Brexit migrant exodus not to blame for labour squeeze

Hundreds of thousands of Brits have stopped working since the start of the Covid-19 crisis, creating a vacuum of workers, according to fresh figures released today.

Research by the Resolution Foundation found the number of workers who are economically inactive – which means they are either not working or not looking for work – has swelled 586,000 since the onset of the pandemic.

Claims that a sharp reduction in the number of migrants living in the UK since Brexit has triggered a labour squeeze could be overstated, according to the Foundation’s report.

The volume of people flowing into economic inactivity is much larger than the number of migrants leaving the country, the Foundation said.

A scarcity of candidates has led to supply chains snarl ups and fuelled inflationary pressures in the UK economy due to businesses hiking starting pay to attract talent.

Growth in ome sectors of the economy have struggled to maintain the same pace registered in the immediate aftermath of the Covid-19 unlocking, clouding the prospects for the UK’s economic recovery.

The biggest reduction in older workers in the jobs market in any other recession for the past 40 years has primarily driven a shrinking in the labour pool. 

Difficulties finding work after losing their job during the pandemic has been blamed on large swathes of older workers retiring before they planned to.

Hannah Slaughter, economist at the Foundation, said: “The pandemic has seen older workers withdraw from the labour market – and while anxieties about high levels of Covid-19 may understandably put some off from working today, the danger is they find themselves in early retirement tomorrow.”

Younger men have also been one of the largest contributors to lower workforce participation as many opt to stay in education to acquire skills to make them more attractive to employers.