Buckle up – milkshake droughts are just the start

We’re not used to modern capitalism being a mess. For something so incredibly complex, it runs incredibly smoothly in normal times. Even those of us who don’t like many of its outcomes, for inequality or the environment, can marvel at how quickly a huge variety of goods and services are available to us almost instantaneously.

Which in part explains the collective trauma as real supply challenges have emerged, with shortages of goods (chickens or anything involving a semi-conductor) and workers (HGV drivers) dominating the headlines.

But when we start turning our complex economies on and off – as we and other countries have had to do during this pandemic to fight the virus – no-one should be surprised that things get messy. It turns out advanced 21^st Century economies are more complex than light bulbs.

This will be true everywhere – from missing McDonalds milkshakes in Great Britain, to a stampede for second-hand cars in the US and German manufacturers desperate for parts.

But it’s fair to say that Britain’s position is unique as our Covid supply issues coincide with the impact of Brexit. That’s particularly clear in our labour market.

Talk of an overall shortage of workers, and firms finding it impossible to hire, is nonsense when there are still over 1.5 million workers on furlough. In fact, workers are being hired at a record rate. Getting millions of people back working after shutting down an economy just takes time.

But there are acute difficulties finding staff in some sectors – such as road haulage and food manufacturing. These are small sectors jobs-wise, but their impact on society is huge once it means a lack of Greggs pasties on the shelves.

Change has been on the cards for these industries for some time. They are amongst those that are used to relying on migrant labour (pre-Covid 15 per cent of large goods vehicle drivers and almost half of those working in food manufacturing were foreign born) but who largely have to cease doing so under post-Brexit changes to migration rules.

Firms have known for years they need to adapt their way of doing business, and it’s fair to say haven’t put their heads in the sand. But what might have taken years, the pandemic means has happened overnight, with a sharp fall in migrant worker numbers as many returned home.

Things happening fast is difficult, for firms and their customers. But it has at least brought the choices we face about how we want parts of our economy to function into the open air.

It is perfectly feasible to have lower levels of migration. The long-run impact will likely be smaller than supporters or opponents of migration claim. But in the context of fairly unappealing jobs – there is a reason why young graduates don’t switch to a career meat-packing on the minimum wage – it will mean higher prices, driven by a combination of higher wages and investment in machines, or simply lower levels of output. If we can’t staff abbatoirs, we can import pork instead.

So, for those of you pining for your MacDonalds milkshake, there is no point pinning the finger of blame at just one of Covid or Brexit. More usefully, spend your time buckling in for a bumpy ride. And deciding what kind of economy we want in future.

This article was originally published in The Observer.