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UK Job Vacancies Rise to Record High


The BBC has reported the job vacancies have hit a record high, surging past one million for the last three months according to official figures. This is the highest vacancy levels have been since 2001.


This rise is particularly evident in the food and accommodation sector, who saw the biggest jump in the number of jobs available in August, increasing by 57,600.


The creation of job vacancies has been caused by firms upscaling factor inputs as the price mechanism is signalling and incentivizing them to do so.


Some see the vacancies as a restoration to the economy. With the lifting of lockdown restrictions, many businesses can get back to opening and creating revenue. Therefore, this rise in job vacancies may be a sign of some returning normality.


On the other hand however, there are factors beyond COVID-19 impacting the UK economy. With the UK leaving the EU, the new migration restrictions have made it harder for workers to obtain the necessary visas to live and work in the UK. This has discouraged EU workers from entering the UK labour market, thus causing an increase in empty vacancies. Therefore, perhaps the rise in job vacancies is not due to job creating, but from a shrinking labour force.


Business groups have said that despite the return of staffing levels to pre-pandemic rates, there still remains high demand for more staff. Thus, the problem may not be new job vacancies, but labour shortages, which could potentially dampen the growth in staffing levels.


The Furlough scheme is partly responsible for the labour shortage, with ONS surveys showing that there is still well over a million furloughed.


It is likely the scheme has led to many feeling reluctant to look for new jobs. When on the scheme, employers are not working, but receiving 80%of their wages (capped at £2,500 per month). Therefore, there is an element of job security, and many are unwilling to take the risk of resigning in an attempt to find another job, as they may be left unemployed.


Another reason behind the labour shortage is, once again, Brexit. Those who use manual and unskilled labour in their industries are particularly suffering. Ali Capper, who owns Stocks farm told the BBC that they “advertised for 70 fruit pickers and [...] had 9 applications”. Industries such as agriculture are used to relying on seasonal workers from the EU, but are unable to access them currently. This creates huge issues along the supply chain, as harvests need to be done quickly otherwise there is food waste.


However, hopefully the number of vacancies appearing throughout many markets is a sign of economic recovery within the economy as despite rising Vacancies, the UK unemployment rate is decreasing, thus showing signs of labour market recovery.

Overall, it seems that a combination of eager employers, who want to hire more workers, and hesitant individuals, who do not wish to work due to the health risks associated with COVID-19, is making the Vacancy gap larger and larger.

 

Written by Charlotte Hurst

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