Half a million workers have vanished. Policymakers don’t seem to understand why
As the UK sidles gingerly past the pandemic, a big mystery looms. Where have all the employees gone? Unemployment is around its lowest level since 1974 and well over a million positions are vacant. There are plenty of jobs to help offset those eye-watering fuel and grocery bills yet, since Covid hit these shores, 565,000 Britons have dropped out of the workforce. They have become what statisticians define as “economically inactive”, which is to say of working age yet neither in a job nor wanting one.
Even as trains sit in sidings, Christmas post goes undelivered and nurses form picket lines, here is a different story about workers – one that gets barely a mention. The country’s workforce has shrunk, with serious implications for employers, inflation, tax revenues and economic growth. Yet the policymakers paid to analyse such phenomena have no idea why it has happened. The governor of the Bank of England, Andrew Bailey, accepts that the situation is “very unusual”, while one of his deputies, Dave Ramsden, says: “It’s not clear what is driving this participation puzzle.” A giant shrug from Threadneedle Street then, while ministers waited until last month to launch an investigation.
