Older workers make their mark
"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.