Overseas labour returns, productivity recovers

These comments are from two Bank of England researches studying the UKs poor productivity record, providing solid proof of the inefficient “Bums on seats” economy that has been possible with cheap labour from overseas.

“A common thread … in the post-crisis period had been that, when looking to expand their productive resources, companies chose recruitment over business investment…Strong growth of labour availability was associated with low real wages growth….Low real wages growth made these actions affordable”.
“…we highlighted the large inward migration of employees from Eastern Europe; our intelligence was that this ready supply of labour effectively capped wage inflation”.
“Many companies…took advantage of the plentiful supply of potential employees to grow rapidly…[The] workforce pivoted towards lower value-added services and jobs, resulting in downward pressure on average wages and productivity levels”.
“The recent slowdown of labour supply growth may be followed by a sustained productivity recovery”.