Should older workers stand aside for the young?

Age and its costs made the news last week as the Peak State penny began to drop. A cross-party group of council leaders from the Local Government Association wrote to David Cameron, Nick Clegg and Ed Miliband warning that parks, libraries and leisure centres might soon have to close to fund councils’ growing elderly care responsibilities. Sir Merrick Cockell, chairman of the Local Government Association, said that the costs of an ageing population kept council chiefs awake at night and that, along with climate change, it was seen as their biggest long-term challenge.

If it’s going to add around 4 percent of GDP to the public sector bill over the next two decades it’s no wonder they are worried. And it’s not surprising that Danny Alexander told public bodies to keep 5 percent of their budgets back for a rainy day.

It is, therefore, likely that people are going to have to keep working beyond what used to be the normal retirement age. Meagre pensions will not pay for 30 year retirements and taxpayers will be reluctant to cover the cost of increased healthcare spending. To avoid the sheet anchor of an ever increasing population of aged poor, people will have to keep working and paying taxes. According to PwC’s estimates, the state pension age will need to rise to seventy by 2046. Many will have no option but to carry on working.

Of course, some people will be unable to work into their sixties but a lot will. People stay fitter for longer now. The hunched old women with shawls around their heads in the Mitchell & Kenyon footage of Edwardian mills were probably only in their forties. Nowadays, fifty is no age. Older people ain’t what they used to be. They are healthier and can do a lot more. Which is just as well because they are going to have to.

But what does that mean for youth unemployment? Will all these oldies carry on working and keep younger people out of jobs? Lucy Kellaway seems to think so. The job-hogging over-50s should retire to make way for younger workers, she wrote on the BBC website.

Which provoked this reaction from the Telegraph’s Daniel Knowles:

The Lump of Labour fallacy is the belief that there is a fixed amount of work available and that, therefore, if some people have more work others will have less of it. Usually, we hear arguments about the Lump of Labour in relation to immigration – whether or not immigrants take the jobs of local workers. The opponents of the Lump of Labour argument claim that more people working leads to more people spending and thus increases the size of the economy. In short, then, immigrants create their own jobs. Recent studies on the impact of immigration seem to support this. It may sound counterintuitive but there is little evidence to suggest that, over the longer term, immigration has had much effect on unemployment.

The same is true of older workers. As the CIPD’s Dianah Worman said:

Recent CIPD labour market analysis has made clear that the notion of there being a “lump” of older labour standing in the way of younger workers finding jobs is a fallacy.

The Institute for Fiscal Studies agrees. After some disdainful comments about “the naïve ‘lump-of-labor fallacy’” it concludes:

When looking at the entire 1968- 2005 period, labor force participation of the old is positively associated with employment of the young. Controlling for the business cycle reduces the magnitude of the correlation but does not alter this positive association.

Overall we find no evidence of long-term crowding-out of younger individuals from the labor market by older workers. The evidence, according to a variety of methods, points always in the direction of an absence of such a relationship.

A recent paper by UCL, Active Ageing: Live Longer and Prosper, claims that, if people work into their sixties and seventies,  the additional spending by the elderly could boost GDP by enough to cover the increased costs of care.

So if all the over 50s quit the workforce, far from opening up jobs for younger people, the removal of their spending power would wreck the economy so thoroughly that unemployment among all age groups would shoot up. Keeping the old folk in work and spending is therefore in everyone’s interests.

That said, Antony Mason of the Intergenerational Foundation sounds a note of caution:

It’s a convincing argument. Get more people working: they earn more, they spend more, they increase demand for goods and services – and jobs.

According to the National Institute of Economic and Social Research, for every year that the working life of employees is extended, the GDP of Britain expands by some £13 billion.

The lump of labour fallacy argument looks particularly good from a distance. With hindsight it may be possible to say that, yes, the labour force expanded, the nation prospered.

But currently the British economy is expanding at a snail’s pace, if at all. Youth unemployment (for 18–24 year olds) stands at over 20% and rising. To a large extent, this is the outcome of the failure of the labour market to adapt to a post-industrial, highly mechanised and automated world, where many of the traditional low-skill, entry-level jobs have vanished.

So today, if businesses cling on to their older members of staff beyond the traditional retirement ages, and if at the same time entry-level jobs are taken up by older workers, this must surely affect the job prospects of the young.

It would seem that, where an economy is expanding, it may be appropriate to debunk the nay-sayers by citing the lump of labour fallacy. But where an economy is shrinking or static, the job market starts to look decidedly lumpy, and letting more people into the job market is unlikely, per se, to be a catalyst for growth.

Perhaps he’s right but if the economy really does flatline on zero growth for years then we are all stuffed, young and old alike.

Calling on older workers to retire and make way for the young might sound like a good idea. It is no way to solve youth unemployment though. As ever, keeping as much of the population as possible economically active is what makes for a prosperous and stable society. If a greater proportion of people are over 65 it makes sense, therefore, for the over 65s to stay in work. Given that people in their sixties are healthier and fitter than in previous generations, that is now possible. The same factors that make people live longer also enable them to work for longer.

If we are to counteract the costs of ageing, more older people will have to carry on working. Far from taking the jobs of the young, the working elderly are more likely to keep spending and creating jobs for the young. Accusing older workers of  job-hogging fits in neatly with the fashionable generational warfare narrative but it is nonsense. If we are to deal with the consequences of an ageing population, that ageing population will have to keep working. And that will be better for all of us.

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27 Responses to Should older workers stand aside for the young?

  1. Pingback: Should older workers stand aside for the young? - Rick - Member Blogs - HR Blogs - HR Space from Personnel Today and Xpert HR

  2. samlizars says:

    Yes! It is nonsense!

    Urgh. Older people are already hugely discriminated against in the work place. And what’s worse, it seems to be the one kind of discrimination which is deemed socially acceptable. It’s horrifically ageist to suggest that one age group has more right to work than another.

    Many of the current over-50s have recently seen their savings and pensions decimated, so what are they supposed to do? Just resign their jobs and go an live quietly in a one bed flat where they won’t bother anyone perhaps.

    Well here’s a thought. Rents are rising at a pace and first time buyers can’t get the deposits together to own a home. Which means that young people are living with their parents longer and longer. What’s going to happen if the over 50s all have to quit their jobs and live off of their decimated savings? We might find we have a generation of 20 year olds with entry level jobs but nowhere to live.

  3. This whole argument also overlooks the point that older people may want to work longer. I can relate to this personally because I enjoy the activity and the social interaction and believe I’m good at what I do. I’m interested in “business” and I know that gives me a breadth of intellectual stimulation and I enjoy passing on my knowledge and experience through mentoring, whenever I get the opportunity. As someone once said, “Youth and talent is no match for age and guile”.

  4. Dave Timoney says:

    The lump of labour fallacy is a straw man that is usually wheeled out to invalidate claims that reductions in working hours or work-sharing are beneficial for labour, even when such claims are not being made. See: http://hussonet.free.fr/lumplab.pdf.

    The issue is not whether older workers stepping aside would free up jobs for the young, but what impact the deferral of retirement will have on vacancies. If an older worker defers retirement by 1 year, that means the resulting vacancy will be deferred by a year as well. During the period of transition to the new retirement age there must be a large number of such deferrals. As many of these would otherwise have created vacancies, there must therefore be a reduction in the total number of potential vacancies, all other things being equal, created during the transition. This is likely to impact disproportionately on new entrants to the labour market, e.g. the young. NB: These deferrals are absolute losses in terms of vacancies in the year. There is no compensating above-trend increase in vacancies after the transition.

    Re “Far from taking the jobs of the young, the working elderly are more likely to keep spending and creating jobs for the young.” This assumes that working people in their early 60s spend at a relatively high rate and then severely reduce their expenditure immediately upon retirement. The evidence suggests that people reduce their expenditure well in advance of retirement, driven as much by lower need (kids gone) as by the looming carriage clock. It is likely that a large percentage of their income in the additional years will be saved rather than spent, as they need to fund the extra years of retirement.

    A final point to bear in mind is that just as longevity is heavily influenced by class, any increase will be disproportionate – i.e. the rich will enjoy more extra years in absolute terms than the poor (see: http://www.guardian.co.uk/society/2009/jul/03/life-expectancy-patterns). The raising of the retirement age, if based on the population’s average longevity, could result in the years spent in retirement actually decreasing for the poorest in society. In other words, the increased “burden” of pensions will mask a continuing transfer of wealth from the poorest to the better-off.

  5. originalsandwichman says:

    I am the author of the paper Dave Timoney cited above (thanks, Dave!). I’ve continued to research the fallacy claim and have traced it back to a 1780 pamphlet written by a Lancashire magistrate. As Dave points out, the fallacy claim is a straw man and always has been.

    The case for shorter hours or for early retirement is NOT based on the assumption of a “fixed amount of work”. It is based on desires for better working conditions, more leisure and the recognition that overwork and cutthroat competition for jobs drives down both productivity and wages. Although the amount of work is not “fixed,” neither is it instantly and infinitely elastic. It is also a fallacy that an increased supply of labor “automatically” creates an increased demand for it. The big difference between the two fallacies is that a great deal of the economics officialdom believes in and promotes the latter falsehood.

  6. rogerh says:

    An elderly friend told me of his industrial workplace in the 1920s – full of old men who had nowhere to go and did practically nothing. Kept on until the ’30s out of some sense of decency. We will end up repeating this scenario with oldies forced to work on when they don’t want to. In the end they will have to be paid off – possibly with a reduced old-age-pension.

    The ‘Lump of Work’ was a fallacy so long as new entrants filled up new jobs created in little weaving shops in East End slums or in manufactories funded by capitalists. Roll forward 200 years and you try setting up a little sweatshop – you will be prevented. As for the manufactory, that went East. Unless new and productive and paid work can be found we will face the ‘Lump of Work’, it will not be a fallacy. Globally the Lump is a fallacy, locally it is a fact.

  7. Graeme says:

    Dave, the deferring retirement will increase spending as people will know they do not have to save for retirment as early. The extra spending will create more vacancies. Claiming deferral will reduce vancies is just a different form of the lump of labour fallacy.

    Roger, why do you claim the lump of labour fallacy only applies if there are jobs in sweatshops, or even only in manufacturing.

    The main impact on young people of deferring retirement is that there are more tax payers, so either taxes will be lower or public spending will be higher.

    • Dave Timoney says:

      Graeme, your assumption that a deferred retirement will lead to an increase in spending, because people don’t start saving as early, can only be true if the individual expects the number of years they will stay in retirement to be constant as a ratio of their earning years – i.e. more years earning (and spending) automatically funds more years in retirement. This in turn assumes that the retirement age is moved back to maintain this constant ratio.

      According to the Office for National Statistics (link below), between 1986 and 2006 the average years in retirement for 65 year old men increased from 13.1 to 16.7. If the retirement age had been increased from 65 to 67 in 2006, a retiree would still be looking at a net increase in his retirement years of 1.6. This means he would have to save more to enjoy the same lifestyle as someone retiring in 1986.

      If we assume that longevity increases at the same absolute rate in future, then we can expect years in retirement to be 20.3 in 2026 and 23.9 in 2046, assuming a retirement age of 65. The proposed changes (increasing to 67 in 2026 and 68 in 2046), will reduce this to 18.7 and 20.9 respectively. Let’s assume a standard number of working years of 45 today (i.e. work continuously from 20 and retire at 65). This gives a ratio in 2006 of 37.1%. The ratio in 2026 will then be 39.8% (18.7/47), and that in 2046 will be 43.5% (20.9/48).

      So, it looks like the amount of saving we will have to do for retirement is still going to increase (assuming longevity continues to rise), despite the increase in the retirement age. For this reason, I don’t think your assumption is correct.

      It could be that there will be a more aggressive increase in the retirement age. Some commentators are already predicting that by 2046 it will need to be 70, not 68. This would produce a ratio of 37.8%, which is close to today’s figure.

      It could also be that the rate of increase in longevity in absolute terms will decline, and that the last 20 years will turn out to have been an historical anomaly, though this does not appear to be the view of the medical community who are predicting that today’s babies will live to 100 on average.

      You should also bear in mind that many pension experts reckon the current rate of savings for many is inadequate, while others reckon that the annuity rates in the decades leading up to 2008 (dependent on the boom in equities and high gilt returns) were the historical anomaly. In future we may get much lower returns, which means we need bigger savings.

      ONS link: http://www.ons.gov.uk/ons/rel/health-ineq/health-inequalities/trends-in-life-expectancy–1982—2006/trends-in-life-expectancy-by-the-national-statistics-socio-economic-classification-1982-2006.pdf

  8. originalsandwichman says:

    The original point of the lump-of-labor fallacy claim was to point out that “it’s not so simple.” That’s true. But what the fallacy claim has become is a bogus platitude that “it’s not THAT simple, it’s THIS simple.”

    That is to say, it exchanges one instance of over-simplification with another. In the grand scheme of things the first-order over-simplification was actually closer to the truth than the “counter-intuitive” second order over simplification. That’s not to say that the amount of work is fixed but that the converse assumption of an “infinite” amount of paid work to be done is patently absurd.

    There is something about the human mind, though, that craves certainty and resists complexity. If something isn’t a definite quantity, it must be an unlimited quantity — we seem to have no tolerance for “…it depends.” It makes no difference that the economists who have actually investigated the fallacy claim have rejected it as itself fallacious. The mere fact that hundreds of economist-parrots have repeated the slogan ad nauseum makes it official.

    • originalsandwichman says:

      To sum up, the fallacy committed by the lump-of-labor fallacy claim is known as a false dilemma, false dichotomy or black and white fallacy. It takes the following form: “either the amount of work is fixed or the delayed retirement of older workers will open up more, not less, jobs for the young. Since the first argument is false, the second argument must be true.” The problem with than line of reasoning is that there are other possibilities.

      “A False Dilemma is a fallacy in which a person uses the following pattern of “reasoning”:
      Either claim X is true or claim Y is true (when X and Y could both be false).
      Claim Y is false.
      Therefore claim X is true.
      “This line of “reasoning” is fallacious because if both claims could be false, then it cannot be inferred that one is true because the other is false.”.

  9. Graeme says:

    Why is an “infinite” amount of paid work absurd? There is always room to do more work: there is always room for increased consumption (and therefore supply). It is conceivable that we may, in some distance future, reach a point of development where everyone has all they need (as in Iaian Banks’ “Culture” novels), until then there will always be more work to be done.

    • originalsandwichman says:

      If you have to ask why an infinite amount of work is absurd, it’s probably going to be very difficult to explain it to you. “Infinity” is not a real number. It’s an abstract concept. Old Malthus explained the difference between infinite and indefinite two centuries ago. The example he gave was the breeding of Leicestershire sheep to have small heads and short legs.

      “Proceeding upon these breeding maxims it is evident, that we might go on till the heads and legs were evanescent quantities; But this is so palpable an absurdity, that we may be quite sure that the premises are not just, and that there really is a limit, though we cannot see it or say exactly where it is. In this case the point of the greatest degree of improvement, or the smallest size of the head and legs may be said to be undefined; But this is very different from unlimited, or from indefinite, in M. Condorcet’s acceptation of the term. Though I may not be able in the present instance to mark the limit at which further improvement will stop, I can very easily mention a point at which it will not arrive. I should not scruple to assert, that were the breeding to continue for ever, the. heads and legs of these sheep would never be so small as the head and legs of a rat.”

      But there is another question that your argument begs, It may well be that there is very much more that people may need or want but that doesn’t matter. What matters is what can pay for and are willing to pay for. In this world, the people who have the needs and the people who have the means to pay are not the same.

      • originalsandwichman says:

        I should have said, “the difference between infinite and undefined.”

      • Graeme says:

        If you read the rest of my comment, you will see that you are wrong about it requiring an infinite amount of work. It merely requires more than available labour can do.

        As for the issue of whether there is more people want, the answer is yes. Very few people have everything they want, and even fewer have everything they would want if it was advertised to them.

      • originalsandwichman says:

        Graeme, you said “there is always room to do more work.” I would take “always more” as being a synonym, even a plain language definition, for infinite. At any rate, the wants of people who don’t have everything they want is beside the point. It is only the wants of people who don’t have everything they want AND CAN PAY FOR MORE that count. That is why it isn’t additional labor supply but CREDIT that creates new labor demand. The role of additional labor supply in the extension of credit is that it offers the prospect of expanded output. It doesn’t actually produce the extra output, though, until it is put to work. Credit relies on people’s guesses about the future. Sometimes those guesses become a self-fulfilling prophecy. And sometimes people guess wrong. The economists’ fable about everything happening automatically “because there is more work to be done than available labour can do” ignores the critical (and sometimes unreliable) role that credit plays coordinating labor supply and labor demand.

    • Dave Timoney says:

      The Culture novels, like any other depiction of a post-scarcity society, are interesting because they raise the question: how would we transition to such a state? Would we all have jobs up until the Friday and then all become freelance artists on the Monday?

      The most credible explanation of how this would work, to my mind, is that the transition will be marked either by the creation of jobs that are disguised consumption (i.e. they produce no commercial value but have a cost – “boondoggling”), or by the sharing of work/leisure across many existing roles, with the share of productive work gradually declining and leisure (disguised as work) increasing in proportion.

      The first can be considered the planned economy approach, the latter the capitalist approach. In the first, certain roles are defined as having only social value. Over time, these roles increase (till they cover most of the population) and mutate, with fewer hours worked and more self-direction. In the second scenario, not all of the worker’s surplus value is taken by capital. This is possible if the increase in overall productivity is sufficiently great to support expanding profits, which implies that the productivity gains of constant capital (through automation etc) are spectacular, which they would be if we were on the way to a genuine post-scarcity society.

      The reality is that this second process would not operate equally across all roles. There would be a class division. Working class jobs would continue to be fully automated, with only hands-on jobs (such as care and other personal services) remaining, while middle class jobs would be maintained by the creation of new roles as old roles are automated, and by the change in work behaviours possible in self-directed jobs.

      An example of the former would the proliferation in marketing jobs over the last 20 years (people employed to tweet), or the creation of new management areas such as CSR. An example of the latter would be the use of email. This has massively increased efficiency in commercial communications, but it has not led to many job losses (other than typing pools – i.e. working class jobs) because clerical and managerial staff now spend so much of their time generating and reading unnecessary emails.

      Ironically, the lump of labour may well be true if limited to middle class occupations.

  10. rogerh says:

    The crucial point is would keeping older workers on longer help or hinder the chances of the young. In a dynamic economy I suppose the more hands to the pump the better – so keeping on older workers is OK. But the economy must be dynamic. But retirement is not being deferred because more hands are needed, oh no – but because the economy is not dynamic enough to support the retirees – hence the lump of labour.

    Currently our main problem is lack of demand. Certainly there is demand in the UK for Ipads and time machines, but the Ipads are made in China and we are not clever enough to make time machines. Haircuts and hookers are hard to export and insurance and finance are easily relocatable. Pretty difficult to make multi-billion dollar foreign exchange exporting services and the income from overseas investments is easily offshored. Mr Osborne has a very big problem and deferring retirement is not going to fix it.

    • Graeme says:

      Given international trade there is no need to produce what you consume. In fact this strengthens the case that this is a lump of labour fallacy as extra workers can be used to increase imports.

      You are wrong that financial services can easily be relocated. They rely on skilled labour that cannot easilly be moved, and are unlikely to be muxh cheaper if moved. Hookers can be exported, and they attract tourism which brings in foreign exchange. The UK does actually export labout in a big way as well: something like 10% of British citizens live abroad. Asia is full of British expats.

      There are also service exports other than banking: the UK may buy ipads and other tablets from abroad, but almost every tablet and smart phone sold anywhere in the world generates a royalty payment to at least one British company.

      If you look at physical exports other than consumer goods, the UK has not done too badly: pharmaceuticals and office equipment (including computers) are well up on 20 years ago. Food exports were up last year. Education brings in more than financial services.

      What do you mean by a dynamic economy? More people in employment will stimulate the economy. Rick has linked to a number of studies that support the contention that there is no lump of labour because of the benefits of keeping older workers on.

      • originalsandwichman says:

        By the way, William Hutt made a similar argument back toward the end of World War II that lengthening hours and delaying retirement would be the panacea for reintegrating the demobilized troops into civilian employment. He was duly ignored. Last April Fools I wrote a satire based on Hutt’s prescription titled, “”Thinking along the Right Lines’: Creating Jobs through Longer Workweeks and Later Retirement “

        As for those “studies that support the contention that there is no lump of labour”, one of them had the temerity to plagiarize from a draft article I had written the observation that “Those who make the fallacy claim neglect to offer specific evidence of the supposed belief in a fixed amount of work.” The Belgian paper was an analysis of early retirement in Belgium in the 1980s that somehow managed to overlook the major workforce reduction in the Belgian Iron and Steel industry that took place in the 1970s and 1980s. “Econometric” studies that ignore major historical events underlying the data they’re torturing aren’t worth the paper they’re printed on.

    • originalsandwichman says:

      I would say rogerh has nailed it. We “need” to postpone retirement only because the economy is NOT dynamic but postponing retirement won’t hinder the chances of young workers because the economy IS dynamic. Catch 22. Game. Set. Match.

  11. I have a problem with this post.

    The problem we have isn’t about running into hard limits on what we can afford, it’s about inequality. Implicit in this post is the idea that people will, from now on, need to work for longer. But ignoring for the moment the arguments in favour of work for work’s sake[1], and assuming that retirement is desirable, I can identify two big problems with this:

    1) Most jobs are shit. Most people look forward to retiring. Most people would prefer to work shorter hours. This is broadly consistent with the trend towards shorter working hours that has taken place over the past hundred years or so. If jobs make people happy through socialisation then that’s an argument for job sharing and shorter hours per capita, and yes, allowing older people to work if they really want to. But it isn’t an argument for raising the retirement age because…

    2) Rich people live longer than poor people. Rich people can afford to retire earlier than poor people. Therefore any raise in the retirement age is de facto regressive taxation. I am astonished that this simple point is not raised more often.

    3) I am deeply sceptical of arguments that claim that “we cannot afford it”. I recognise you’ve posted recently about the “innovation slowdown” and the “dearth of investment opportunities.” I’m quite happy to argue the toss as to why this is happening, but I struggle to see why this entails we must labour for longer. We already have the technology and the means to ensure that everyone living in the first world can live a long and reasonably pleasant retirement. The future is here, just not evenly distributed. So let’s redistribute.

    Underpinning this “peak state” idea is the notion that the taxpayers are unwilling to pay for adequate social provision. I disagree. If people can be persuaded it is in their interests to pay for a better standard of care then they will.

    So, in summary: This isn’t about hard limits to prosperity. This is about distribution and inequality. It is about right wing vs. social democratic policy choices. Politics, in other words.

    I recognise this blog has a PR/civil service bent, so ya’ll are taking the “shrink the state” dictum as read. My point is that it’s still a choice. And I don’t agree that the people of Britain necessarily want the state shrunk.

    [1]: We know that unemployed people are unhappy. But we also know that once one reaches retirement age, that unhappiness fades because all your peers are in the same boat. And (IIRC) people are generally happy in retirement.

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  13. Roger Jeary says:

    There are so many angles to this argument that there is a danger of simplyfing what is a complex economic and social issue. Whilst I might agree that the ‘lump of labour’ fallacy can be economically true on a macro scale, workers do not operate at that level. If company A employs 20 people and ecides to keep on two older workers for longer than once would have been the case that company is not going to create 2 more jobs for young people so therefore 2 job opportunities will be lost or at least deferrred. To assume that 2 more jobs will be created which are both suitable, equal and located in the same area is indeed a fallacy. Also nothing is ever said about those already employed who will see their careers blocked within that company and be forced to look elsewhere for career progression.

    The premise of the original argument is, in my view, false and grossly inequal as pointed out by Tom James. The issue here is really affordability and social fairness. The attack on workers pensions and the failure of the state to provide adequate pensions is what needs to be tackled and whilst extension of the working age in itself is not a bad thing it must be a matter of choice not economic necessity which drives that move. For the vast majority, given a free choice, working longer is not something they would choose.

    I firmly believe that trade unions have a major role to play in addressing these issues and in parts of Europe they are already doing so. Despite all the other issues that UK trade unions face at the moment they cannot afford to ignore the ageing workforce and the issues that arise from this. Older workers should not be forced to give up work if they want to continue and neither should we be scared into thinking that older workers are the problem when the reality lies elsewhere.

  14. salientwork says:

    A really interesting commentary chain. On the exam question…” should older workers give up etc”…it’s clearly a no. They would be daft to do it in most cases: state pension age moves further out of reach ; value of personal pensions falling fast; tax regime for retirees beginning to look less favourable; older workers income needed to support younger unemployed family members etc
    .
    Having said that, whither the lump of labour? After years of practical experience in the field ( I’m not an economist ) I take the view that we should think about unemployment and employment as verbs not nouns ie it’s all about flows. So if the rate of people leaving the labour market falls employment can only grow if the rate of joiners exceeds it.

    Which is where we get to demand (cf J Portes): there isn’t enough labour demand to absorb existing supply of people, and as our working age population grows we fall further away from the level of activity needed to drive the flows of vacancies we need.

    That said it would also be a serious mistake to treat the UK labour market as a single entity. Around West London and the Home Counties in my judgement there is possibly suffient demand if youngsters have the vocational and jobsearch skills; and the positive attitudes to gain employment. It also helps in life’s lottery at this point if you have the more marketable personal characteristics..principally being white…outrageous but a clear conclusion to be drawn from employers’ recruitment behaviour. On the other hand if you live in Hull for example, where the labour market looks close to collapse, different considerations apply…in that fine city it must look very like a lump of labour however disreputable the term is to economists. Or,in flow terms, however well equipped you are as young person looking for work your competitveness is so low that the why bother option looks the most sensible.

    Oddly in terms of the nations policy response the interests of pensioners and prospective pensioners is held in one place ie DWP ( and not devolved strikingly) whereas for young workers the policy ownership is partly devolved and partly not…and in England by my count no fewer than five Departments have an active interest ( count ‘em: DfE;BIS;DWP;DCLG;MoJ). It should be no surprise that the former group is handled through a significantly more coherent policy and delivery framework. For interested readers CESI/Inclusion have a really good report on this theme.

    A gloomy set of comments, and rightly so. Setting aside the common room debates in the nations schools we really do face losing a generation here. That would be tragic: if you smell smoke from the kitchen you don’t start a leisurely conversation on the soft furnishings n the living room.

    Everybody active; no one left behind; all working together.

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  17. It is hard to take a side on which is right or wrong. Older workers bring more experience and knowledge to any business, while younger workers can bring a certain freshness and futuristic approach to their work. Both sides bring huge advantages, as well as disadvantages at times. It all falls to what a particular company is looking for and what they expect.

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