Students are riding to the rescue of staff-starved British businesses by driving a record net increase in the number of people coming back into the workforce.
(Bloomberg) — Students are riding to the rescue of staff-starved British businesses by driving a record net increase in the number of people coming back into the workforce.
The number of adults sitting on the sidelines of the jobs market — classed as economically inactive because they’re out of work and not looking for jobs fell by 113,000 in the three months to December, the Office for National Statistics said Tuesday. That reflects a sharp decline in students and fewer long-term sick people not looking for work.
Signs that workers are returning to the jobs market could help to relieve the pressure on businesses seeking to fill stubbornly high vacancies. Britain has been one of the only countries to suffer a shrinking in the workforce since the pandemic struck, fueling concerns at the Bank of England that a tight labor market is powering inflation.
“The huge rise in inactivity levels since the pandemic has been the key reason the labor market is so tight, and for staff shortages, so the signs that this might be starting to ease is uniformly good news,” said Thomas Pugh, economist at RSM UK.
Young people returning to the workforce underpinned the improvement, with 134,000 fewer students in the economically inactivity figures compared to the previous three months. It helped to reduce the overall rate of workers either not in work or not seeking jobs by 0.3 percentage points to 21.4%.
Along with rising sickness levels, a jump in the number of students since the pandemic struck has been one of the key drivers of the shrinking workforce. But this appears to be unwinding as courses end and they enter the workforce.
There were also 54,000 fewer long-term sick people but economic inactivity still remains 516,000 higher than before Covid.
“This may be a sign that 2023 will see an uptick in workers taking on extra hours or returning to the labor market to offset cost-of-living pressures,” said Paula Bejarano Carbo, economist at the National Institute of Economic and Social Research.
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