The unemployment rate in the United Kingdom has remained steady. Currently, the 4.9 percent figure is close to an 11-year low. The slight shift suggests employment opportunities grew throughout the summer months. It also indicates the number of current vacancies is fairly high.
Record High Employment Levels
Based on the most recent figures, the number of employed people in the UK has reached a record high. With 31.8 million people employed, it supports the other signs of favourable growth. While unemployment levels did technically rise, it was caused by more people choosing to look for work and not necessarily a sign of job losses.
Job Seeker Benefits
Lower unemployment rates mean fewer people are available to fill vacant positions. This can provide a number of benefits to those looking to re-join the workforce or are considering a job change. Since the number of available positions remains high, job seekers may be able to secure higher salaries or better benefits.
Certain sectors, such as technology, may even have lower employment levels than the average. This means that people who possess skills in those areas are poised to ask for more from their next employer.
However, salaries have yet to mirror the increase in demand for employees, which may be cause for concern. Since wages aren’t increasing in conjunction, many people are not feeling the benefits of the increased opportunities throughout the country.
Downside of Low Unemployment
While it is hard to imagine a downside to low unemployment, there, in fact, is one. Companies may be struggling to find the skilled employees they need to effectively run their business. This can cause issues in the areas of production, which may lead to price changes in some sectors.
Some areas particular hurt by low unemployment include technology and health care, as well as many manufacturing trades. This creates skill gaps within certain organizations. In response, manufacturers may have to turn down additional business, or medical facilities may become more strained.
These issues are only highlighted by the pending retirement of baby boomers throughout the world. The number of available workers is expected to decrease notable in the next 15 years, which can cause even more dramatic shortages in the years to come.
Low Unemployment Concerns Aggravated by Brexit
Part of the reason behind the Brexit vote was to restrict the entry of people from other countries into the UK. Immigration was a primary concern cited by politicians and voters throughout the area. However, restricting the ability of foreign workers to enter the country could lead to greater shortfalls in key employment categories, such as farming and agriculture.
For example, it is estimated that 90 percent of British produce is picked, graded, and packed by workers from other nations. While the UK also imports produce from other nations, approximately half is from local sources. When many people are interested in purchasing more locally produced products, including food items, removing these workers from the pool of available labour may have unintended consequences.
It is unlikely the full impact of the Brexit vote will be known for some time, so most of these changes are currently only theory. But, if the unemployment rate continues in the same direction, a worker shortage could be a reality.