We wonder, what does anyone think is going to happen in such circumstances?
Cost of hiring a worker shoots up – but pay packets barely budge
We do understand that the Telegraph doesn't have subeditors any more but really:
Companies are shelling out extra cash to take on more workers, but little of the money is finding its way into wage packets.
Wage costs in the three months to September were up by 2.6pc on the year but other costs of employing workers were up by 6pc, the Office for National Statistics said.
Those other costs include pension contributions, national insurance, sickness payments, maternity and paternity pay and other benefits.
Auto-enrolment pensions are one possible contributor to the rise.
The important number to the employer is "What is the cost of hiring someone?" As a first order approximation they care not how that is divided between wages, taxes upon wages, other parts of total compensation and so on. They're interested in how much it costs to get a warm body in to do the work, that's all.
So, if the costs of doing that rise employers are seeing a rise in employment costs. They might even be entirely willing to pay more to get the workers they want. But if that rise is coming in non-wage compensation then there's no more money left over to raise the wages, is there?
So, why do we have as close as modern times has ever come to full employment, economic growth and little to nothing in the manner of wage rises? Because government is forcing up the non-wage costs of employing someone. Hey, maybe it's even true that this all *should* be happening, perhaps everyone really should be saving for a pension, perhaps the maw of the State needs feeding with more employment taxation.
It is still true though that this is a therefore, not a but. Non-wage costs of employment are rising therefore wages aren't.