Bank of England boss, Mark Carney, told the BBC Radio 4 ‘Today’ programme that foreign workers are helping to increase the UK’s productivity.
Presenter John Humphrys asked Mr Carney if “cheap foreign labour” was actually stopping productivity increasing. But Mr Carney replied, “I would really dampen down that explanation.”
He said that there had been a significant growth in employment in the UK, which has one of the strongest jobs markets in the world.
“We have seen a huge increase in the willingness of British people to work,” said Mr Carney.
“In the course of the past two years, the number of older workers, those in their 50s and 60s who have stayed in the jobs market, has been more than 300,000 more than we would have seen in previous times. In addition, people want to work more hours, that’s another 200,000 to 300,000 effectively more workers.”
Continued Mr Carney, “Compare that to the increase of net migration, the increase to the number of people coming to these shores: the first two numbers I gave you total up to more than 500,000, the increase in net migration over the same period, the last two years, is 50,000.
“The real story here is that British people have wanted to work more, and what’s happened with the economy is that jobs have been created, people are getting those jobs, and now that spare capacity is being used up. ”
Consequently, said Mr Carney, the unemployment rate was now down to 5.5% and 200,000 new jobs had been created in the UK in the past two months alone.
But Mr Humphrys put it to Mr Carney that “there are a vast number of foreign workers working in this country… and many of them, most of them, are working for very little money indeed.”
Responded Mr Carney, “What you see with foreign workers is that when they first come in, they tend to work in lower skilled jobs, they tend to over-fill those jobs so that they have more qualifications than the jobs require.”
But, said Mr Carney, this changes over time. “They move up the skills chain, they move into jobs that are more suited for the skills that they have, they contribute to that increase in productivity. That’s something we see across the economy.” As a result of all this, Mr Carney said, British productivity should soon be rising.
The Bank of England governor added, “One of the biggest advantages that this economy has is access to the European market; it’s the largest economy in the world, it’s our largest investment for destination, it’s the largest investor in the United Kingdom.”
Other stories by Jon Danzig:
- Why Britain needs migrants
- Does the Prime Minister know what he’s doing?
- Benefit tourism: why ‘fix’ a non-existent problem?
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