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Older workers make their mark

Stephanie Flanders | 17:49 UK time, Wednesday, 2 March 2011

"You spent all the money - now you're taking our jobs." That is probably not how the Office for National Statistics would like younger workers to react to a press release they put out today, highlighting the rise in the number of over-65s who are still in work. But it's the conclusion that some unemployed school-leavers might draw.

In its release, the ONS trumpets the news that at the end of 2010 there were 870,000 people over 65 in formal employment in the UK. That number has more than doubled since 2001. This age group now makes up 3% of the workforce, up from 1.5% in 2001.

What the statisticians do not spell out is how many new jobs are going to these older workers. The latest figures show total employment in the UK rose by 218,000 over the course of 2010. Over that period, employment among the over-65s rose by 104,000. Put it another way, 3% of the workforce has hoovered up 48% of the new jobs.

We knew that nearly all of that recent job growth was part-time: as I have commented in the past, full-time employment has barely risen at all since the end of the recession. I have also noted the contrasting experience of men and women: men took the brunt of job losses during the downturn, but now they are gaining jobs at a much faster rate than women. But I must admit that I hadn't noticed, until looking through the figures earlier this week, that quite so many new jobs had been going to people over 65.

Some have suggested that this is because older workers are more willing to accept the part-time, lower wage work that is now available. That is probably part of the explanation - after all, many workers in this age group may have other sources of income to buttress their earnings. But the ONS paper shows that this is not the whole story.

Both full-time and part-time work in this age group have risen over the past three years. Some 83% of the over-65s now in work have been continuously employed for more than five years; two-thirds have been with their current employer for more than 10 years.

How should we feel about this phenomenon? I leave that for you to decide. Let me just highlight two possible implications - one positive, the other less so.

The positive lesson to draw is that British people are working later in life. In the long run, that is good news. Other things equal, the more active members of the labour force we have for longer, the faster we can grow, and the easier it will be to get our government borrowing under control.

As I've written in the past, extending our average working lives has a double benefit for the Treasury because it means there is more income tax revenue coming in, and less going out the door in benefits and pensions. Indeed, the fact that labour force participation has been rising among older workers, even at this difficult time, could suggest that the gloomier estimates of the UK's potential growth rate in the next few years could turn out to be wrong. (In case you're wondering, IFS and Barclays Wealth, that means you).

That's the positive news to take from these figures. The darker lesson is that politicians may have to worry, not only about the quantity of jobs created in the next few years, but which parts of the population are getting them.

Economists don't tend to go in for a lot of soul-searching about "McJobs". They usually say it's better for people to be in work than out of it - and leave judgements about the quality of those jobs to others. Nor do they spend much time worrying about the social consequences of young people being out of work (or not in their day job, at any rate). But economists do have to worry about the long-term quality of the UK's labour force - and they should care if young graduates and/or prime-age workers are locked out of the labour market for years at a time. That will reduce our potential growth rate as surely as rising labour force participation increases it.

Youth unemployment has been rising up the political agenda. No-one wants to get into weighing the social benefits of one more 66-year-old staying in work versus a 20-year-old getting his or her first step on the jobs ladder. Naturally, we want both - and if we can't have both, the economist in me says that employers are unlikely to give us a choice between the two.

But even if the economists can duck the issue, politicians may not be so lucky, especially if the contrast in the experience of young and old workers continues to be this stark.

Comments

  • Comment number 1.

    "I often here the turn of phrase – but “there are not enough jobs” to which I typically reply – “there are plenty of jobs – a near infinity of them – just no-one willing to pay the wages for workers to perform those jobs. The UK government is in a unique position that it can always afford to pay those wages and should do so by immediately announcing a Job Guarantee."

    Bill Mitchell

  • Comment number 2.

    If we had full employment on an average wage of £20,000 , would we be better of , in terms of tax take than we are now ?

    The answer is probably not .

    So although you state it is irrelevant to economists , it is actually crucial that during the recovery quality , high paid jobs are created.

  • Comment number 3.

    I'm confused. As the government are now indexing pension uplifts to CPI rather than RPI pensioners in the future are going to be considerably worse off so it is inevitable that where they can many will continue to work. We may see even greater competition for some types of job as a result. Surely it must be the government's intent to see people working for longer else why reduce occupational pension benefits? They certainly cannot have it both ways and unreasonably reduce those pensions values and at the same time bemoan that younger people are not getting working opportunities. Very reminiscent of the push-me-pull-you of Dr. Doolittle fame. Trying to move two different directions at once - and totally uncoordinated thinking. Perhaps this is what a Conservative-Liberal Democrat coalition was always bound to produce?

  • Comment number 4.

    You could also raise the question of certain public jobs retiring on full pension at 50-55 years old, and those people then getting bored and taking up another job so they have a dual income. We'll have a lot more of those soon, as the government seeks to agree to reduce staff they won't be just letting them go, they will agree with the unions early retirement deals. Pushing the cost into the future. Everytime the public work force is increased it creates more people who have to be paid off when the next government wants to cut them.

  • Comment number 5.

    Surely it would be better if older workers took the "McJobs" and school & university leavers get training & apprenticeships in the sort of quality jobs that the UK needs. We cannot go on with vast numbers on or just above mimumu wage for unskilled or semi-skilled jobs. In a world market, we can't compete & we will continue to bounce around from boom to recession because a service-based economy with "free market" labour laws is inherently ore volatile. The Government should be spending money (e.g. the bonus it's getting from additional VAT on petrol) to boost training & encourage further degrees in those aras where we need the skills to re-balance the economy out of finance into R&D, high-tech innovation, etc

  • Comment number 6.

    ONS has a podcast on their YouTube channel on this - http://www.youtube.com/watch?v=qhjR2Toeytg and it shows that of the 870 thousand people aged 65 and over in work, two thirds have been in their employment for over 10 years.

    So it appears that the older workers are staying in the current jobs rather than taking new jobs.

  • Comment number 7.

    Isn't it funny that Government actions often result in "unforseen circumstances"?

    Perhaps we should have a new department which can "consider the possibility of unforseen circumstances"?

    Have you heard the one where the Government should give all 0ver 60 people one million pounds - under certain circumstances.

    First - they must buy a house. If they already own one they must sell it and move.

    Second - they must retire. Or be retired. They must not take another job.

    Third - they must change their car - if they have one.

    If they won't move, change car or retire, they don't get the money.

    If they sell and move, there will be carpets and curtains, paint and paper, cookers and carpets and all that.

    When they retire they will create a vacancy to be filled by a younger person.

    The million pounds each will create a spending bonanza and kick start the economy.

    It would be a good investment for the future!

  • Comment number 8.

    Actually,Stephanie ,the reality is even more cynical than that.
    What I have noticed is that, in the next couple of weeks, before the new Anti-ageism Regulations take effect, many tens of thousands of nearly 65 and over 65 year olds are about to be sacked,with impunity , sometimes with union backing,as it will be cheaper to take on younger ,temporary ,agency-sourced, inexperienced non-incremented ,non-Wheatley-council-terms-of-service-lower-paid staff, and those younger workers not being sacked are getting to keep their ts and cs ......on a trade-off where the oldies are being treated very meanlyand the young are not being given the same benefits.
    So we have a sandwich of laid-off oldies; protected middle-aged; and underpaid ,unpensioned, sickness-absence-unprotected, under-holidayed and temporary young'uns.
    So Age-Discrimuination legislation is actually causing a heck of a lot more age discrimination than there was before the legislation was proposed.!
    Many ,many excellent people are being axed this month and the most uncaring employers of all seem to be in the public sector.

    How very,very Tory !

  • Comment number 9.

    And of course the oldies will not appear on the stats as unemployed!

  • Comment number 10.

    2. At 6:23pm on 02 Mar 2011, hughesz wrote:
    If we had full employment on an average wage of £20,000 , would we be better of , in terms of tax take than we are now ?

    The answer is probably not .
    ---------------------------------------------------------------------
    Well, we could ask: Will the benefits bill be smaller?
    Yes, there would be gains, no UB to be paid but perhaps more IS needed.

    Pension provision would improve - more paying in, more scope for fit over pension age workers to stay in full/part-time work.

    More child care needed. Less NHS care needed. Might be net gain?

    Would it be incentive for marginally healthy on SB to seek part-time work? May be a gain there.

    Some employers might lose out, unable to attract workers.

    Problem that might occur would be wage led inflation: that might, be offset by fiscal measures.

    As ever there would be a balance to be struck between tax take, benefits and IT/CT payable. Chancellors would still have to do some work!

  • Comment number 11.

    7. At 7:25pm on 02 Mar 2011, voiceinthewilderness wrote:
    Isn't it funny that Government actions often result in "unforseen circumstances"?

    Perhaps we should have a new department which can "consider the possibility of unforseen circumstances"?
    ----------------------------------------------------------------
    Ministry or QUANGO?

    If the former, will it replace 'not fit for purpose' HO, 'incompetent' Treasury or 'corrupt' MoD?

    If the latter: were we not planning to save money by scrapping QUANGOS?

    Should not this 'unforseen circumstance' have been foreseen and the QUANGO scrapped before it was created?

  • Comment number 12.

    Young versus old is an unhelpful contention when there are nearly 9 million of working age (currently 16 to 65). Economists could be useful if they could tell us how we can get back to full employment (less than 3% unemployment) where those able to work have a good chance of finding it and where people retire gradually as alternative income comes on stream in later life. Debating whether it is fair for crinklies to have the lion's share of new jobs spectacularly misses the point.

  • Comment number 13.

    7 lacplesis37

    "The Government should be spending money (e.g. the bonus it's getting from additional VAT on petrol) to boost training & encourage further degrees in those aras where we need the skills to re-balance the economy out of finance into R&D, high-tech innovation, etc"

    I agree they should be doing this in normal circumstances. Unfortunately, any extra money coming in needs to go towards financing the massive debt Gordon Brown left for us and our grand children.

  • Comment number 14.

    OUCH. Ageism is alive and well - especially among those imagine they will never be old and face what they despise.

    Yes, old age is unattractive - it's uncomfortable and annoying to look at and care for what may be our future?

    Elderly people, how irritating. They are a drag. They cost so much of my taxes. I will never be old, unattractive or vulnerable - or will I?

    The compassion you deny or destroy today - will be your future - one day.

  • Comment number 15.

    1. At 6:08pm on 02 Mar 2011, EconomicsStudent wrote:
    "I often here the turn of phrase – but “there are not enough jobs” to which I typically reply – “there are plenty of jobs – a near infinity of them – just no-one willing to pay the wages for workers to perform those jobs. The UK government is in a unique position that it can always afford to pay those wages and should do so by immediately announcing a Job Guarantee."

    Bill Mitchell


    I agree with Bill's Job Guarantee - it's an elegant solution. The government needs to go further than JG, and address inadequate provision of jobs in the private sector for those who are long-term unemployed - or for those who have previously sufferred from illness. Both groups being the subject of enormous prejudice by employers.

    Labour had a scheme for rewarding employers who take-on the long term unemployed, but I'm not sure if this government will be continuing that. I would enhance the scheme by having both the unemployed and those on JG accumulate credits as they continue to be unemployed. They offer these to prospective employers who use them to claim back employers NI contributions (or just not to have to pay them). This is in addition to the other rewards in Labour's plan.

    I would also make the government pay the employers NI contributions automatically for anyone who is registered disabled, and those who have recently been ill for over 6 months get additional bonus credits to make them more employable.

    This way, it does not matter what reason someone has for not being employable, just the fact they haven't had a job for a long time, makes them more attractive to employers.

    By also making some bonus credits available to those on JG, it makes JG more attractive compared to JSA - I don't agree with Bill on making JG the only option, as many people on JSA, Income Support etc have actually been wrongly kicked-off Incapacity or ESA, and so have no real choice - they can't work without help, or at least being recognised as having extreme dificulties.

    Kind Regards

  • Comment number 16.

    7 lacplesis37

    "The Government should be spending money (e.g. the bonus it's getting from additional VAT on petrol) to boost training & encourage further degrees in those aras where we need the skills to re-balance the economy out of finance into R&D, high-tech innovation, etc"

    I agree they should be doing this in normal circumstances. Unfortunately, any extra money coming in needs to go towards financing the massive debt Gordon Brown left for us and our grand children.


    The government is the monopoly issuer of the currency - it cannot run out of money, and government cheques don't bounce. Governments issue debt as a matter of convention only - they don't have to. Even when they do they can always pay back those debts just as Japan is doing. They have very low yields on the debt despite having a debt ratio of 200%GDP, and have had no problems repaying these debts, and never will have.

    Kind Regards

  • Comment number 17.

    Thought 1: The move towards part time job creation is interesting, so long as people can access more than one role. It offers hedging, being experienced in one role whilst learning another and even "a change is as good as a rest". But simplification of tax and NI is needed to make it easier to pursue, some people will be part-employed and part-selfemployed in multiple roles. Get rid of NI and add to other employer and employee taxes. THe flexible workers only then need to do one very simple self-assessment per year.

    Thought 2: Why does the tax payer keep the risks for student loans, shouldn't the universites gradually have this to concentrate the minds. We're already seeing finance and tech' companies step up and say they'll pay the fees of new graduate intakes. So if the universities develop skilled people then all works out fine. [I know I am looking at education as purely investment spending and not as consumption spending.]

  • Comment number 18.

    Dr_Doom & lacplesis,

    There are two elements to consider.

    As far a FE and HE are concerned then courses could be changed back to the old sandwich system. After all the majority of courses are no longer really full time!

    However, employers must also be made to live up to their responsibility to actually train employees.

  • Comment number 19.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 20.

    For many older workers the pressure is off in many ways. Mortgage paid, kids are no longer financially dependent, any earnings supplement the pension, no need to build a career etc, so minimum wage in the hardware store suits just fine.

    However, it's very hard for those just starting out, or re training half way through your working life. The extortionate cost of living makes it tough for these groups of people to move on with thier lives, and build a decent future.

    I speak from experience. In my extended family I am one of a few middle aged who have had to take low paid work after losing well paid jobs in financial services and construction for example that we had held for many years.

    When you are 48 and your industry goes down the pan, you can't just settle for a 'McJob' not unless you fancy giving up your 3 bed semi for a bedsit!

    It's even worse for the youngest in the family. A bright, hard working graduate, who was over the moon at landing £6.50 per hour.

    You can't have a recovery without jobs, and I would argue that a meaningful recovery would require access to quality jobs at every stage of your working life up to about 65, when for many a 'McJob' will do fine.

  • Comment number 21.

    #17.Mike3. The government is belatedly wising up to the racket that is student loans. You're a total loser - but you get a place on a Mickey Mouse degree course at Dumbdown University.. The SLC is then obliged to lend you £25,000 or whatever. It was recently disclosed that only 33% of student loans are ever repaid in full, a further 33% are never repaid at all. So - the racket is that the Unis lay on a nice easy course, lots of deadlegs sign up, why should they care if they're never in a position to repay their loans ? And if you're a foreign (EU) student, how is the SLC going to chase you for outsanding debt (another brilliant decision from Brussels or the ECJ). The government has sensibly demanded that Unis publish graduate employment statistics. I predict that if graduates from Dumbdown Uni consistently fail to get a job, the government (or SLC) will have second thoughts about lending money for that degree course. And if the SLC is privatised, as has been proposed, you can bet your boots they'll scrutinise borrowers more carefully. Who else in the UK is legally obliged to lend money without the slightest requirement to query the ability of the borrower to repay. I predict big changes, I predict a contraction of an overblown University sector

  • Comment number 22.

    The main reason of high youth unemployment rate in the UK is that many companies cut down the training costs in recession. Furthermore, education is getting more and more expensive. Young people should avoid unrealistic expectations.

    The future job market will be highly competitive. If you have not already possessed good skills and experience, it will be difficult for you to get a job.

    Therefore, it is advisable for young people set "work experience" as high priority, instead of too concerning about the salary.

  • Comment number 23.

    So basically, you should just give a person a job, wether they're any good at it or not, just because of their young age?
    Older staff have a mass of advantages, can probably afford to cope with reduced hours, are less likely to be 'ill' on a monday, might have been doing the job for ages so dont need training..
    You need to have a mix, the mix only happens in expansion , not contraction, where you are mentoring young people. As lynne said, this is due to cutbacks in training, or frankly cutbacks in staff, you let go the 'chaff' or the cheap to cut, not the person with 20yrs experience/redudancy cost..
    I really can't believe I'm looking back at the YTS thinking 'blimey,it wasnt that bad after all'...

  • Comment number 24.

    #16...The government is the monopoly issuer of the currency - it cannot run out of money, and government cheques don't bounce. Governments issue debt as a matter of convention only - they don't have to.

    Why does this argument keep coming up, it is such nonsense. Although theoretically correct you know full well that if you just make fiat currency out of thin air you devalue the currency. A large part of why we are in the mess we are in is because instead of wiping out bad debt we are filling the black hole with almost free Sterling.

    Who wants to work for a currency that has no value by those who issue it? This is the fundamental reason why we are doomed until the BofE and MPC get sacked and replaced with those who understand macro economics.

  • Comment number 25.

    Young people have been sold a lie. It used to be true, when only 5-10% attended University, that it was pretty much guaranteed to be a route to a promising career.

    Now we have more people getting Photography degrees in the UK than are needed for the photographic industry over the whole of Europe.

    I have lost count of the number of times I have heard employers reporting that they are struggling to find suitable quality of young employees, even though Uni numbers are higher than ever, showing that a degree alone is not sufficient a door opener to better job.

    With such great costs now being undertaken by future graduates, it is essential that more information is known of realistic career and salary prospects before undertaking a degree and so much debt. With high quality statistical information I am sure many would choose a different path, and we would lose the courses and Universities that are simply wasting everyones time and money.

  • Comment number 26.

    Oh I would love a McJob, but I'm too qualified for any of them. Employers don't give me the light of day. Getting work as a scientist these days is proving to be impossible. I don't have the laboratory experience for anything, and the precious few interviews I get I find I'm competing against PhD graduates and those with 5+ more years of experience. I am 29 and terrified that because I spent so long in education that I've become unemployable. Add to this the fact that I've got about 6 months lab experience and no other work experience (other than voluntary,) I'm in a terrible situation.

    I'm in a loop that I simply can't get out of and unless the government -makes- someone employ me somehow, I may very well not see employment my entire life... all because I worked hard at university and studied to be a bioscientist and didn't focus on work experience because back during my earlier degrees it wasn't seen as necessary.

  • Comment number 27.

    @24.jonearle wrote:

    "#16...The government is the monopoly issuer of the currency - it cannot run out of money, and government cheques don't bounce. Governments issue debt as a matter of convention only - they don't have to.

    Why does this argument keep coming up, it is such nonsense. Although theoretically correct you know full well that if you just make fiat currency out of thin air you devalue the currency. "
    -------------------------------------------------------------------------

    It might keep coming up since I think someone on here pointed out a link to the Warren Mosler draft. (I don't know whether it was pointed out in seriousness)

  • Comment number 28.

    @25. jonearle wrote:

    "Now we have more people getting Photography degrees in the UK than are needed for the photographic industry over the whole of Europe."

    --------------------------------------------------------------------------

    There was a 2006 discussion paper from the University of Aarhus that examined,as its title said, 'Risk-Return Trade-Off in Human Capital Investment'. It looked at the case of Masters degrees in a similar way to looking at financial assets and, perhaps unsurprisingly, identified some educations that were efficient and some inefficient. The efficient educations (economics, engineering, medicine ...) could thus be seen as investment goods, the inefficient (humanities, Health&Education) as consumption. It also accounted for ability biases, so Political Science wasn't efficient but was hard to enter, perhaps followed for some other reason ...show-off (my word) ??

    I don't know whether the work has been repeated elsewhere or improved, but you would have thought with this kind of stuff about we'd have a different policy? (see Anselm at 21 and me at 17).

  • Comment number 29.

    Morning Stephanie,
    I understood that you were a budding economist and that this was an economics blog.
    This is the second time that you have had a pop at the older generation, with the first being about baby boomers destroying pensions for the young.
    This really must stop. It is devisive and it inflames the populace.
    Do you really believe what you have written "You spent all the money - now you're taking our jobs" or are you publishing a blog to provoke a reaction?
    With so many topics that you could turn the BBC's economics attention to, I find this really sad.
    As a previous poster stated, you will be old yourself (sooner than you think), what kind of a society do you wish to grow old in?
    One in which you are hated for being old or having a job that someone else could do?

    Unless we have full employment, then all job applicants are fighting for the few positions available. Age has been used by middle-aged personnel managers to discriminate against older workers for many years.
    In some industries (computing) one could be on the scrap-heap at 35 (too old)!
    When you have seen and experienced a bit more of life, then you may come to welcome the experience of older workers.

  • Comment number 30.

    If you were the owner of a business in the current economic climate and required additional workers would you
    1)Employ someone with a proven track record, who got educated when schools were old fashioned and thought it was best to ensure as many pupils as possible could read and write, or
    2)Employ someone with no track record, who got educated recently at an (select institutional name of choice) which thought that its students should not have to learn that life isn't fair, reward requires hard work, and academic excellence isn't progressive and therefore should not be encouraged?
    I know I am generalising, but the question remains.
    The young generation have been horribly let down by the progressive, liberal elites who deemed all should have prizes and education policies that were based on the "lowest common denominator" principle.

  • Comment number 31.

    24. At 00:15am on 03 Mar 2011, jonearle wrote:
    #16...The government is the monopoly issuer of the currency - it cannot run out of money, and government cheques don't bounce. Governments issue debt as a matter of convention only - they don't have to.

    Why does this argument keep coming up, it is such nonsense. Although theoretically correct you know full well that if you just make fiat currency out of thin air you devalue the currency
    ______________________________________________________________

    Why do you think it devalues the currency? Or is it just obvious..?
    The exchange rate is determined by the demand from overseas for our goods and services and our demand for theirs.

    Govt spending is a component of National Income i.e. our output, GDP.
    Up until 2007, our economy was fuelled by private debt. Since then households have been deleveraging quite understandably. This is still going on and will I believe for the next few years.

    While this is happening the Government, by definition, and by definition, i mean the National Income Accounting Identities that even mainstream economists accept, has to step in to fill the output gap or else the economy will shrink along with even more jobs.

    An increase in private savings (deleveraging) = Govt deficit, again by definition. The Govt CHOOSES to finance its deficit by borrowing. Its called the Intertemporal Budget Constraint. It is voluntary. The real purpose of it is to suppress wages so that there is a cheap, supine workforce available and it is put up with because people have been scared into thinking that inflation is the real bogeyman.

    Its called neo-liberalism and its slowly coming to an end.
    Help us to finish it off, once and for all.

  • Comment number 32.

    Stephanie,

    Again you are still wedded to the return of medium term aggregate perpetual growth as you indicated when you said " Other things equal, the more active members of the labour force we have for longer, the faster we can grow, and the easier it will be to get our government borrowing under control."

    I hope you will keep an open mind to the facts and increasing real world indicators that such aggregate real GDP growth is henceforth, without abundant cheap energy and hence food, an impossible dream . Furthermore the policies emerging to try and chase this impossible dream will only cause more inequality and misery for the growing number of poor in the world.

    We need commentators such as you to start thinking the politically incorrect unthinkable and explore some pragmatic best options.

  • Comment number 33.

    "If we had full employment on an average wage of £20,000 , would we be better of , in terms of tax take than we are now ?

    The answer is probably not .

    So although you state it is irrelevant to economists , it is actually crucial that during the recovery quality , high paid jobs are created."

    If you live outside London and don't have a professional qualification £20k is actually pretty good.

  • Comment number 34.

    We have a unique advantage in our younger generations. That is their IT skills.

    Unfortunately, the only job type available in our industry at the moment is manual labouring, because of the influence of China’s successful "cheap labouring" business model.

    However, I have been witnessing the evolution of IT technology. I believe that someday, computers will replace all the human labouring. Our industry should be prepared for the future.

  • Comment number 35.

    If "economicsstudent" really is an economics student ... no no, that can't be true, it's just not possible, I retract my intended comments ...

  • Comment number 36.

    In the past, the majority of IT projects proposed by the older generations were for building up database and for compliance of legislations. They are neither useful for the industry nor for the society.

    Computing can do much more than that.

    I think that our younger generations should focus on the machinery part of IT (hardware).

  • Comment number 37.

    #31. Why do you think it devalues the currency? Or is it just obvious..?
    The exchange rate is determined by the demand from overseas for our goods and services and our demand for theirs.


    So what do you think would happen if everyone in the UK had £10000 just deposited in their bank accounts tomorrow by the government...with money just "issued out of thin air", not added to government debt? Do you not think this would cause a massive drop in the value of Sterling? Clearly it would, and it would have had nothing to do with overseas trade on that day... but simply because we would have made Sterling worth less by not attaching its creation to the real generation of wealth.

    If you look at the primary actions of the government/BofE over the last 3 years you see that it is rooted in making Sterling available almost for free, as if this will rescue the economy. It is as naive as thinking that giving an adrenalin injection to a wounded soldier on the battlefield will actually help him recover from his injuries.


  • Comment number 38.

    Actually I am pleased that more older people are continuing to work. By doing so they will be paying taxes and contributing to the economy which is a positive influence inspite of Stephanie's rather downbeat analysis that they are "stealing" jobs from the young.
    I wondered how bad our youth unemployment is so I looked it up.
    "Perhaps the most disappointing figures was that unemployment for those aged 16 to 24 rose by 66,000 to reach 950,000 which is the highest figure since these figures began in 1992............The numbers for younger people are particularly disappointing but are in fact below the European Union average so it is a wider problem than just the UK."
    http://t.co/FtxSTiB
    Looked at in that perspective it makes the opening paragraph of this article look like hyperbole.

  • Comment number 39.

    "No-one wants to get into weighing the social benefits of one more 66-year-old staying in work versus a 20-year-old getting his or her first step on the jobs ladder"

    What a load of dodo you sometimes write Stephanie!

    This remark suggests that work is seen as something the little people do and is generic and the tasks performed are capable of being performed by anyone. This is a failure at the heart of economics - perceiving work as some mass activity. Consider: you need an operation - do you want someone with education and experience to perform the task or a school leaver. Similarly with plumbers.

    The key to all of this is to look at things differently. Look at the results of work - remuneration. Ask yourself if a city banker should really be paid two hundred times a retired farm labourer. The conclusion must be that economics is rubbish if it creates or condones such an outrageous situation.

    (Continuation of my campaign to first judge governments by how they achieve fairness of outcome by reducing the gap between rich and poor and second for a National Maximum Wage set at a multiple of the National Minimum Wage.)

  • Comment number 40.

    Has anyone considered that the jobs may be being given to the most suited people?
    The older generation have a better level of basic education (remember the 3R's), better manners and social skills, a willingness to work, a wealth of work and life experience, and are used to having jobs for life rather than the current trend for moving on to a new job every 3 - 4 years. Also in many cases they don't expect or need high salaries, just money to make up the pension.
    Previous posters have bemoaned the fact that there are graduates leaving college unable to find work or further training. Is this a case that their original choice of degree course was not compatible for the real workplace? It would be interesting to understand which work areas are creating vacancies and opportunities vs the qualifications that students / graduates are leaving the education system with.
    Finally I was looking round the office, doing a quick mental straw poll of who is working and who is not. To be honest my middle aged and older colleagues have their heads down getting on with it, while all I have heard from the younger ones for the last 45 minutes is what was on TV last night and what they will be doing this weekend. I know it’s not scientific, but it does well for me.

  • Comment number 41.

    Hi Stephanie
    I think you might like to consult organisations like "Age Concern" and U3A about this. I wouldn't mind betting that among the top ten reasons for over 65's working would include:
    1. Many can't afford to stop (insufficient pension savings, think of all those 120% 40+ year mortgages still out there, etc)
    2. Fear of retirement and the loss of identity, social contacts and self-worth

    I am no expert but this whole subject has a lot more to it than an economist's limited set of numbers.

    But as usual you have provoked a good blog.

  • Comment number 42.

    We pay out billions and billions of taxpayers money in unemployment benefits. After giving people a reasonable time to find a cosy comfy new job they like - give the money to the councils - tell the councils to "employ" the unemployed sorting out all the stuff that they currently can't afford to employ people for.... everybody is happy then!! Simples!!

  • Comment number 43.

    I wonder how many of those older workers are forced to continue working into their dotage whether they would have had to, if the younger generation had got off their backsides and worked like they did rather than turning to the "bank of mum & dad" leaving said mum & dad with no savings for their hard earned retirement.

    It's all swings and roundabouts isn't it? But not that much room for anyone to complain.

  • Comment number 44.

    Productivity has increased enormously in the last few centuries. In agriculture, manufacturing, office work and most recently in retailing, technological developments have meant that only a small fraction of the working hours formerly needed, are now required to produce the same quantity of goods or services.

    People are living longer, but longevity is not increasing at anything like the rate at which productivity is increasing. The implication is that people do not need to work for as large a proportion of their lives as once was the case.

    Even before the recession of 2009, it was not easy for some groups of workers, for example the over 50s, to find productive work. As far as the real economy is concerned, it is inevitable that the trend for earlier retirement continues. The government is tilting at windmills when it tries to reverse this trend.

    It is true that finding money to pay people decent pensions is a problem. But it is vital to do so. Otherwise the demand generated by old people for services such as care, which generate a lot of jobs, will decline and make the employment problem even worse.

    There are plenty of people in the UK who have surplus wealth and/or income. The way in which asset bubbles appear and grow, even during a recession, is evidence that this is the case. The government should invent new taxes designed to tap into this money.


  • Comment number 45.

    Re. post 40.
    I think you may find that some of the older, and middle aged workers who looked busy, were writing comments for blogs such as this one.

  • Comment number 46.

    You spent all the money - now you're taking our jobs."
    Wrong!
    Labour spent all the money on a 10 year credit binge.

    5 full time construction jobs + 1 IT job + 4 part time jobs, depend on the 2 tax-paying pensioners in this household getting out of bed at 7 am, 7 days a week, 11 months of the year.

  • Comment number 47.

    - Young people are poorly educated for the workplace and obtain "qualifications" that are poorly regarded by employers;
    - So much is spent on welfare that the tax take is a burden employed people find it hard to bear, hence work longer;
    - Employment law makes it a challenge to recruit new employees, as the effect is to take on risk;
    - Equal pay legislation mitigates against employing young women;
    - Bureaucratic burden reduces profits and therefore makes small firms less able to expand and employ more;
    - Public sector pay has risen so much in the past decade that it has forced up the price of labour to unaffordable levels;
    - I am sure that there are more issues to add to that list....
    ...so who is to blame for all this?

  • Comment number 48.

    37. At 08:56am on 03 Mar 2011, jonearle

    You appear to creating a straw man. Charles will no doubt defend his own point but I don't really see how your argument responds to it.

    L Randall Wray - Understanding Modern Money: The Key to Full Employment And Price Stability is worth a read here for those that have the inclination and the time.

  • Comment number 49.

    It's all about perverse incentives, as I shall explain.
    I've campaigned for more than a decade against Age Discrimination in employment. Moreover, I recall that average age expectancy when I was young was just 67. Nowadays its 78 years. But that's not the end of it.
    Pensioners have never been as well off as we are today - the HMRC shows that pensioners receive 86% of average UK incomes. And we'll get a basic pension increase of 4.6% in April, and we pay less tax and no NIC. We don't usually support children - a very big saving - nor do we pay much for housing either.
    [A few advertisers have woken up to the grey market potential. But most haven't].
    The reason for these munificent benefits - which some pensioners don't like me to advertise - is because nearly every pensioner casts their vote. And young people usually don't. Which is where incentives come in Stephanie. As you know people generally respond to incentives and politicians are people!
    Why should a politician seeking to retain her seat bother with helping non-voters with their jobs when pensioners are so much more influential? It's a no-brainer!

  • Comment number 50.

    Lynn @34 wrote:
    "We have a unique advantage in our younger generations. That is their IT skills."

    Unfortunately not in the slightest.

    Far too many people (including most teachers!) confuse being able to utilise devices and applications, all designed to be user friendly, with having "IT skills". What this has meant is that genuine ability to operate within the technical side of the information economy remains the preserve of a small minority.

    The vast, vast majority of youngsters have no great understanding of IT. Across the population, no larger % of teenagers have an understanding of basic things varying from IP packet switching and HTML5 to basic scripting and regular expressions than compared to my generation. Don't forget many of us in our thirties use grew up with BBC B micros and ZX Spectrums in the 1980s and actually spend appreciable time WRITING computer programmes rather than just 'using apps'.

    Along with many other things, the current approach to 'ICT' in schools is a disaster. In fact, it is so ill conceived that it is doing more harm than good. It lacks depth, delivers no fundamental understand of principles and basically just distract resources from getting pupils to do the basics of being highly numerate and literate and hence able to communication clearly through truly modern mediums such as these blogs rather than by txt spk on their mobiles.

  • Comment number 51.

    The stereotyping on this blog is staggering!

    However it also matches reality. A job is available in the paper, 50 people apply. Some are young, some are old, some are in the middle. There is no requirment to give your date of birth anymore (that would be ageist!!).

    The cv's are reviewed by an existing employee/owner who wants his new team to be competent, motivated, healthy and ready to do the job as soon as possible from day one.

    He picks 6 cv's from these criteria (looking for relevant experience in the main) - straight into the bin goes everyone who has never had a job because they have never proved any of the above so he is unsure of their ability.

    Only when it gets to interview stage does his second prejudice come out about people being too old - he doesn't want someone arriving, training them and then them leaving as they ae retiring; this only pushes his existing problem down the road a couple of years.

    However at this point he only has 6 people to choose from so the odds of being the best candidate are that much higher.

    Sadly the young are going straight in the bin.

  • Comment number 52.

    Since my previous attempt at this post disappeared:

    Four decades ago when Rolls-Royce were on the verge of collapse through problems with the RB211 engine, they called Stanley Hooker and other pensioner engineers out of retirement. It worked; the old men saved the day. Obviously, this was a mistake. They should have used a bunch of work experience kids, let the business go to the wall and there’d be fewer jobs for everyone.

    I’m not just playing the miserable old cynic. The point is that employing older workers isn’t stealing the jobs from the young; it’s making the whole economy bigger and generating more jobs for everyone. Beyond that, from whom are young people going to learn skills if not the old?

  • Comment number 53.

    JONEARLE@37
    "What do you think would have happened if every one had £100000 just deposited in their bank accounts."

    Assuming you mean all Adults over 18 then this would have happened:

    The Wealthy; More Malt Whisky ,Yachts,Fancy Houses,Jaguars sold stimulating the Economy.

    The Middle Class; More Conservatories, Car changes, help for their childrens finances (Uni, Mortgages, etc..)stimulating the Economy.

    Working Class; A once in a Lifetime opportunity to get out of Debt Slavery. Working 40,50,60 hours aweek and still having nothing to show for it at the end. Stimulating the Economy ( other than the rapacious Banks) and being able to afford a treat occassionally.

    The Underclass; Spending on more lager, pit-bulls and satellite dishes thus stimulating the Economy.

    Two years ago the previous Government created £200B at a stroke of the Chancellors pen and THEN GAVE IT TO THE BANKS!

    It should have been put directly into the pockets of the People.

    Then there would have been no Recession/Depression.

    Nor would any of the Banks have gone under - they would have ended up with most of the Money within 3 months anyway due to the massive Economic stimulus within Society.

    This Coalition Government has gone entirely in the wrong direction with its "cuts" nonsense.

    The only thing that needs to be cut are the number of "Politicos" and their phoney-baloney jobs, their outrageous salaries, tax-free expenses and cushy pensions.

    Oh, and on the young/old thing: State Pension retirement rate should have been reduced to 60 yrs for both sexes and not raised as it has been.

    The Oldies must move over and give young people their opportunity in Life

    ( I am 62 and did just that.)

  • Comment number 54.

    #49 leftie,

    " Pensioners have never been as well off as we are today - the HMRC shows that pensioners receive 86% of average UK incomes. And we'll get a basic pension increase of 4.6% in April, and we pay less tax and no NIC. We don't usually support children - a very big saving - nor do we pay much for housing either."

    Oh here we go again with selective presentation of statistics that distort the true picture! I would love to see the basis upon which HMRC make this claim. If you reference to bodies such as Age Concern then they claim that the average pensioner recieves less than 50% of the £26,000 average income. Whilst I will accept that there are a number of wealthy pensioners I still believe that the MAJORITY of pensioners cannot be so described.

  • Comment number 55.

    Some posters argue that the young are to blame for being unemployed. They are to undisciplined and lack respect. They want too much for too little effort. They are not willing to be the model employees required in such a competitive jobs market.
    What they fail to realize that is in order to hold such beliefs you have to ignore the reality of the situation many of the youth find themselves in.

    Unemployment is systematic and endemic in most western countries, especially amongst the young. This is caused by the economic system, which cannot be blamed on those too young to have any real effect on how the nation is managed.

    Also, the old have always looked down on the young, so it is nothing new. Even in the times of Aristotle, the older generations eyed the young with suspicion.

    I personally do not hold it against the older members of society who are forced back into work in order to make ends meet, I just find it strange that so many members of this group find it so easy to look down on those who didn’t have the luck to be born in a period of history when jobs were plentiful. How do the young get the experience wanted from employers if it is impossible to take the first step onto the jobs market? Should this fact be held against them?

    Other posters say that the young should just accept whatever jobs they can get and not be too concerned with salary or conditions. Most young jobseekers will take whatever they can get, as the alternative is being a drain on household finances, this is particularly the case for those from low income families. But what kind of message is this to those starting out in life? You are basically saying tough, we messed up, the economy is trashed but you will have to pay for this through reduced pay, temp and part time contracts and little career prospects. Not exactly inspiring, is it?

    Throughout history people have being willing to sacrifice in the name of a greater good, but the young are now asked to sacrifice for the benefit of very few people. The shareholders, executives and politicians are the main ones to benefit from a reduction in workers’ rights.

    The young are Generation debt. There is no future for them, Just servitude and possible conscription when a major resource war breaks out.

  • Comment number 56.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 57.

    I notice how many people on this blog are upset at people 'having a go' at the oldies, yet in nearly the same breath say how awful the younger generation are! Age discrimination runs both ways.

    How many of you actually know young people, rather than what you think you know of them through the media? I am 24, 18 months out of uni, working full-time getting experience. I work hard for little more than minimum wage as a chemical analyst, which is a fairly high-skill job. However, poorly paid as it is, it is the best I could get out of uni and i am grateful for the experience which will lead me to a better job. Luckily I was not competing with someone older with 40+ years lab experience, because i don't think they would have picked me over them. most 'young people' I know simply want to get a job to get on the ladder.

    Personally I don't expect things handed to me on a plate, but it seems unfair to blame the young, who are simply playing the system they have inherited, rather than looking at why young people are like this. At school they teach you that degree=good job. Teachers aren't supposed to lie to you and by the time you find out it's too late. The problem isn't young people, it is the lack of non-academic options for them. It is easier to get into uni than it is to get an apprenticeship. Leave school with GCSEs and work your way up is a pretty much non-existent option now.

    Young people need to be told that uni isn't always the best option and that good skills=good job, whether you gained those skills through education or work. THAT is the problem. There should be room for everyone who wants or needs to work to do so, it shouldn't be either young or old, it should be BOTH.

  • Comment number 58.

    Two reasons older people are often preferred over young people is they are polite and they can count (surprisingly rare commodities in the non-degree educated young).

    I am not yet retired nor, frankly, at all sure I will be able to afford to do so at 65 or 66. Fortunately, as an electronic design engineer in his mid-50s I get no significant competition from younger engineers because there aren't any. At least none who understand very much about anything that is electronic but isn't digital or cuomputer-related. Twenty years ago I was very worried whether I would be employable after forty with all the bright young things being churned out by the universities at increasing rates.

    I needn't have worried. The number of skilled engineering professionals as been declining so rapidly that almost every one I meet now is over fifty too. Which is very good for me, but not so good for the future of the country and it's technological progress, assuming that the so-called 'service economy' turns out to be the chimera we always felt it to be. Not everything can be built with a microprocessor, and even micros need interfacing to the real world . . .


  • Comment number 59.

    The government should finance large R&D teams of school leavers with a remit to reinvent the wheel.

  • Comment number 60.

    While in "lunchtime" mood, I wondered if Stephanie would like to revisit the glory of her illustrious forebear.

    mushroom humbly offers...

    "Gold, gold, glorious gold,
    Nothing quite like it for soothing the old,
    Don't sell sir, but buy sir! Empty your ISA!
    And work till you die sir for glo-o-o-orious gold"

  • Comment number 61.

    I've not read all the comments so I apologise if this point has already been made, but I think your analysis of the statistics is flawed. You state that "total employment in the UK rose by 218,000 over the course of 2010. Over that period, employment among the over-65s rose by 104,000. Put it another way, 3% of the workforce has hoovered up 48% of the new jobs"
    If employees simply remain in their existing jobs beyond retirment age they are contributing to the 104,000 increase in over-65 employment, but their job is not a new job. You are confusing "jobs" with "employment" in a provocative way when they are not synonymous.

  • Comment number 62.

    Er, or maybe 104,000 people turned 65 and none of the existing over 65's retired. Meaning that all 218,000 new jobs went to younger people...?

    what is it they say about statistics?

  • Comment number 63.

    When the young finally switch off the TV and realise what the current generation has left them.....there will be trouble.

    At the moment they're putting their faith in education - but when they realise what they get for £9k - they're going to be very disappointed.

    It's a time bomb, but like all the other time bombs in our world the sheeple would rather ignore it.

    Ignoring a problem doesn't make it go away - someone should tell the Government that.

    Has anyone filled up their car lately? What about the new electricity bills? Has anyone been watching the food budget?

    The pull of inflation against the drag of joblessness are not compatible - at some point something will break.

  • Comment number 64.

    #53. Two years ago the previous Government created £200B at a stroke of the Chancellors pen and THEN GAVE IT TO THE BANKS!
    It should have been put directly into the pockets of the People.
    Then there would have been no Recession/Depression.


    I agree that the investment side of the banks should have been allowed to fail. There are thousands of very rich people sitting in their yachts right now, who we have bailed out. Just think of people like the billionaire Russian oligarchs who instead of loosing most of their fortune (yet still being left rich) were bailed out at our expense.

    However, I don't agree that it is as simple as just giving everyone money (in one almighty give-away). But, the money saved from the bail out could have been used to rebuild the economy in a sustainable way. It could have supported the younger generation instead of dumping the debt from the older generation on them, and making the costs of Uni education such a burden to the start of their adult lives.

    The younger generation will get their own back though. I am certain that within 10-20 years they will have enough numbers and voting power to push through a massive wealth re-distribution. And they simply will not be prepared to continue to support crazy levels of taxes that are subsidising pensions of the previous generation when they cannot afford to live, let alone save for their own future.

  • Comment number 65.

    I was at a seminar the other day, and the host asked if people there were having trouble recruiting. Almost everyone put their hands up.

    There was a chap from one of the red brick universities there who said if you think you have a problem recruiting graduates, well we have a problem filling places for courses. Basically the supply of students wishing to take engineering degrees has dwindled drastically.

    Why? Maybe its because the courses are hard, or maybe its because engineering is not seen as glamorous by those brought up on X factor and Pop Idle.

  • Comment number 66.

    @ 53.

    Except everyone in low paid work would have then quit their job (even if only temporarily) meaning you wouldn't even be able to go and do your supermarket shopping because nobody would be there to serve you so what use would your £100,000 be then?

    By the way, the McJobs that Stephanie belittles so freely are the same jobs that British (mostly English) people consider to be beneath them and which are then "stolen" by those thieving immigrants...

    I wonder what unemployment figures would look like when you strip out every person who chooses not to work...

  • Comment number 67.

    The statistics would be more meaningful if the employed over 65s were detailed further showing the % who are self employed and a % who are senior technical professionals.

    All the employed over 65s I know fall into these categories, some are the victims of the useless Browns 1997 class motivated private pensions legislation who would have wished to be now retired.

    You are not very flattering to the over 65s Stephanie, many employers prefer the elderly employee to the youngsters for many reasons, not usually salary related as you suggest.

  • Comment number 68.

    The problem is to be exacerbated by the ludicrous change in employment which means that employers will not be able to statutorily retire employees at age 65 years. If the governmrnt had meerly moved this age to say 70 years then maybe it would be ok but to remove it altogether means that staff will end their working lives with a legal process designed to prove that they are no longer competent to do their job. The decline is gradual so they don't see it.
    Not to mention the fact that they are effectively employment bed-blockers!

  • Comment number 69.

    @31. At 05:11am on 03 Mar 2011, EconomicsStudent wrote:

    "24. At 00:15am on 03 Mar 2011, jonearle wrote:
    #16...The government is the monopoly issuer of the currency - it cannot run out of money, and government cheques don't bounce. Governments issue debt as a matter of convention only - they don't have to.

    Why does this argument keep coming up, it is such nonsense. Although theoretically correct you know full well that if you just make fiat currency out of thin air you devalue the currency
    ______________________________________________________________

    Why do you think it devalues the currency? Or is it just obvious..?
    The exchange rate is determined by the demand from overseas for our goods and services and our demand for theirs."

    ------------------------------------------------------------------------


    My usual get out, I'm not an economist so I don't understand. But here is my guess - the exchange rate is determined by the demand for home/foreign currency. So print money -> inflation up (if you believe it) -> demand curve for our home currency shifts left -> lower price. Well I guess that is the short term, long term I'd think the same with rates correlating with PPP.

    (But I am guessing - not old enough to be well educated, nor young enough to be creative.)

  • Comment number 70.

    Money if finite. If you print more each unit is worth less because in essence it represents a share in the UK economy (as valued by the rest of the world).
    This fantasy that you can just keep stimulating the economy without consequences is put about by the left of politics because they feel no need to understand economics. They are only interested in (directed) spending.
    The last 13 years have meant lower wages in the private economy to make up for the ballooning salaries and numbers of the non-productive economy.
    Try to understand that the banking crisis was a CONSEQUENCE of high government borrowings. When the government borrows (from the banks of course), the borrowing CREATES an asset at the bank(s) that the banks are obliged (by their purpose) to loan out multiple times. When too much is loaned out higher risks are taken which eventually (and without fail) leads to first suspicion that "the other guy may not be solvent and able to repay", followed by a reduction in lending, then a race to call in those loans with the inevitability that some/more cannot be called in.
    The "toxic debt" problem was real, but a CONSEQUENCE of too much lending, not the cause of the "Banking Crisis".

  • Comment number 71.

    I think what you will find is that because Gordon Brown decimated the livelihoods of millions of older people with his double whammy of taxing pension contributions and wrecking the economy, more people are HAVING to work beyond the usual retirement age of 65.

    It does not mean that old experienced people are taking the jobs of young inexperienced people. That is being achieved (as it has been doing for decades) by allowing into the country millions of young inexperienced people willing to work for peanuts, thanks to the idiotic and senseless policy of mass immigration that the BBC and others have so enthusiastically endorsed.

  • Comment number 72.

    65. At 1:44pm on 03 Mar 2011, uk_is_toast wrote:
    I was at a seminar the other day, and the host asked if people there were having trouble recruiting. Almost everyone put their hands up.

    There was a chap from one of the red brick universities there who said if you think you have a problem recruiting graduates, well we have a problem filling places for courses. Basically the supply of students wishing to take engineering degrees has dwindled drastically.

    Why? Maybe its because the courses are hard, or maybe its because engineering is not seen as glamorous by those brought up on X factor and Pop Idle.
    /////////////////////////////////////////////////////////////////////////
    Perhaps our obsession with celebrity culture is a facet of this issue, but that is not something solely limited to the young.

    Maybe it’s to do with the fact that throughout their lives they are told that a degree = money and money = worth. When they research this and find that engineers are not that well paid or respected they look at other options?

    Whatever the reason you cannot deny that governments of all colors have passively allowed this situation to occur? It is the older generations who have repeatedly voted these governments into power. It is the older generations who have bred and raised the much denigrated youth.

    You wonder why some of us hold your generations responsible for the mess we are in? It is because without your passive acceptance none of this would have occurred. At least be man enough to take responsibility for your collective part in this.

  • Comment number 73.

    This removal of the retirement age is not good for anyone - old and young alike and its bad for Britain in an ever competitive world. It is not needed and there are far better ways of achieving it's aims which will not be met! No employer will employ a new older person now. To do so is to risk there not being willing to retire which will then cost the employer a great deal to prove that they are no longer suitable. Effectively some staff will see that they can get a golden handshake by refusing to retire but then agreeing to leave while staff with higher morals will leave voluntarily with no cheque. The government has so far failed to explain clearly how an employer is meant to retire someone - inevitably there will be a cost as many businesses already pay "disciplined" staff to leave rather than pay the costs of a tribunal as even if the employee is proved guilty they know that for the employer to go to tribunal there is a few thousand pounds in legal costs which are not recoverable from the employee. Add to this medical checks which will not be cheap either. This will be an awful extra burden on British businesses. It also risks us having more old people in firms who are not as quick as they were or as foreign competition.

    Apprentices - when would a firm employ them - assuming the main reason in the past is to replace older workers. There will be no guarantee that Bob will retire in two years time and then the business faces having to lay off the apprentice. Young people really are hit again by us older generations.

    I currently employ someone over 65 who is excellent at the moment. I have until April 5th to decide whether to retire her. After that date if she does not voluntarily retire I will be faced with a large finacial and management cost.

  • Comment number 74.

    And why do pensioners feel the need to carry on working in various McJobs? Could it be that their pensions, public and private, are increasingly insufficient to provide for their needs?

    And the positive we can draw from this is that it enables the government to raise pensionable age and so pay less and receive more?

    Yet another example of a mainstream economist telling us that Poverty Is Wealth.

  • Comment number 75.

    Stephanie, there is a real paradox here. For some years, commentators have been telling us that older people must be prepared to continue working longer, because otherwise the younger workers will not be able to produce enough wealth to support the pensions and investments of (the increasing proportion of) those who are retired. The older employees have heeded this, and are working to a greater age, and we now find the younger ones cannot get jobs to create that wealth at all.
    I am 61, and could just about afford to retire, but am staying in work for all the well-rehearsed reasons. But should I retire, and perhaps help a younger person fill my post, or should I go on working, so I am not unduly dependent for many years on younger people?
    Perhaps the answer is that the need for all to work longer is a long-term requirement, looking at the next 20 to 50 years, while the problem with young people's unemployment is short-term, and will work itself out? But I would not be sure of that, and maybe the best solution (as argued by others above) is for the older ones to take the "McJobs", and leave the skilled and qualified jobs for the young. But how do we organise that?

  • Comment number 76.

    #65 uk_is_toast

    "Maybe its because the courses are hard, or maybe its because engineering is not seen as glamorous by those brought up on X factor and Pop Idle."

    It would be interesting to know your age?

    Apart from the obvious candidates, I would argue that brain cell for brain cell engineering is no harder a degree than many many others. I will however accept that we all consider that our chosen courses requires an innate ability over and above that required by other courses.

    Perhaps you have to look at the UK economy to find an answer. Where are the engineering jobs?; how secure are those jobs?; how well paid are those jobs? Then ask yourself if you were 16+ would you (assuming that you are an engineer) make the same career choice?

    In some respects, engineers are partly responsible for their own plight. They never managed to differentiate themselves and identify the value of their skill. After all the man who services my car calls himself an engineer. They also had a great capacity to form hierachies within organisations - look at BT and the nuclear industry and even the marine services where 1st Engineers only talked to 1st Engineers and 3rd Engineers made the tea (probably meant that only 2nd engineers did any work - but don't try and tell that to the foremen in any large scale operating plant!).

    In #58 Cassandra bemoans the fact that students these days follow a more digital, computer related bent. Perhaps because this is where they are led to believe the future lies and therefore their best hope of employment.

    The capability of our children has not diminished (even if they are failed by the system). The talent is there but the industry and the professional bodies mst look to themselves to actually sell the opportunities to them - oh and for the employers to provide secure long term jobs with prospects.

  • Comment number 77.

    The reality is that there are simply not enough jobs to go round, Mac jobs or mortgage paying jobs, there are not enough. Can we have any faith in the governments belief that the private sector will hoover up the unemployed when, eventually, the economy improves? We are talking about all the unemployed plus all those the government want to get off of invalidity benefits and into work and allow for older people working on beyond state pension age (A large number of them)plus all those being thrown out of the public sector. The total number of "New Jobs" required may well be in excess of four million. When, even in a boom, have we ever had that many jobs ?

  • Comment number 78.

    I’ve noted some comments regarding what the government should, or shouldn’t do.

    In reality the government can’t really do much.
    And it can’t really do much because it has precious little control over the economy.
    And that’s because it has little, if any control over the money supply.

    So hapless Messrs Cameron, Clegg and Osborne, are presumably now finding themselves in the unenviable position of being able to do sweet sod all.

    If you’ve no control over the money supply and debt, you’ve no control over the economy.

  • Comment number 79.

    A couple of points if I may in the 90's and early noughties it was the young (most often humanities, media or art graduates working with the techy IT programmers) that drove forward the internet industry in this country. Most of us "media studies" students are in gainful well paid employment. However I do know how hard it is to be given an opportunity and today you are expected to work for free for long periods of time to get the experience needed for someone to give you a chance.

    There are many employers which will only recruit graduates, they don't care what your degree is just that you have one.

    I am sure everyone can see with their own eyes that the older workforce getting jobs are getting these either with supermarkets and large retail stores where the younger less educated usually female workforce would have previously been employed. As well as with companies and organisations who in trying to be more efficient are far less likely to take on adults of an age who have children of a certain and are far more likely to want felixble working arrangements.

    Finally more so than ever the rump that is left of our industry expects government to produce ready made workers skilled to their needs, or if it does not it will export those jobs abroad. The lack of training and investment in the workforce in the private sector is appalling and we need to do something through the tax system to encourage them to take on the young and train them.

    As to the engineers issue, the issue here is the teaching of maths in school and the pay of the teachers and methods used for teaching the subject in a way that the kids can understand

  • Comment number 80.

    #67 Geoff Berry & #71, sandy_winder

    If you want to really understand why private pensions are not making the returns that were promised, you only need to look at the City itself. Ask yourself why the pension providers are going to milk over 50% of the value throughout the life of the pension in management fees and charges - let alone YOU having to take 100% of the risk of THEIR investment decisions.

    I'm no supporter of Gordon Brown but I do take exception to him being labled as being class motivated in his decision to change the legislation. Did only middle- upper class people have private pensions? Were not the higher level contributors to private pensions also using the loopholes in the legislation to avoid tax? Now you can cticise him for many things but lableing this move as class motivated is just plain wrong.

  • Comment number 81.

    So. The pensioners have "Spent All the Money" have they? What they have spent is what that have earnt. We are talking about the generation that fought the Second World War, endured rationing and built this country up again from the wreck that it was after two world wars. On the way they paid outrageous levels of umpteen taxes, did not live on benefits and endured one incompetent government after another do their best to squander it all. No. It is the younger generations who have spent the money, mortgaging their own future with card card borrowing and endless unearned benefits. The older generation are far less likely to be in debt and relying on benefits. Little harm can come from spending what you earn, it comes from spending what you have not earnt - and it is clear who is resposible for that. It is both dishonest and disgraceful to blame pensioners for the profligacy of the "Live in debt and claim benefits" generations.

  • Comment number 82.

    What would be interesting would be to see income profiles for various age groups. It would be no surprise to see that in the 50 - 60 age group there are more high earners than in the 20 - 30 age group. But if we look at this disparity over time and look at the change in disparity within age groups over time we might find some startling evidence that affects social cohesion.

    As a teacher one of mantras was, "Work hard at school, pass your exams and you will get a well paid job." Whilst it was true when I started teaching in the early '70s, it became an untruth. Most parents will have said the same thing to their children. The result is a generation who trusted their parents and their teachers and found that what they had been promised did not come to pass. Even though there was no intention to deceive, the 16 -25 age group must feel resentment.

    Stephanie has shown where the fault lies. It is with the economists who were (are) interested in global statistics. The Tories won the 1979 election on the bais of Unemployment figures. These tell us what is happening to PEOPLE. The last election was fought on a mystifying array of figures GDP, PSBR etc these are important pieces of information for those who are involved in running the country, BUT they are not about PEOPLE. Using a simple analogy - focussing on how much money is spent on the railways may be imprortant, but the main focus should be how fast do the trains go and are they are time?

    When did we stop being a country of people and became an economy?

  • Comment number 83.

    It does rather seem to me as if this whole one generation against another argument verges on sophistry.

    The jobs one is no less an argumentative sleight-of-hand than the notion that debts built up now are a burden on a future generation. Just as for every sale there is a buyer, so for every debt there is a lender who, surprise surprise, expects repayment, with interest, in the future.

    At this time, this generation if you will, borrowers gain from what they can do with loans. Lenders lose the money they have loaned. In the future, the next generation so to speak, borrowers lose in that they have to pay back their loans but lenders gain because they get their money back, with interest. There is no generational transfer of debt - just a constant flow of loans and repayments back and forth between borrowers and lenders.

    Some of the young generation today will, no doubt, grow up and become investment bankers and stockholders reaping the benefts of debt incurred today. However, there is a spatial element to this that could be problematic. This would be the case if, as a country, a large share of our debt was held by overseas lenders. Future generations in this country would then be burdened with paying back loans without the gain of receiving those repayments...Mind you, despite the colossal public debt of this country after the Second World War and throughout the 50s and 60s, with much owed to America, this didn't stop the so called 'baby boomer' generation, who are now routinely blamed for inflicting economic misery on the current young generation, from thriving.

    There is something of a paradox in arguing that the large public debt of today is a problem for future generations when the economic success, high standard of living and so on, of the 'baby boomer' generation was itself the progeny of large scale public debt. One suspects that the whole transfer of debt from one generation to another argument is obfuscating the real issue: that whatever debt you have the key thing is to invest wisely for the long term future of the economy, the country and future generations.

  • Comment number 84.

    In response to a couple of previous posts.
    I don't think anyone is blaming the young for their plight. As Elmochemist points out it (in post 57) is the system that has let them down. More specifically an Education system which doesn't educate ALL pupils to a high enough level in the basics and which subsequently sends them out from school ill prepared for a working life. Things were somewhat better when I left school, but only in as much as there were sufficient jobs available to apply for. In years gone by you would apply for 4 or 5 jobs and have a real chance of getting one of them, nowadays with so many people chasing so few jobs this luxury has disappeared.
    Also there wasn't a blind obsession that getting a degree will pave the way to riches. Yes getting a good relevant degree gives you a much better chance of getting a good job, but all too often the degrees are neither good or relevant. Obviously there are many examples where students have acheived well, and completed a good education, but there are many others who for whatever reason have not.
    So I think anyone is blaming the young, just telling it as we see it.

  • Comment number 85.

    @77

    Spot on. We wouldn't be having this discussion if unemployment was, say, at 3% or lower. The Tories aim is clearly to creat MORE unempolyment in order to realise their "American Dream" of neo-liberalism and wealth re-distribution upwards.

  • Comment number 86.

    3 Points that are perfectly clear today....

    1) Older workers are probably earning more now than they have ever earned, so why would they retire if not forced to.
    2) Our manufacturing industries have been exported to China etc. because of cheap labour costs there, and as a result many consumer items in the shops have been manufactured abroad and are relatively cheap.
    3) On the other hand the jobs that could not be exported abroad are the very ones that are now very expensive in the UK...e.g. plumbers joiners kitchen fitters electricians doctors dentists etc....so if one wants something done in one's house, it will cost dear because of home grown labour costs.
    Labour costs in the UK are horrendous and there doesn't seem a way around that except immigrant labour...cheaper tradesmen, professionals etc....But they will not be allowed to do this....Only at the bottom end of the labour force where they are cheaper anyway, are they being allowed.

    The analogy of exporting maunfacturing jobs to China to cut labour costs is to import jobs to the UK to cut service sector labour costs in the UK.
    Things are not value for money any longer in the UK....House prices + home grown labour costs have seen to that...it's called rip off Britain.

    So if you are a pensioner on fixed income or a younger person in the UK, you will suffer at the hands of these expensive home grown employees, who will cling to their nice jobs for as long as possible.

    Our society is at risk of division between the people with well paid jobs and those who haven't got a decent job.
    Can the UK continue with this division between higher wage earners and high levels of unemployment...

    Better to share out the work and keep everyone between 16 and 60 employed....This would lead to a more fairer society....

    Retirement age 60 please.

  • Comment number 87.

    81. At 4:04pm on 03 Mar 2011, johval wrote:
    So. The pensioners have "Spent All the Money" have they? What they have spent is what that have earnt. We are talking about the generation that fought the Second World War, endured rationing and built this country up again from the wreck that it was after two world wars. On the way they paid outrageous levels of umpteen taxes, did not live on benefits and endured one incompetent government after another do their best to squander it all. No. It is the younger generations who have spent the money, mortgaging their own future with card card borrowing and endless unearned benefits. The older generation are far less likely to be in debt and relying on benefits. Little harm can come from spending what you earn, it comes from spending what you have not earnt - and it is clear who is resposible for that. It is both dishonest and disgraceful to blame pensioners for the profligacy of the "Live in debt and claim benefits" generations
    /////////////////////////////////////////////////////////////////////////
    So all of those who didn’t fight in the 2nd world war either live in debt or claim benefits? You cannot deny this is a bit of a skewered viewpoint.

    To be fair, those who actually fought in that war are a minority amongst today’s pensioners and I am very doubtful that you will find anyone blaming them. Even the more bloody minded of us are willing to allow those who truly understand sacrifice to enjoy the fruits of their labor and their retirement. But what about everyone else who didn’t fight? Either was too young at the time or was born after this period. Do they hold no responsibility to today’s young for the state of the country? If not, why not?

    We have inherited a broken legacy. One of systematic unemployment, low pay, high costs, increasing commoditization of everything from education to medical treatment (just wait for this). The opportunities afforded to our ancestors are now being denied to us. Where is the wisdom in all of this?

    I am reminded of an old saying -

    "The wisdom of age should fear the strength of youth"

    Pity it has to be one or the other rather than both. But most of our elders are too concerned with self interest to spare a thought for the plight of the youth. Then they wonder why the youth are self interested and have no time for them. A never ending cycle of ignorance and despair from all parties. Its a real pity....



  • Comment number 88.

    Foredeckdave @80

    Take exception to my Brown definition, that is your choice.

    In July 1997, Brown was advised of the long term effects of his class motivated legislation by almost everyone in the pensions industry, members of Labour Party Executive Committee, senior memebers of the Labour Party and many Trade Union Leaders of the time.

    The utterly useless 'I know best' Brown ignored everyone.

    He never had the intelligence or concern to realise that millions of ordinary lower paid workers in public service occupations, many just ordinary trade unionists, like the Railways, the Post Office etc etc would also be affected as he targeted the middle class semi and professional occupations to satisfy his ego-driven prejudices.

    We are really speaking the same you and I on this matter, Brown stuck it up the noses of millions of ordinary workers as he aimed punches at others, and only in that sense could my arguments hold to be possibly classless.

    The pension funds deficits of many large pubic service employers has led to the attempts to sell them off, thanks to Brown alone, a pension for many ordinary workers is a thing of the past when it was the raison d'etre for 40 years of dull and low paid employment for many decent hard working family breadwinners.

    I take nothing back.

  • Comment number 89.

    I am not young or old (being in my mid 30's) but despite having worked hard for 15 years I still can't get a job. I see my parents who are working into their 60's (despite my mum having a sexist option of retiring 5 years younger than my dad) in full time work having to support me financialy whilst getting state pensions and occupational pensions. They voted for governments who have successively reduced my working conditions so that I am applying for jobs where I am expected to work 60 hours a week for £14k pa. they voted for governments who make students pay for their degrees when they got them for free.

    I am fed up of old people sympatheticaly telling me they feel sorry for people my age cos life is not as good for us. Well you have made it so by. Don't be suprised when young people are annoyed that the ladder has been drawn up before we got a foot on the lowest rung......

  • Comment number 90.

    With people having to retire later and underperforming pension schemes not being enough to fund retirement (unless you're lucky enough to be retiring from leading a bank to failure), its hardly surprising more older people are opting to continue working.

    Now we are saying pensioners are taking young people's jobs. First its was immigrants, now it's old people?

    How about an article about how many young people's jobs a bankster's bonus could pay for?

    Divide and conquer by the capitalist classes perhaps?

  • Comment number 91.

    @79. At 3:37pm on 03 Mar 2011, Baz Rutter wrote:

    "There are many employers which will only recruit graduates, they don't care what your degree is just that you have one."

    -------------------------------------------------------------------------
    Heresay I know this but, I was once told that this was not for the graduate skills it was to evidence that the students had stuck to something for 2 to 4 years - sticking to it despite not liking it and saying so in interview is evidence of not being Gen Y! Could just be gossip.
    -------------------------------------------------------------------------

    @79. At 3:37pm on 03 Mar 2011, Baz Rutter wrote:

    "As well as with companies and organisations who in trying to be more efficient are far less likely to take on adults of an age who have children of a certain and are far more likely to want felixble working arrangements."

    ------------------------------------------------------------------------

    Past breeding age, now that is an intersting point.
    -------------------------------------------------------------------------
    @79. At 3:37pm on 03 Mar 2011, Baz Rutter wrote:

    "Finally more so than ever the rump that is left of our industry expects government to produce ready made workers skilled to their needs"
    -------------------------------------------------------------------------

    See my posts 17 & 28

    ------------------------------------------------------------------------
    @79. At 3:37pm on 03 Mar 2011, Baz Rutter wrote:

    "As to the engineers issue, the issue here is the teaching of maths in school and the pay of the teachers and methods used for teaching the subject in a way that the kids can understand"
    -------------------------------------------------------------------------

    I wouldn't blame the maths teachers - though there are some who do know their stuff and some who don't. Maths doesn't suit the multisubject timetabling that schools have, I'd suggest limiting subjects early e.g. math, English, sport and only in later school years going for the 10-20 parallel subjects.

  • Comment number 92.

    #89 Workersrighhts - worse than that the very government ministers voting for increasing university fees never had to pay tuition fees. To be honest I'm sure most people never voted for tuition fees. Its one of those soft targets that governments systematically abuse regardless of voters' views.

    Scotland have the right idea on tuition fees. Come the revolution we can just relocate to hollyrood;)

    Now that the government's sold it's sovereignty to big business, presumably the free market means that we can outsource the government altogether.

  • Comment number 93.

    YOU @ 53

    Apologies meant £10000 p. adult. Fat Finger syndrome!

  • Comment number 94.

    This might be a bit contraversial in the circumstances but public sector workers now won't be obliged to retire at 65. So if job cuts do actually occur will they hit the young full timers or keep the older part-timers???

    Also it might be just the experience I had when I briefly worked in the public sector but it was common for people to retire on a full final salary pension at 60 (or 50 for the Police) and to come back the next month in a similar role via a private company. It was accepted practice a bit of a reward for long service, etc.

    I personally experienced one incidence like this where an individual did practically nothing for three years and no one questioned it middle and senior managers let this fellow do what ever he liked and paid him £30k a year. Very nice top up to the pension...!

    On the plus side (for employers anyway)undoubtly some of the older workforce have got a keenly honed range of expertise and can afford to take lower paid / part time work. There has long been the knowledge that we are moving to 50 year careers and the later parts will include part time work / training others and voluntary work for charities and trusts. These sorts of ideas where screened off in the boom years but are now coming back into focus.

  • Comment number 95.

    I'm sure this blog is now dead but it would be nice if older workers could work maybe part time for considerably less after retirement age and bring in an apprentice for the same combined lump salary.

    Their jobs won't be compatible for the most part but they don't need to work together. I think pensionable workers probably would welcome a gradual increase of leisure time while the decrease in salary may offer the opportunity to bring in a young trainee.

  • Comment number 96.

    re #60
    Nice one! :-)

  • Comment number 97.

    Dear Stephanie, Surely we should be focusing on productivity as much as we focus on numbers. Mr Cameron might wish to support entrepreneurs but a greater benefit for the economy would arise from better managers in existing businesses. After all new businesses fail more often than established ones.
    The UK has a great underbelly of miserably run businesses especially those connected to the Government. A study of older managers/employees vs business success would probably show that tax benefits will merely keep these going where a big percentage are badly run and inefficient. This is not good for UK Ltd or jobs for young or old Britons. Yours Donald

 

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