Longer working lives are fast becoming a necessity for many households. With the cost of living rising and incomes stagnating, it is essential that the older workforce is supported to stay on the job and the older unemployed to find a new one. However, there are too many barriers still standing in the way of longer working lives, as Resolution Foundation’s new report shows.
The good news is that older employment rates have been rising ever since the end of the disaster that was the Job Release Scheme in the late 1980s. This scheme encouraged older people to retire early in the hope that this would bring down youth unemployment (it didn’t). Employment rates have stagnated since the crash, as they have for all age groups, but on the whole older workers are faring better than in previous recessions.
Women have been a powerful force behind the rise in older employment, with female employment rates for the 50 to 64 group growing by 28 per cent over the last 20 years, compared to just eight per cent for men. However, the fairer sex still has a much lower level of employment and the gender gap remains stubbornly big. These comparatively lower rates for women are one of the main reasons why we fall behind many other OECD countries in terms of older employment. As this chart shows, the UK has a significant employment gap for 50 to 64 year olds compared with better performing countries, such as Iceland, New Zealand and Sweden.
So who makes up this employment gap? Despite their financial need to work, a significant proportion of those older people not in employment are in low-to-middle income households. Unfortunately, this is not because they have moved into a comfortable early retirement, but instead tend to be in poor health or unemployed.
This is a worrying state of affairs because longer working lives are crucial for the low-to-middle income group. The group saves less (including occupational pensions) than those on higher incomes and so has a smaller pot to rely on in retirement. This means it is also less protected from sudden falls in income due to redundancy or unexpected illness. For the unemployed, getting back into work can be difficult and rates of long-term unemployment are high. This leads some of those older people who are unemployed to become discouraged and stop looking for work, moving into retirement without the financial resources to maintain a decent standard of living.
Part of the reason why many low-to-middle income people are falling out the workplace early is they tend to be in low-skilled roles in sectors like education or construction that offer little in the way of flexibility. However, this lack of flexibility comes at a time when workers face increasing demands from outside the workplace. This group is more likely to be caregivers than those on higher incomes, and they are themselves in poorer health. This leaves low-to-middle income people in a difficult position as they try to juggle these increasing demands.
As this week’s Economist noted, there is scope for the older workforce to expand. The increase in the state pension age is a step in the right direction, but without support for older people to stay or move into work, many could be left worse off. There are some clear things we can do to help the older workforce. Better access to flexible working options like condensed hours or seasonal leave will give older people the power to better balance demands. Better support for people in poor health will enable them to manage their illness and stay in the workplace for longer. For those who are unemployed, specialist support should be provided before they become scarred from long-term unemployment or give up looking for a new job. At present, the generic support on offer is geared towards the young and fails to meet the needs of many older unemployed people.
The government’s ambition to extend working lives is an admirable one. But it is not enough to raise state pension ages. The government also has to support older people to stay in the labour market – and that means all older people, not just those with good jobs and good health.
For more, see Unfinished Business: barriers and opportunities for older workers
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Giselle Cory is the author of the report and can be found on Twitter at @gisellecory
So what about the argument that I don’t want a seventy year old surgeon cutting me open, or think that a seventy year old porter should push my bed into another ward, or that on my release I can get a bus driven by a seventy year old driver? Why should it be cost effective for a 70 year old to be earning far higher wages than a 25 year old doing the same work? Why should people working in industries / regions with a higher mortality rate subsidise the better off residents of Tunbridge Wells who are likely to live longer lives? How do you remove the ten year era of unemployed school / university students who can not join the employment “chain” because so few people are retiring? When everyone wanted tax cuts to encourage “free enterprise” were they simply not aware of the state’s responsibilty to the people who finance it? I haven’t noticed any mention of social contracts recently so is it fair to assume that when the state fails to safeguard all it’s citizens then the latter have a moral justification in breaking the law? There is a form of economic reform which will allow people to continue productive employment after their “retirement” but raising the state pension ages will only support lower productivity at one end of the age scale and increased benefit payments at the other.
My experience of people in their late-60s and 70s is that they’re physically exhausted and beginning to lose their mental edge. That’s not true right across the board, but I don’t think there are barriers stopping the lucky few from continuing to work.
The progressive ideal must be to accommodate the majority who want to work less, or not at all. The Government’s ambition isn’t admirable in the slightest and it’s shameful to refer to them ‘supporting’ older people to stay in the labour market – they’re being forced. We must take the ethical line and set ourselves the bold and manageable goal of maintaining a standard of retirement at 65, with full, appropriate state pension. Once that goal has been set, THEN we can look at how to achieve it. Although it seems obvious to me that progressive taxation is the funding source.
Idealism is the basis of progressive society: set the goal, then find the means.