Increasing State Pension Age: black and white…..or grey…?

Conservatives’ plans to raise the state pension age to 66 will make youth unemployment worse leading to a 200,000 rise in unemployment in the first year – many of whom could be young jobseekers. This is the view of Ray Barrell, Director of Macroeconomic Research at the National Institute of Economic and Social Research who made his prediction at this week’s Just Ageing Seminar, hosted by the Equality and Human Rights Commission (EHRC). He supported his case by commenting, “If we extend working lives effectively the people we will have to help in the labour market are not those who are in a job and can stay in it for another year, but those at the other end of the labour market who are looking for a job, and the job that would have come up for them is no longer available.”

Stirring stuff when accompanied by alarmist headlines such as Tory plan to raise pension age will add to youth unemployment (Personnel Today)

But surely it’s not that simple. Not only do young, incoming job seekers not automatically replace outgoing retirees due to lack of similar skills and experience, but not all older workers are going to want to keep working or, if they do, to keep working in the same job. Research has shown that later life career changes are becoming more desirable for older individuals with those who want to work increasingly seeking to do so under their own terms. And for many those terms mean working less and working flexibly. The sooner employers start to address these issues, the sooner we should stop hearing these types of argument which effectively are comparing apples with pears – and ultimately just don’t add up.

Indeed, the Personnel Today article does not reflect a balanced view of proceedings at the Just Ageing Seminar. In particular, Sheila Wild, Head of Earnings and Age Inequalities at EHRC, arguing why the Default Retirement Age should be removed, said “ It is not a contest between older and younger workers, but about ensuring everyone who wants to work has the appropriate skills, whatever their age. The UK Commission for Employment and Skills has predicted 2 million new jobs between now and 2020 – and most of them will demand higher level skills. In securing jobs coming out of recession, skills levels are likely to be the key factor, not age”.

Too old to work

Today, when swearing, sex and medical abnormalities are the stuff of daily entertainment, it’s rare to encounter anything truly shocking on TV. Last night’s Channel 4 Dispatches programme, Too old to work was one of those times.  In a hard-hitting exposé of the appalling increase in the numbers of unemployed over 50s (a 30% increase in the past few months compared to 5% in the 25-49 age group) the programme also demonstrated the outrageous ageism which is rife amongst employers and recruitment agencies which serves  to prevent older workers from securing new  jobs.

Watching the programme was like trying to make sense of some bizarre parody being acted out in a play.  There was evidence aplenty that older individuals are just as effective and efficient in performance terms as their younger counterparts even before their greater experience is taken into account. Indeed the majority of the expert commentators were themselves in their latter years, proof in itself that those with the most knowledge are often older.  Yet the message was that employers see older individuals as being “past it” and lacking in value.

Similarly, on the financial front statistics were presented showing that although we are now all living longer, we are now increasingly being prevented from working longer. Yet the state pension – often all that people will have to rely on for several decades of non-working retirement – has to be funded somehow. So shouldn’t the drive be to keep everyone possible working longer rather than preventing them from doing so?

The government has stated that increasing the labour force participation of the over 50s is a target. This programme unequivocally underlined that it’s time they intervened in this appalling situation and took meaningful action to back up their intentions.

Non-retirement isn’t working

The CIPD reports that according to figures from the Office for National Statistics unemployment among the over-50s rose by 27 per cent over the last quarter, compared with a rise of 8 per cent among those aged 24 to 49. Martin Lishman, Director-General of Age Concern, said that only one in five of the over-50s who lose their jobs are back in work two years later.

Last week the House of Lords expressed support for a campaign by Heyday, a branch of Age Concern, to make fixed retirement ages unlawful. Lishman urged the government to “urgently scrap pointless mandatory retirement ages so people who want and need to continue working can do so”.

If only it was that simple. The majority of the over 50s who are now unemployed are unlikely to be so because of the mandatory retirement age barrier. For a start, many are likely to be far younger. Surely the key issue is why only 20% will have landed a job two years later. Employer resistance to hiring the over 50s? Ageist stereotypes?  Lack of appropriate skills in the over 50s? Lack of confidence? Lack of persistence in applying for jobs in the face of total disinterest and rejection?

Probably a combination of all of these and more.  Mandatory retirement is likely to be low on the list.