When even the leading economic forecasters get these sorts of things wrong we can see wy the noodle-necked in the lefty think tanks get confused:
U.K. joblessness held steady at 3.8% in the December quarter, in line with the consensus. But the details defied expectations; the number of employed people rose by a sharp 180,000, its strongest in two years, and helped push the employment rate to another record high of 76.5%. Adding to the good news, unemployment fell while inactivity plunged. On the wage front, however, the news wasn’t as rosy. Headline nominal pay growth fell to 2.9% y/y from 3.2%, while regular pay growth slowed to 3.2% from 3.4%.
Why do wages rise? Because people wish to employ more labour but there’s no more unused labour out there to employ. Thus it must be tempted from current employment by better offers.
So, if the extra desired labour can be tempted away from doing nothing then wages won’t rise even as employment does, right?