04.03.11

Hoovering up Old Clichés?

I see that Stephanie Flanders, the BBC’s economics correspondent has some provoking thoughts in her latest blog Older workers make their mark

Making the point that the numbers of 65 + workers in employment is now 870,000, a number which has doubled since 2001, she argues that the over-65s, a mere three per cent of the workforce, have “hoovered up a 48 per cent of new jobs”.

She cannot be serious! By what possible means has she been able to calculate that older workers are taking over the ‘new jobs’ in such numbers? And how are we to identify these ‘new jobs’ when we see them anyway?

Flanders, observing that total employment rose by 218,000 over the course of 2010, while over that period, employment among the over-65s rose by 104,000, presents her case as though it were self evident - all these ‘new jobs’ are going to older workers.

I beg to differ. To start with, a job is a job and whether it is new or not, you can never really pin it down, it becomes part of the aggregate demand for labour. Talking as though ‘new jobs’ could be marked like new born lambs just doesn’t make any sense.

However, I would guess that if we were to look at genuinely new jobs, when McDonalds, Tesco or other big name companies choose to hire a few thousand people in some new store, a relatively tiny number of older people would be found among the lucky appointees.

Older workers tend to stick where they are. The Labour Force Survey shows that 41 per cent of 65+ workers have been with their current employer for 20 years or more. Another 24 per cent have been there for more than ten years. Only 6 per cent of over- 65s have been with their current employer for less than two years. So these are not people who are out there snapping up new jobs in general.

Only 48,200 over-65s are in jobs they began in the last two years. On average that would give us about 24,00 over-65 year olds moving into new jobs in 2010 out of the 218,000 extra jobs created. Some hoovering up operation!

When people carry on working beyond 65 they may be keeping a job going that would disappear if they gave it up. For example, 42.3 per cent of men and 25.5 per cent of women who are over 65 and in work are self employed. Many of these are jobs that would go forever if their existing incumbents were not able to do them.

Hardly any of the self employed took on new jobs; they just carried on with the small businesses they had already created. Some of them swelled the numbers of the 65 + job holders it’s true, but this is because they quite simply had their 65th birthdays and moved into that age category. Things are not always what they seem.

In fact, the experience of older people seeking to find new jobs is tough. Not only are more older (50+) job holders being made redundant than any other group but with nearly 43 per cent of those 50 + who are unemployed being long term unemployed, they have greatest difficulties in getting back to work too.

But as the numbers of people working on beyond 65 has doubled in ten years and this coincides with high youth unemployment, it is not too surprising that we should hear talk of ‘generations in conflict’.

I don’t buy these ideas that the old should stand aside and give young people their chance. Firstly, there is little evidence that younger unemployed people really do blame older people as some commentators seem to be suggesting. (They are more likely to blame the Government, bankers or ‘the system’ in my experience.)

Secondly, jobs in the economy don’t switch around like Chinese checkers in this way  -  vacate one held by an older worker and a younger worker will jump into its place. No, that’s not the way it is. But such misplaced thinking has influenced public policy in the past – with devastating results.

It was the root cause of so many misguided schemes that encouraged older workers to quit the workforce early to make way for the young back in the 1970s. The overall effect was to reduce demand in the economy, throw older workers out of their jobs and help younger workers not one jot.

So we should be pleased to see the increase in working among the over-65s, but we should not be in the slightest complacent about it. Many more would work longer if the flexible jobs and conditions were there to support them.

Talking of ‘hoovers’ and ‘fair shares’ in the jobs market doesn’t help anyone I am afraid. Not younger workers, older workers nor my understanding.