Across the world the pandemic is slowly but surely moving into its next phase. Recovery beckons. As furlough schemes across the U.S. and U.K. are being wound down, restrictions eased or lifted, and workforces moving back up the gears, early signs indicate that older employees are more likely to be casualties of the pandemic aftermath than their younger colleagues. Here at the Human Times we have witnessed an increasing number of stories supporting the growing belief that older workers are disproportionately paying the highest Covid-19 price.
In the U.S., statistics show that for workers 65 and older who were unemployed in June 2021, half have been out of work for more than 46.5 weeks. For all workers, the median length of unemployment was 17.6 weeks. Across the pond in the U.K., in late April 2021, workers over the age of 65 were 40% more likely to be furloughed than workers in their 40s. The number of furloughed workers over the age of 50 was 977,300, compared to 969,700 furloughed workers below the age 30.
What lies behind the trend? One theory is age discrimination is playing a big part. The AARP, an organisation that lobbies for older American employees, in its May 2021 survey found that nearly 80% of workers aged 40 to 65 have experienced age discrimination in the workplace. Meanwhile, the House of Representatives has passed a bill aimed at protecting older Americans in the workforce by making it easier to mount age discrimination suits. Patti Waldmeir, writing in the Financial Times , contends that some U.S employers have begun using Covid-19 as an excuse to get rid of older workers, bringing back younger workers from furlough faster than older ones.
However, there is also a body of evidence that suggests the workers themselves are deciding that retirement or withdrawing from the labor market is the best option open to them. Many have reassessed their finances and other factors and have concluded that they are about as well off retiring as they would be going back to work and soldiering on for a few more years. Most of these workers are never expected to return. A study by three economists, reported in the New York Times, suggests that the pandemic has already precipitated an increase in early retirements. “This phenomenon is widespread across older workers, but it really increases at age 65, when economic incentives play a role,” said Michael Weber, a co-author of the report and a professor at the University of Chicago Booth School of Business, observing that that’s when Medicare eligibility begins, and full Social Security benefits come into view.
Here in the U.K., a study by the Centre for Ageing Better, a charity, and the Learning and Work Institute, a research centre, predict a quarter of a million over-50s in the UK could fall permanently out of work after being made redundant during the pandemic. The research asserts that, because job schemes and recruitment are skewed in favour of younger workers, older staff were far less likely to return to work after a redundancy. Anna Dixon, of the Centre for Ageing Better, said: “Without action, we could see many in their 50s and 60s falling out of the workforce years before their state pension age.” Meanwhile, analysis of official data by jobs site Rest Less suggests women will be hardest hit, with nearly 40,000 aged between 50 and 64 dropping out of the workforce since the pandemic began.
Why do older workers matter to the economy? Rick McGahey, writing in Forbes, points out that they make up a startling high share of the U.S. labor force, and are essential to a full economic recovery. About one out of four workers are aged 54 years old and over and by 2029 their share will grow. He calls for Government to set up an older workers’ bureau. McGahey fears that the market won’t correct these problems. “Continuing age discrimination, skill mismatches with increased technology, inadequate training programs, and a lack of retirement savings all mean older workers remain vulnerable to economic exploitation,” he argues.
Emily Andrews, writing in People Management, addresses the U.K. situation: “It's crucial than that in the months to come, the over-50s facing unemployment aren’t simply left to fend for themselves. Recently, chancellor Rishi Sunak announced £2.9bn to ‘restart’ the careers of people who have fallen out of work with intensive support. This support is badly needed. But we also need to see early intervention with support tailored for the over-50s. Above all, the government must give a consistent and clear message to employers, job coaches and employment support services that the over-50s are as entitled to support as younger workers. Simply allowing a generation of older employees to fall out of work early would be devastating – but it can be prevented with the right support.”
With pension ages rising older people want and/or need to work longer. Employers in turn need their labor, wisdom, and experience. Losing them from a workforce could be a false economy. After all, the average age of a FTSE CEO is 55, according to recruitment company Robert Half. And most of them hope their best years are ahead of them.
As David Bowie famously observed: "Ageing is an extraordinary process whereby you become the person you always should have been." Employers take note. Ignore those golden years at your peril.
Martin Knight, Industry Slice.