The Changing Nature Of Work

In what has been a rather lacklustre economic recovery one standout success for the UK has been job creation. In the last eight years the number of people in employment has risen by 10% to record levels. Self-employment is up by a quarter. Britain's unemployment rate today is one of the lowest in Europe and at the lowest level since 1975. There are three quarter of a million job vacancies in the UK today.

Common sense suggests that as unemployment falls, and employers struggle to fill vacancies, wages will rise. This relationship is embodied a simple economic model, the so-called Phillips Curve. Yet today this model, and this way of thinking about wage pressures, no longer seems to work for the UK.