Ever since the start of the recession youth unemployment has been public policy enemy number 1. Politicians and commentators of all persuasions warn of a ‘lost generation’ unless action is taken. It’s therefore good news that the number of unemployed 16-24 year olds has fallen below 1 million, with young people accounting for almost the entire fall of 49,000 in total unemployment between July and September as reported yesterday by the Office for National Statistics. Yet while this is the headline news, just as interesting is what is happening at the opposite end of the age-employment spectrum, with the over-50s taking the lion’s share of new jobs.
The number of people in paid work has increased by more than 500,000 in the past year, remarkable for an economy struggling to recover from a double dip recession. But it’s also remarkable that the over-50s account for half this rise. A generation ago older people tended to exit the labour market in their droves in tough times. Now they are flooding in at such a rapid rate that even a big annual rise in employment for this age group cut the number of them unemployed and seeking work by only 15,000.
The trend partly reflects what economists call supply side factors. Some older people aspire to work later in life to make use of their skills and experience, while others have to keep working because anticipated retirement incomes are being squeezed by a combination of low interest rates and stubbornly high price inflation. But older people have taken advantage of demand side factors too. Businesses have of late mostly been hiring part-time or temporary employees and self-employed contract staff. Jobs like these may require experience but generally provide low or time limited incomes. Such jobs can’t generally be filled by inexperienced youths and rarely pay enough to attract people in the prime of their life. But they are often suitable for older people with savings or a retirement income to top up a meagre wage.
This might be taken to suggest that older people have fared relatively well during the recession. However, older people themselves don’t normally take such a sanguine view. Age discrimination in recruitment still remains a big problem for older jobseekers, while many find that the types of jobs that are on offer, though better than nothing, don’t always make proper use of their skills. Moreover, few provide opportunities for further skills development. Despite the rise in employment of older workers, most employer provided training and government provided training support continues to be heavily concentrated on the young.
The risk therefore is that older workers will become ghettoised into marginal jobs which make work in later life a struggle rather than a source of fulfilment. More jobs for older workers might be viewed as good news story given the obvious plight of the young unemployed but we shouldn’t ignore what lies beneath the headline statistics. We need better as well as more work for the over-50s, and in particular put more emphasis on their learning and skills development needs.
John Philpott is Director of The Jobs Economist, an independent consultancy. Between 2000 and 2012 he was Chief Economic Adviser to the Chartered Institute of Personnel and Development (CIPD).