What next for the older workers losing their jobs to coronavirus?
17 Apr 2020
Guest blog: Kim Chaplain, Associate Director for Work, Centre for Ageing Better
During the Covid-19 crisis, we will be opening up our blogs to guest contributors. These blogs are intended to broaden the debate and discussion on how public policy, employers and civil society can respond. Needless to say, the views will be those of the authors themselves rather than of IES. If you’d like to contribute a blog, then please email IES Senior Communications Officer: Steve O'Rourke
About the author
Kim is the Associate Director for the Fulfilling Work Priority Goal at the Centre for Ageing Better. She leads the strategic agenda that challenges employers to think differently about older workers and aims to have 1 million more people aged between 55 and state pension age in fulfilling work by 2022.
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1.4 million people have applied for Universal Credit since lockdown began. Many more are furloughed from companies we now know may be closed for at least two months, with a rising risk of never reopening the longer this goes on. This tells us that – despite the Government’s massive investment in supporting businesses through this crisis a substantial number of people have lost their jobs. The recent IES report estimates that unemployment will rise to around 7.5%.
Right now, we cannot say how these impacts are spread across people of different ages. But we do know that any older workers who have lost their job are likely to face deep and long-lasting consequences, without concerted effort from the Government and employers.
We know that, during the recession which followed the 2008 financial crisis, it was the young who were hit the hardest, as opportunities to join the labour force disappeared. However as the IES report points out, unemployment for older workers nearly doubled in the last recession, and fell more slowly than for other groups. The last recession is also unlikely to be a reliable guide to our current situation. A pandemic is a very different beast to a banking crisis. Looking to an earlier economic crisis, it seems we can draw some parallels with the recession in 1980s.
However, since then much has changed for older workers. Working in a benefit office through that period, I recall benefit claimants over the age of 50 were offered quarterly signing and an orderbook, effectively moving them to early retirement, which was then of course set at aged 60 for women and 65 for men. We thought it was a “win win”, at a stroke this shifted the group off the unemployment count and it was a good outcome for individuals. Despite the best intentions, large numbers of these people felt they had been consigned to a “scrap heap” and written off before their time. Many suffered ill health and went on to claim long term invalidity benefit.
This year we saw the pension age for men and women equalise at 66 and due to rise again to 67 by 2029 fulfilling a long term strategy encouraging fuller and longer working lives. We know that for many people working in a fulfilling role beyond the age of 60 is a good thing both for the individual and for the economy. Before Covid-19 we were likely to have seen a million more older workers in a diverse labour market. What now?
When we consider how we rebuild the labour force we must ensure it is vibrant creative and inclusive. It should represent society as a whole and therefore should include a substantial proportion of older workers, (around 30% to put a figure on it). All too often when we strive to tackle significant shocks in the labour market the temptation is to tackle the unemployed as one massive group and we lose finesse. This could be a disaster for older workers. Unfortunately, unemployment programmes in the UK have never served older workers well and without change they are unlikely to return the number of older workers we need.
In 2019, just a third of over 50s who were made redundant found re-employment within three months: the lowest re-employment rate of any age group. Just 1 in 5 people over 50 who were referred to the Government’s work programme came out with a job: the worst outcomes of any group. A third of over 50s we surveyed last year believed they had been turned down for a job they had applied for because of their age.
The under performance of employment programmes coupled with a drive to protect our older citizens from Covid-19 , which paints them as a group who need to be looked after, rather than a group that can actively contribute, may not bode well for the older worker. It may be that, as we transition from lockdown, older workers are some of the last people to return to the labour market. Will there be any jobs left when they do? Will we be tempted by the solutions of the 1980s and just pension them off?
It’s vital then that as we move forward, we view job seekers in this age group as a valuable resource in the economy and that they get the sort of help they need. We know that Jobcentre Plus has done an enormous about-turn in the last couple of weeks: moving from an organisation that concentrates on getting people into work, to one which is putting all its resources into processing benefit claims as quickly as possible. But when it starts to look like we’re emerging from the other side of this, the Department for Work and Pensions will need to quickly switch gear again – focussing on early intervention to support the newly jobless, so that they don’t become the long-term unemployed. Once they do, tailored support for older jobseekers will be vital, if we want the best chance of getting this group back to work.
We cannot allow a cohort of people in their 50s and 60s to be shuffled out of work before their pension age: leaving them less financially secure both now and in their later life. The potential productivity loss from a spike in early retirements is one that our struggling economy cannot afford. In the months ahead, we will need to see tailored support for older job-seekers, and help for those facing redundancy to re-skill and re-train. Allowing skilled and experienced older workers to drop out of the workforce would be a real blow to the economy – not to mention the hardship facing millions of workers at risk of losing their livelihoods.
Any views expressed are those of the author and not necessarily those of the Institute as a whole.