing is ended.
“The government urgently needs to speed the bounceback by making it attractive to take workers on again. This means reversing the twenty-year drift to increasing labour market regulation and costly employment mandates.
“In the short run the government should use the powers it has at hand to cut the costs of employing workers – suspend employers’ national insurance contributions, scrap the apprenticeship levy and the requirement for automatic pension enrolment for under-25s, and abandon plans to raise the National Living Wage to two-thirds of median hourly earnings.
“It should also seek changes to the laws relating to the extension of full employee rights to agency workers after 12 weeks, tightly cap employment tribunal awards and reduce the coverage and the complexity of the minimum wage system.
“In the medium term it should review occupational regulation to make it easier to enter fields where there is no real danger to the public from wider recruitment – including estate agents, teachers, social workers, non-medical therapists and security guards.”
Notes to editors
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IEA Editorial and Research Fellow Professor Len Shackleton is available for further comment.
For further reading:
Rebooting Britain: How the UK economy can recover from Coronavirus ; How the labour market can recover from the Covid-19 crisis; We need a post-Corona Ludwig Erhard; Covid-19, pay stuctures and compensating differentials: why we need greater wage flexibility
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