Letter in the New Statesman
The New Statesman published my letter in their latest edition, 14th February 2019
Dear sir or madam,
Grace Blakeley (‘The dark side of the UK’s jobs miracle’, 1 Feb) is right to highlight the challenges facing the UK labour market, despite impressive employment growth.
The declining share of wages in national income in recent decades can be attributed to four areas: globalisation, new technology, ‘financialisation’ and a change in bargaining power away from workers.
While Blakeley highlights the role of unions and the case for definancialisation of the economy, it is the two other factors, absent in the piece, that warrant equal attention: globalisation and technology. These, too, will be key to future wages.
With 90 per cent of growth set to emanate from outside of the EU in coming decades, and a fourth industrial revolution now unfolding, the challenge is for the UK to compete more on quality, not just on price.
This requires a radical shift towards a pro growth policy, aimed at achieving higher productivity and wages. This must be underpinned by the right incentives and more investment, infrastructure and innovation, and it also requires easing the regulatory burden on small and medium sized firms, as they will be key for future employment growth.