Employment Levels of Older People

Baroness Greengross Excerpts

Thursday 5th March 2015 Grand Committee

Asked by

[Baroness Greengross]

To ask Her Majesty’s Government what is their assessment of the effect on the youth unemployed of a potential increase in the employment levels of older people.

[Baroness Greengross (CB)]

My Lords, I have tabled this debate largely to illuminate the employment challenges faced by the over-50s in our society. I am privileged to head up a think tank, the ILC-UK, or International Longevity Centre, one of 17 around the world. Through it, we try to help people plan for the future in the light of demographic change and look at the challenges, as well as some of the advantages, of our increased longevity.

Recently, the ILC published two new reports called The Missing Million. These illuminate the employment challenges of people who are over 50, demonstrating that, of the 3.3 million economically inactive people aged 50 to 64, approximately 1 million have been made “involuntarily workless”. We know that the plight of people aged 50-plus is worse than that of those aged 60-plus in a country where there has been very important legislation to ban age discrimination for some years. This really is bad and economically stupid.

The ILC research also shows that if people aged 50 and above are helped back into employment, it does not mean that younger people are crowded out of the labour market. Helping older people into the labour market, or back into it, could also lead to a potential £88 billion boost to UK GDP. As we know, these people create jobs in the consumer sector if they are working because they create the need for more things for other people to buy as those people have more money to spend. If they work and are caring for older relatives, grandchildren or even their own children, then other people are employed in caring. They are a boost to the economy, not a drain on it. This is creating more wealth.

We also know that people who are denied access into the labour market through discrimination, or for whatever reason, will tend to disappear into the black market and the black economy. They will do that because very often they need the money and they have some skills. That is the rather sad result of inadequate policies and safeguards to ensure that they can get work.

The Government created a business champion for older workers, Dr Ros Altmann, who argued recently that if everybody retired one year later, it would add 1% to this nation’s GDP. We know that chronological age has now become rather irrelevant; what we are talking about is capacity and the will to work and to contribute to society and in most cases—because we do not force people into scaffolding or something at the age of 50-plus—people who are in work have a better health record, a better social life with mates or friends and feel that they have more self-worth because they are contributing to the nation’s economy and to society at large. I share Ros Altmann’s belief that retirement should be a journey rather than a one-off event. No employer should make an assumption that employees should be on the work scrapheap because they have reached an arbitrary milestone in their lives.

One common argument against greater labour market participation in older age is that it will prevent younger people entering or staying in paid employment because it takes the jobs away from them. We know, however, that that argument is built on the false assumption that there is a fixed number of jobs in an economy—the lump of labour argument. It has been demonstrated over and over again that that is a fallacy: there is no lump of labour. Creating jobs for people creates a market for more jobs. It is nonsense to assume the opposite, but that assumption goes on.

An increasing number of older people in employment can also support employment across all ages. Older and younger people in a job in a firm can work together. You have the experience of someone who knows the history of the company and young people who may have more vibrant or new ideas to introduce. Together, they are stronger than if there is just one age group. That is a good sign in an economy, and it needs to be encouraged.

Saga carried out some research on that, which showed that the extension of people’s working lives has enhanced employment opportunities for people of all age groups, in particular for younger people. Using data spanning about 50 years from 22 countries, some very good OECD research in 2010 found that old and young workers complement each other rather than substitute for one another, so encouraging later retirement will not have an adverse effect on youth employment. At an individual level, there are also potential benefits—earnings gains, pensions saved and improved financial well-being—but there are also benefits to individuals’ health and well-being. There is a reason to get up in the morning. There is a reason to meet your friends, social interaction, having a part in society and feeling that you have self-worth. Those are all excellent things.

It is encouraging that as part of the DWP’s Age Positive initiative, the Government announced in December an older workers’ champion scheme to combat age discrimination offering targeted support for older jobseekers. I welcome that and hope that the Minister will tell us how well it is doing and how we can all encourage it to do more.

Looking at other good examples, everybody in this field has heard of B&Q, because it led the way in employing older people. Barclays recently launched a new apprenticeship scheme for the over-50s who want a career in the City. We know of the success of Teach First. I have been promoting the idea of “mentor later”. We are looking at how we can do something on those lines with older people.

There are many things that one can do. Paid employment is one thing, but there are other opportunities for older people to play a full role in society. As for stimulating youth employment, the best way to achieve that is through targeted measures that will make young people better prospects for employers, such as improved training and supporting the growth agenda. Young people often benefit from mentoring at work from their older colleagues.

The employment of older people does not keep younger people out of the job market. Rather, by the means outlined above, all our adult citizens, irrespective of their age, who want to work should and could be helped not only to fulfil their aspirations but to contribute to the economy at large, our economy, our society and the benefit of us all.