Saga Flash Employment indices – January 2014 bulletin

Wednesday 22 January 2014

Paul Green, Saga’s director of communication said “Today’s reduction in unemployment is great news, and clearly shows that employment is not a zero sum game. Whilst there has been a staggering 33.3% increase in the number of over 50s in work since the start of this parliament, the number of employed over 50s is still far lower than the number of employed 16-49 year olds.

Saga Flash Employment indices – January 2014 bulletin

This clearly demonstrates that the claims from some quarters that older people are ‘job blocking’ which leads to reduced employment opportunities for younger workers is simply not true.  By making the most of the talents that all workers have to offer we gain a workforce that is balanced between fresh ideas and those that have gained a life-long set of values and experiences which has very real benefits to employers and the economy.

However, for the long term unemployed these figures will bring little comfort.  Since the start of this parliament the number of people under the age of 49 in long term unemployment has decreased by 7.9% compared to only a 2% reduction in the number of over 50s in long term unemployment. This clearly shows that if people find themselves out of work as they get older, they find it much harder to get back into employment and find themselves unwillingly stuck in a spiral of long term unemployment.

Great progress is clearly being made, but it’s important that government start to tackle long term unemployment.  By further incentivising employers, possibly by removing employers NI for those recruiting the long-term unemployed, could give those that want to work real prospects of getting a job and pulling themselves out of the ever decreasing spiral of unemployment”.

Key points:

 

  • The UK-wide unemployment rate (for persons aged 16 and over) during September-November 2013 was 7.1%, down 0.6 percentage points on 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 4.2% between the start of this Parliament in May 2010 and September-November 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 three months to May 2010 to 1.066 million over September-November 2013, a very pronounced rise of 33.3% or 266,000 employees.
    • 50-64 has risen from 7.289 million in May 2010 to 7.839 million over September-November 2013, an increase of 7.5% or 550,000 employees.
    • 16-49 has increased by 1.9% or 404,000 employees, from 20.841 million to 21.245 million.  
  • The number of workers who are 50 or older has been rising steadily. At the start of the current Parliament in May 2010 some 8.089 million UK workers were 50 or older. That figure had risen to 8.905 million over the three months to November 2013.
  • Figure 2 illustrates the over 50s’ share of UK employment is continuing to rise. Over the three months to November 2013, we calculate that:
    • 70.5% of all employed people were 49 or younger, down from 71.2% one year previously.
    • 26.0% of all employed people were in the 50-64 age bracket, up from 25.5% one year earlier.
    • 3.5% of all employed people were 65 or older, up from 3.3% 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 September-November 2013, there were 7.839 million employed 50-64-year-olds, versus 7.585 million one year earlier. This compares to 21.245 million employed 16-49-year-olds over September-November 2013, versus 21.148 million over the same period in 2012.
  • Figure 3 shows that economic activity amongst 50-64-year-olds has been gradually trending upward compared to economic activity amongst 18-24-year-olds. The economic activity rate amongst 50-64-year-olds is now slightly higher than that of 18-24-year-olds. Over the three months to November 2013, we calculate that:
    • 71.4% of 50-64-year-olds were economically active.
    • This was just above the 70.9% economic activity rate of people aged 18-24.
    • 85.5% of those in the 25-34 age bracket were economically active.
    • 86.3% of those in the 35-49 age bracket 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: [1]
    • The number of long-term unemployed people aged 49 or younger stood at 2.101 million over the three months to May 2010, the start of the current Parliament – higher than the 1.934 million figure recorded over the three months to November 2013. This represents a 7.9% decline in the number of long-term unemployed persons in this 49 or younger age bracket.
    • By contrast, from the start of the current Parliament to September-November 2013, the number of long-term unemployed people in the 50-64 age bracket has fallen only marginally, from 367,300 to 360,000. This represents a more modest 2.0% decline in the number of long-term unemployed persons in this age bracket.
  • At first glance, this paints an uplifting picture of over 50s’ lot in a labour market which has only just begun to build up steam as the UK economy accelerated. These data suggest that businesses have turned to older workers – perhaps valuing their skills, experience and conscientious attitudes.
  • However, on closer inspection, the data give 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 utility price inflation – may have forced thousands of over 50s to retire later or come out of retirement.[2]
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    Ends

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