Older workers ‘do not steal jobs from young’
Under 50s would have higher wages and better job prospects if more older people were in work, Government’s older people’s tsar says
Older workers do not steal jobs from young people and wages and job prospects for the under-50s would actually improve if baby boomers were kept in work longer, a study found.
Ros Altmann, the Government’s older workers’ champion, said the idea that older workers took jobs from the young was a “myth”.
In a report commissioned by the Department for Work and Pensions, she said workers over the age of 50 faced “outdated stereotypes, unconscious bias and age discrimination“.
Ageist attitudes were hurting the economy, she said, predicting that an extra £25 billion would be generated if half of the 1.2 million employed or inactive older people seeking work were given jobs.
Rather than reducing the number of roles available to young people, extending British working lives would “better living standards for all of us”, she said.
“One of the most persistent myths I have encountered is that encouraging more older workers in the labour force will take jobs away from the young,” she said.
“On the contrary, the evidence shows keeping more older people in work actually improves employment prospects for younger generations, and has in some cases even increased their wages.
“Older and younger workers are not readily substituted for each other [and] there is not a fixed number of jobs in the economy.”
“The more spending power in the economy, the more jobs can be created.”
Her research showed that as the population ages, the number of people aged 50 to state pension age who were not working would increase from 2.9 million to 5.4 million by 2033 at current employment rates.
Many of the additional 2.5 million people would have “relatively low incomes and inadequate pensions”, she said.
This would “place a rising burden on younger generations”, she said, warning that “immigration alone cannot fill the gap”.
In an outspoken address on the topic last month, Prof Peter Spencer, chief economic adviser to the EY Item Club, said in February that late retirement was “holding back responsibility and remuneration for younger workers and pay in professional and managerial jobs.”
Ms Altmann, a former investment banker and academic at London School of Economics and at Harvard University, provided evidence to the contrary. She said historically, higher employment rates among older workers had benefited younger generations.
Ros Altmann found evidence to dispel the ‘myth’ that older wokers deprived the young
“After the Second World War, the dramatic increase in women’s labour force participation did not mean fewer jobs for men,” she said.
“Instead, it boosted economic growth, and more two-earner families with higher disposable income created new jobs as spending power in the economy increased.”
She contrasted the events with the “job release scheme” in the Seventies, which incentivised early retirement. The scheme was “accompanied by higher unemployment for young people”, she said, and was branded a “spectacular failure” by Age UK.
In France the government from 1971 to 1993 encouraged early retirement, only for employment among both old and young to fall. From 1993 to 2005, more older people stayed in work and youth employment rates in France increased, the report found. The same trend was noted in Germany and China.
“In the Fifties, over 90 per cent of men aged 60 to 64 were working, while it is now around 50 per cent,” Ms Altmann said. “For too long social norms have dictated that once you reach a certain age, you should expect to suddenly stop working. This must change. ”
Steve Webb, the pensions minister, criticised “old-fashioned and outdated perceptions” of older people and called on employers to retain and hire older staff. “From next month, we will be trialling targeted and intensive support for older jobseekers, including rolling out an ‘older workers’ champion scheme across every part of the UK,” he said.
Source: Telegraph UK
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