LONDON - For 2 1/2 years, the upstairs room at Luc's Brasserie, a French restaurant in the City of London, has sat idle, closed off through the ups and downs of the pandemic. Next month, it will finally reopen with freshly painted walls, new decor and a calendar filling up with reservations.Mr Darrin Jacobs, the owner of Luc's, needs to hire three more people to serve the diners, and he has been looking for months.
In some ways it is a great time to be a worker in the hospitality business. Wages have jumped higher and experienced staff can afford to be extremely picky about where they work. One particular source of concern is there are now half a million more people in Britain who are not working or looking for work, called"economically inactive", including a large increase in the number of people who are counted as"long-term sick". At the same time, the number of job vacancies has exploded to nearly 1.3 million, a record high.
But there has also been above-average wage growth in traditionally highly paid jobs: Average earnings jumped more than 6 per cent in the finance and business sector. Just a few months earlier, wage growth in the sector topped 10 per cent. For policymakers at the Bank of England, though, the overall growth in wages is a sign of trouble. They cited the tight labour market as one of the key reasons for increasingly aggressive interest rate increases, which have the ultimate goal of making money more expensive to reduce spending and slow down the economy.
This desire to hire has hardly slowed down even as Britain heads toward what the central bank is forecasting to be a long recession starting later this year. Companies are reluctant to shed staff because they do not want to repeat their experiences after pandemic lockdowns, when it proved difficult to replace the workers they had let go once demand returned.
Some cases are likely to be long Covid-19 and others from delayed treatment, an issue of increasing distress in Britain. There are about 6.6 million people waiting for care from the National Health Service, a backlog that will take years to clear.