What matters is (a) real wages RELATIVE to productivity, and (b) real wage flexibility. Real wage growth may be high but not obstructing employment growth if productivity growth is high. If the question is meant to be whether low real wage growth relative to productivity is good for employment, I would agree under normal circumstances. Wages is the single largest component of marginal costs for most firms. High real wages relative to productivity make firms uncompetitive, has a negative impact on hiring, and makes it difficult for new workers to enter the labour market. The other way of asking the question, is whether wage flexibility is beneficial for employment. In normal times, wage flexibility should be expected to be stabilizing. To the extend that the value of jobs has declined in the recession, low real wage growth therefore should be expected to have been beneficial for employment. It is possible, however, that in deep recessions, the impact of wage flexibility on demand for goods may introduce an amplification mechanism that may dominate. This will depend crucially on whether wages of existing or new jobs are more flexible and the extent to which workers are insured against the adverse effects of job loss.

Britain's problem is low productivity and it has been so for decades. Brexit will probably make this even worse given that there is a risk of comparative advantage in financial services and given the possibility of loss of access to the internal market. To address low productivity, Britain should invest in education, infrastructure and in efficient regulation and institutions. It is hard to believe that policy makers are in a strong position to apply an efficient industrial policy free of concerns about voters and current financial interests and given how strongly parties with vested interests will try to impact on the policies.