Older Workers: Job Market Opportunities

Lord Davies of Brixton Excerpts

Thursday 3rd March 2022 Grand Committee

[Lord Davies of Brixton (Lab)]

My Lords, I thank the noble Baroness, Lady Altmann, for the opportunity to discuss this important issue. I agree that the central issue here is what we can do to enable older people to choose to stay in work or to return to work.

Over all this discussion, we have the pandemic and what we hope is a move away from it. It has had impacts across our whole social and economic life, not least in its effect on patterns of work for older people. Since the start of the pandemic, we have seen a steep reversal of trends in employment. There had been a consistent increase in employment rates among older workers since the mid-1990s and a fall in inactivity rates, but between 2019 and 2021, the department’s figures for employment show that the rates for 50 to 64 year-olds fell by 2.8 percentage points for men and 3 percentage points for women.

The Institute for Employment Studies has calculated that if pre-Covid-19 trends had continued, there would be almost half a million more older workers in the workforce than we have today. This reversal of the earlier trend clearly comes at a cost for those involved: to individuals who cannot afford to lose either the income or social structure that work provides and to society as a whole, with reduced output of goods and services.

To the extent that this reflects older people choosing of their own wishes to enjoy more leisure, as against income, it can be welcomed but there is little evidence that this is the main or significant driver. The truth is that most of those who have given up employment did not have a choice but were forced out of the labour market through lack of work opportunities, ill-health or family responsibilities. The question, therefore, is what we and the Government can do about it.

In suggesting some policies, I base my remarks in large part on the excellent and timely report from the TUC, published on 23 February, Older Workers after the Pandemic: Creating an Inclusive Labour Market. I urge the Minister to read it, if she has not already done so. The TUC’s report makes it clear that increasing older workers’ participation in the labour market will require major changes in the workplace to ensure that older workers have the skills they need and that jobs and workplaces meet the needs of an ageing workforce. This goes alongside the need to ensure that those who are unable to continue working into their mid-60s are not penalised as a result, which will require an overhaul of working and pension-age benefits.

As pointed out by the TUC, there are class and ethnic dimensions to the challenge we face in offering older people the opportunity to keep working. People in low-paid and manually intensive jobs are at far greater risk of being forced out of the labour market early. Those working with heavy machinery and in elementary occupations such as cleaning or security are particularly vulnerable, closely followed by people in caring and other service occupations, retail and customer service. Together, these occupations account for just three in 10 jobs in the labour market, but almost six in 10 people who leave the labour market come from these sectors. Plans to tackle labour shortages by helping more older people stay in work must tackle the structural discrimination that means workers on lower pay are more likely to be pushed out.

At the same time, while black and other ethnic-minority workers are less likely to retire early than their white counterparts, those who leave the labour market early are significantly more likely to do so because of poor health and more than twice as likely to do so because of caring responsibilities. From an analysis of the Labour Force Survey, the TUC found that just 17% of black and minority-ethnic people between the ages of 50 and 65 who are economically inactive have retired compared with 40% of economically inactive white people, reflecting the wide ethnicity gap in average pension wealth.

So what can we do? First, particularly as we emerge from the pandemic phase of Covid, workplaces must be made safer for all workers through improved health and safety guidance and stronger enforcement. The Government should work with unions and employers to ensure that we address workers and skills shortages and deliver the Government’s stated ambition of a high-wage, high-productivity economy.

Secondly, we need to ensure that older workers have the skills needed to thrive in the labour market by giving them the right to a mid-life career and skills review and to access funded retraining and by providing tailored support for older workers at risk of long-term unemployment or of falling out of the labour market.

Thirdly, we should help older workers to manage disabilities and health conditions by ensuring that employers put in place reasonable adjustments for disabled workers and tackle workplace discrimination and by strengthening flexible working rights to allow older workers to manage workloads.

Finally, we have to look at reforms of the benefits system so that people of all ages who are unable to work can maintain a decent standard of living. We must pay attention in that area, which affects older workers most acutely.