BRITAIN’S LABOUR market is tight. The unemployment rate of 3.8% is the lowest in decades; 76.3% of working-age Britons have jobs, a record high. Good news, you might suppose, for anyone on the lookout for a better job. In the labour market, loyalty does not pay: shifting jobs tends to be a good way of getting a salary boost. In 2017 the average pay rise for a worker staying with the same employer was just 1.1% after inflation compared with 5.4% for someone making a change.
You might also expect supposedly flighty 20-somethings to be eager movers. Yet younger workers remain more wedded to their current jobs than they were before the financial crisis of 2007-09. There is a similar trend in other rich countries, but it is particularly pronounced in Britain. Young Britons’ reluctance to move may be part of the explanation for their dismal wage-growth. In the five years after the crash, they experienced a larger cut in real wages than their older colleagues.
Researchers have long argued that having the simple bad luck to enter the labour market during difficult times can leave lasting scars. Those who are out of work early in their careers tend both to earn less than those who were not and to be at greater risk of future unemployment. But the recession of 2008-09 was different from earlier downturns. The fall in output was greater than in the downturns of the early 1980s and early 1990s, but the labour market performed better.
Bobby Duffy, a former opinion pollster now at King’s College London, argues that the reduced job mobility of younger people is less about an attitudinal shift and more about a change in circumstances: “I don’t think we have a cohort of shrinking violets all of a sudden.” The relatively sluggish pace of the recovery since 2009 has not provided the same kind of opportunities that the 1990s saw for young people. Regional variations in housing costs may also play a role, limiting labour mobility.
Youngsters’ job-stickiness may help to explain the puzzle of Britain’s awful productivity, which is lower than that of comparable countries and growing only feebly. If workers do not move from job to job, resources will move more slowly from low-productivity firms to high-productivity ones. On many measures Britain’s labour market looks in rude health. But the country could do with its millennials being a little bolder.
Way to prove that ''productivity'' is an even dumber indicator than GDP. Congratulations.
Has it ever occurred to anybody that a more generous welfare system would give the incentive for the young to take risks?
That, and a badly-educated workforce.
Maybe the lack of jobs for young people explains their job stickiness.
lol
kuku27 Seeking safety and stability. Risk taking is gone
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