Remoaning about the Labour Market | A.D.M. Collingwood
A Michelin-starred restaurant in London is to stop serving lunch due to a lack of staff, the BBC has reported in the latest of a flurry of articles reporting the hospitality sector’s struggles to fill job openings. Predictably, the Remoaner crowd (who increasingly resemble the fanatical Japanese soldiers who refused to surrender after the Second World War and were to be found well into the 1960s holding out in caves and jungles across the Western Pacific) have cheered these news stories as an example of the calamitous effects of Brexit.
However, this says far more about the selfish, solipsistic nature of the Remainer’s key arguments than it does about any of the supposedly deleterious consequences of Britain’s decision to leave the EU.
Restaurants, cafes, pubs and clubs are not ‘struggling to find staff’. What their owners mean when they make this claim is that they cannot find people to do the job at a wage they are willing to pay. Basic economics shows us that the demand for such employees matches the supply of workers willing to fill those positions at the equilibrium wage: in other words, if businesses paid more, they would find staff.
For many decades, hospitality businesses have benefitted from a steady supply of labour from the EU. Across the UK, as many as 30% of such jobs were filled by EU citizens, and in London more than 50%. Any increase of the demand for waiting staff or baristas could thus be met not by raising wages, but by tapping into an effectively infinite pool of willing workers from the EU.
This is now changing. The pandemic saw 1.3 million EU citizens relocating back to their home countries from Britain, and Brexit will mean that at least some will never return. Thus, instead of having prospective employees essentially bid for jobs, the hospitality business finds itself bidding for staff. As a consequence, wages have already risen by as much as 14%, significantly above the rate of inflation.
Business owners, faced with the shock of having to increase wages significantly for the first time in many years, are squealing. This is understandable given their interests lie on the bottom line of their P&L statements. What is less fathomable is why many commentators on the Remain side of the referendum debate should point to this as a negative consequence of Brexit. “Brexit means higher wages for the working class” is not a campaign slogan likely to persuade the Red Wall that they were wrong to vote to leave the EU.
More broadly, however, given Remainers are largely of the political left, one might have thought they would be delighted that some of the poorest workers in our country are being paid more. Perhaps they would see this as at least one consolation prize to be drawn from Brexit? No chance. If leaving the EU meant a cure for cancer, Remainers would refuse to see it as a benefit.
Or perhaps there is something more at play? Remainers have never tired of reminding us that they are on average richer and better educated than Leave voters. The median Remain voter, therefore, is much less likely to see any benefit from wage increases in retail and hospitality. However, they can expect to pay more for meals out, masala lattes and nannies – far larger portions of the ABC1 social group’s spending than the C2DE group’s.
In this sense, we should probably have a bit more sympathy for the metropolitan left’s somewhat less than enthusiastic reaction to news of service sector wage increases. After living through a couple of decades that increasingly resembled the Gilded Age, missing your lunch at a Michelin-starred London restaurant and having to raise your own children must feel like an unpleasant change of lifestyle.