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Sunday, October 24, 2021

Europe’s schadenfreude is premature – it will soon share our supply chain pain

As it is, most European countries are facing exactly the same acute labour market shortages as the UK. 

Germany, for instance, is short of 80,000 and rising HGV drivers, and Belgium 5,000. Across the Continent as a whole, there are said to be nearly half a million vacancies for long distance lorry drivers, which is why the UK’s miserly offer of visas for 5,000 of them has so far attracted only 27. 

Similar staff shortages as we see in Britain also abound in hospitality, forcing bars, restaurants and hotels to reduce their opening hours accordingly. The same is true of higher skilled employment such as IT. Almost everywhere, wages for the newly recruited are going through the roof. 

Why is this? Why is it that a public health emergency that was expected to cause a big rise in unemployment has in fact done the reverse, with near record numbers of job vacancies across the Content and Britain? 

Part of the answer lies in furlough and similar job protection schemes in Europe, but the main explanation is that since the pandemic began a larger proportion of the workforce has become economically inactive.

There are in other words fewer people who could work, in that they are of working age, who are actually working.

The statistics are striking: according to the latest labour market data, there are 657,000 fewer people of working age employed in the UK than before the pandemic. That’s partly explained by migrant labour returning home after Brexit, and by the fact that, helped by less demanding entry requirements, many more young people have chosen to enter full-time education.

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