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MAGGIE PAGANO: Workers not employers are now in power

MAGGIE PAGANO: Early signs suggest we are seeing a structural reversal in the power away from employers to employees – about time too

  • In the UK, employers in the haulage, food and manufacturing industries are  digging deeper into their wallets 
  • Tesco and Amazon are paying £1,000 bonuses for drivers 
  • Salaries for UK construction workers soared by 6.7 per cent in the past five months 
  • Pay increases like these have not been seen for decades, not since the Sixties 


The latest wheeze to make working life more attractive comes from Citigroup which has ordered its junior bankers working across Europe to take two weeks off in what it calls a ‘fully disconnected’ holiday by the end of September. 

Citigroup has also promised staff a one work-free ‘disconnect’ weekend every month, and a day a week without video conferencing to prevent burnout. They can also buy an extra five days holiday. 

The US giant is not the only international bank searching for ways to retain staff or lure recruits in a fierce war for talent. Employers are seeking better ways to protect workers who have shown how well they performed WFH during the pandemic. 

Increase: Employers around the world and across industry are raising salaries to attract staff

Goldman Sachs is offering graduates starting packages of £100,000 in the UK. The magic circle law firms are paying equally juicy packages for newly qualified lawyers while signing-on bonuses are back. 

It’s not just the high-flying financiers who are more confident about their worth. Employers around the world and across industry are raising salaries to attract staff to meet red-hot consumer demand and to counter labour shortages and supply chain disruptions created by the lockdowns. 

McDdonald’s, Wayfair, Walmart and Starbucks are just a few of the US corporates to have recently upped wages and are now paying a minimum hourly rate of at least $17 (£12.30). CostCo now pays nearly half its staff an hourly rate of $25 while Bank of America has promised an hourly minimum of $25 for all staff by 2025. Nor are these shortages confined to the West. With demand for Chinese goods surging, factory owners are struggling to hire workers.

In the UK, employers in the haulage, food and manufacturing industries are also digging deeper into their wallets: Tesco and Amazon are paying £1,000 bonuses for drivers while even Cornish restaurants are luring bar staff with golden hellos. 

Salaries for UK construction workers soared by 6.7 per cent in the past five months. Wages for driving jobs have risen by 5.7 per cent while manufacturing roles are up 4.8 per cent.

Pay increases like these have not been seen for decades, not since the Sixties. 

For the past four decades, employers have been in the driving seat: migration, globalisation and deregulation has meant an endless supply of cheap – and compliant – workers. By far the biggest reason for this has been migration: over the past 20 years the number of non-UK nationals working in the UK jumped from 1.06m to 3.75m before Brexit. 

As economist Doug McWilliams points out, what is less well-known is that since 1985 the number of over 50s in the workplace has soared by 3.8m. 

But the pandemic may have stopped this: about a fifth of those over 66 have dropped out of work since Covid struck, accentuating the labour shortages we are now witnessing. 

Even our most thoughtful economists are not sure what is behind such a mismatch between supply and demand of labour, and what effect this will have on inflation or productivity and corporate profitability. 

Nor is anyone sure about why the unemployed don’t want to work. 

Some workers are too scared of the virus, others too comfortable living off furlough or able to survive without extra income. 

It’s often difficult to detect seismic shifts in economic history. Yet these early signs do suggest we are seeing a structural reversal in the power away from employers to employees. About time too.

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