The labour market is at a turning point, according to a report from the Resolution Foundation. It forecasts that average real pay – allowing for inflation – will surpass the peak it reached in 2008.
But the record levels of employment characteristic of 2019 are at risk, the thinktank said, adding that “Brexit uncertainty and global headwinds sapped business confidence, leading to stalling investment and zero productivity growth”. A year of historically poor GDP growth – on course for just 1% – puts into question whether employment levels of 76.2% and strong pay increases can continue in 2020.
Torsten Bell, chief executive at the Resolution Foundation, said: “2019 was a bad year for the economy, which looks set to have recorded its weakest GDP growth outside of recessions since the war. However, the part of the economy that households really care about – the labour market – defied the economic gloom and delivered record employment and decent pay growth.
“As we look ahead to the new year, the crucial living standards question facing the country is whether the labour market can continue its bullish run into 2020.”
The report said that there were “clouds on the horizon” according to key indicators such as a decline in advertised job vacancies and an increase in unemployment among 18- to 24-year-olds.
Bell said: “The future is an uncertain land, but our best guess is that 2020 will be very different from the last few years. We may well see a welcome return to record pay levels, but a less welcome retreat from record employment, with worrying signs including falling vacancies and rising youth unemployment. [...]
Full article on The Guardian
Resolution Foundation press release: Slow growth poses risk to jobs in 2020, even as UK returns to record pay
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