Saga reveals more over 50s in work but long term unemployment still an issue

Wednesday 11 September 2013

The UK-wide unemployment rate (for persons aged 16 and over) during May-July 2013 was 7.7%, noticeably down from 8.1% a year earlier. The contribution of the over 50s to the job market has been steadily rising. The total number of workers in the UK grew by 3.1% between the start of this Parliament in May 2010 and May-July 2013, with employment for the over 50s rising faster than for younger workers.

Saga reveals more over 50s in work but long term unemployment still an issue

 
Saga Flash Employment indices – September 2013 bulletin
Key points:

  • The UK-wide unemployment rate (for persons aged 16 and over) during May-July 2013 was 7.7%, noticeably down from 8.1% a year earlier.[1]

 

  • Figure 1 illustrates that the contribution of the over 50s to the job market has been steadily rising. The total number of workers in the UK grew by 3.1% between the start of this Parliament in May 2010 and May-July 2013, with employment for the over 50s rising faster than for younger workers. Over this time, the number of workers aged:
    • 65 or older has risen from 800,000 in May 2010 to 1.01 million over May-July 2013, a very pronounced rise of 25.8% or 206,000 employees.
    • 50-64 has risen from 7.29 million in May 2010 to 7.72 million over May-July 2013, an increase of 6.0% or 435,000 employees.
    • 49 or younger has increased by just 1.3% or 265,000 employees, from 20.84 million to 21.11 million; this has been slower than for older workers.

 

  • Figure 2 illustrates the over 50s’ share of UK employment is continuing to rise. Over the three months to July 2013, we calculate that:
    • 70.7% of all employed people were 49 or younger, down from 71.4% one year previously.
    • 25.9% of all employed people were in the 50-64 age bracket, up from 25.4% one year earlier.
    • 3.4% of all employed people were 65 or older age bracket, up from 3.2% 12 months before.

 

  • Employment is not a zero-sum game and the over 50s have not been squeezing young people out of the job market. The number of employed over 50s is far lower than the number of employed 16-49-year-olds. Over May-July 2013, there were 7.72 million employed over 50-64-year-olds, versus 7.50 million one year earlier. This compares to 21.11 million employed 16-49-year-olds over May-July 2013, versus 21.10 million over the same period in 2012.

 

  • Figure 3 shows that older workers are more active in the labour than their younger counterparts. Over the three months to July 2013, we calculate that:
    • 63.5% of all people aged 16 or older were economically active.
    •  71.0% of all people in the 50-64 age bracket were economically active.
    • 9.7% of all people aged 65 or older were economically active.

 

  • Figure 4 presents a more troubling finding, suggesting that if older workers become unemployed, they are more likely to get trapped in long-term unemployment than their younger colleagues:
    • The number of long-term unemployed people aged 49 or younger stood at 2.074 million in May 2010, the start of the current Parliament. This was only marginally less than the 2.075 million figure recorded over May-July 2013.
    • Over the same period, the number of long-term unemployed people aged in the 50-64 age bracket has risen from 379,400 to 386,400 – 1.8% or by 7,000 person rise.

 

  • The number of workers who are over 50 has been rising steadily. At the start of the current Parliament in May 2010 some 8.09 million UK workers were 50 or older. That figure had risen to 8.73 million over the three months to July 2013.

 

  • At first glance, this paints an uplifting picture of over 50s’ lot in a challenging job market. Faced with the financial crisis, the Eurozone sovereign debt crisis and austerity budget measures, these data suggest that businesses have turned to older workers – perhaps valuing their skills, experience and conscientious attitudes.

 

  • However, on closer inspection, it gives more cause for concern. Many over 50s may have chosen to continue working, postponing retirement, not because they wanted to, but because economic necessity forced them to. Falling living standards – caused by low interest rates, subdued pension returns and elevated inflation – may have forced thousands of over 50s to retire later or come out of retirement.[2]
     

Figure 1: Growth in number of workers by age group since May 2010

Figure 2: Share of total employment for different UK age groups (per-cent)

  

Figure 3: Economic activity rate for different UK age groups (per-cent)

  

Figure 4: Percentage growth in number of long-term unemployed, since May 2010

 

 

 

Ends

Editors notes:

Source for graphs are ONS/Cebr analysis 

1 A person is classified as economically inactive if they are unemployed and not looking for work. This definition will include: (i) retirees; (ii) all people aged below 16; and (iii) all school, college and university students who are no engaged in part-time/full-time work and who are not looking for such work.
 
2 See: Gustman, Steinmeier and Tabatabai (2010); Goda, Shoven and Slavov (2010) and Banks, Crawford, Crossley, Emmerson (2012).

 

 

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