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The latest ONS statistics show that large numbers of older workers have dropped out of the labour market since the pandemic, while a new report looks at the impact of Covid on economic inactivity and employment.
There are now 550K fewer people aged over 50 in the labour market than before the crisis began – the largest fall over a two year period in at least 30 years, according to analysis of the latest labour market statistics.
The Institute for Employment Studies says this is down to slightly larger falls in participation for older women – down by 290 thousand – than for older men. The IES estimates that there are now 1.1 million fewer people in the labour market overall than there would have been had those pre-crisis trends continued. Three fifths of this gap is explained by fewer older people in work, especially older women, it says.
Other ONS figures show that ‘real’ pay, after adjusting for inflation, continues to fall year on year, for the third month in a row. Overall, real pay is down by 0.7% on this time last year.
IES Director Tony Wilson said: “People shouldn’t be fooled by the fall in headline unemployment in the figures. Unemployment is falling because people are leaving the labour force at a worryingly high rate, with one hundred thousand fewer in the labour market than just three months ago. Older people are leading this exodus…
“With inflation rising, real pay falling and fewer people in work, we need urgent action at the Budget this month to boost employment and earnings, particularly for older people out of work. Employers need to step up too, and make sure that jobs are advertised and designed in ways that are accessible and inclusive for older people. Separate analysis published this week shows that more the vast majority of those older people who have left work are not on state benefits and are relying on their own savings or family to get by. So we also need to ensure that employment support is open to all older people out of work, not just those on Universal Credit or other benefits.”
The report comes amid a new study from the Office for National Staistics which shows how age discrimination is preventing many older workers getting back to work after Covid.
The study, Impact of coronavirus on people aged 50 to 70 years and their employment after the pandemic, looked at employment in the wake of Covid and found that some older people who were put on furlough or made redundant in the pandemic had opted not to return to work afterwards. Some had chosen self-employment and did not want to return to the workforce while others had chosen early retirement.
Some of those who had opted to retire said that age discrimination and difficulty finding a job were among reasons for not returning to work. Others said they were too old to retrain; others were anxious about Covid safety and others had other health reasons. Asked about barriers to returning to work health and a feeling they would be rejected were among reasons given.
Participants said more support with doing online application forms and addressing discrimination would help them to return, but they felt that access to training would not change their minds.
Other issues cited as reasons not to return included caring responsibilities for grandchildren. However, some were concerned about rising costs of living. There was anger among some women about the impact on them of the increase in the retirement age, meaning they had lost several years of their pension or had to delay retirement plans.
Meanwhile, another study by the ONS, Movements out of work for those aged over 50 years since the start of the coronavirus pandemic, found people aged 50 years and over saw the largest increase of economically inactive people among all age groups since the start of the pandemic, following a historical downward trend since records began in 1971.
The number of those aged 50 to 70 years moving from economic activity to inactivity in mid-2021 was 87,000 higher than in the same period in 2019 and was driven by full-time workers, particularly men with a degree or equivalent qualification. Professional occupations saw the largest rise in people leaving the workforce, but caring, leisure and other service occupations also saw a large increase.
Suzanne Noble, Co-director of the Startup School for Seniors, said: “There’s no doubt that the rise we’ve seen in older people choosing to go self-employed has been driven by multiple factors as highlighted in the report, especially around those who have unexpectedly been made redundant or furloughed. While the media tends to report ‘olderpreneurship’ as being an exciting and self-directed choice, our experience running Startup School for Seniors is that it’s primarily driven by external factors such as being unable to gain full-time employment or employment that is flexible around other responsibilities such as caring.”
She added that she is very worried about rising unemployment among older workers. Her organisation has seen a sharp rise in enquiries from over-50s coming from those who are at risk of losing their job or who have been made redundant, although many are motivated by concerns about work life balance and flexibility.
She said: “Many employers see older people as non tech-savvy and surplus to requirements, whereas the reality is they are highly experienced, very motivated and quick to adapt to new technologies.”