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It's
not just young mothers who want flexible working hours. So do the
over-fifties - and unless we oblige them, we face crippling labour shortages.
Donald Hirsch reports
The debate about how late in our lives we should go on working has got into a
terrible muddle. Twenty years ago, the talk was all of declining demand for
labour, of redundancy and of retirement at 50. Today it is all about the
pensions time bomb and the need to go on working until at least 70. Older
workers, who once felt prematurely written off, now fear they will be made to
work till they drop.
We have missed the central point: exactly how can people in their fifties and
sixties play a useful role, and achieve their own aspirations, in a society
where being 60 no longer means being old? These age groups will become the
most populous in the workforce as the age pyramid inverts. By the early
2020s, nearly 9.5 million people will be in their fifties, compared with
eight million in their forties and 8.5 million in their thirties. With people
also entering work later and living longer, it has become clear that
ever-earlier retirement (fewer than half of the male population now works to
65) is not sustainable without drastic effects on pension levels.
In fact, the trend towards earlier retirement, which lasted for much of the
20th century, may already be over. The graph opposite shows that, while the
proportion of men aged 50-65 who are not working remains nearly double what
it was in 1979, employment is now rising much faster in this age group than
for "prime age" workers. This has happened for women, too, in
contrast to the 1980s when the over-fifties did not share in the rapid growth
in female employment. So we should not wring our hands and imagine that
unsustainable dependency ratios are inevitable. Rather, we should think about
three crucial issues that arise from a likely trend towards a later average
retirement age.
The first issue is inequality. Research for the Joseph Rowntree Foundation
confirms not only that occupation is the most important predictor of poverty
in retirement but also that, for certain groups, the risk of poverty
increases if they stop work in their fifties. A shorter working life allows
fewer years to build up a pension.
Moreover, though people have growing opportunities to work beyond full-time
employment, these tend to favour the better-off. The Rowntree research found
that nearly half of early leavers move into "bridge jobs" - into
part-time, short-contract or self-employed work in a transitional period
before full retirement. Educated professionals and managers get the plum
deals here. Well-qualified men are most likely to make it in self-employment,
the form of bridge job that yields the greatest job satisfaction.
True, crude labour demand can help less-skilled older workers. In the US jobs
boom of the 1990s, unskilled older people took up what were known as
"fairground jobs" - casual, grotty work - and started to become
what unskilled young people used to be: the last dregs in the labour reservoir.
But this does not address a fundamental problem that has fed the decline in
grey labour: a disillusion with the world of work. People who feel their
talents are not appreciated can become surly, reluctant workers, which makes
them even less appreciated. The research shows that once people become fed up
with work, financial or other incentives to stay in the labour market can
carry little weight. Finland, the only country that has made a serious
assault on age discrimination, has tried to combine better occupational
health with changes in the workplace that help older people. In such
campaigns, giving fortysomethings positive goals and allowing them to
continue to progress in a career structure can be as important as supplying
an ergonomic office chair.
The second issue concerns what older workers should actually do. One kind of
answer comes from the past. People who had become less productive in their
career jobs were hired by the same organisation to do something different.
Business executives and politicians were "kicked upstairs" into
positions where their direct responsibilities decreased, but where they were
still at hand to give wise counsel. Manual workers became park keepers or
nightwatchmen with duties no more specific than "keeping an eye on
things". When local authorities became more cost-conscious, would-be
park keepers drifted on to incapacity benefit. Labour efficiency increased -
and so did the quantity of graffiti sprayed on the swings and park benches.
We are unlikely to return to a world where older workers' intangible
contributions allow them to remain in jobs that cannot be justified on strict
economic grounds. But we can still redeploy and retrain people. For example,
young recruits to nursing are drying up. Yet a Rowntree study of older NHS
nurses revealed an astonishing lack of thought by employers about how to keep
them working. Even a modest amount of training to help older nurses learn
about new technology and procedures, or some well-publicised opportunities
for less physically demanding jobs, would help.
The most successful third-age workers will be those who can take their
working lives into their own hands. So it will be as important to learn how
to handle new working relationships (negotiating contracts; selling your
services) as it is to learn new technical skills. Some older workers are
setting up their own local networks to spread such skills - for example, the
East Midlands "Experience Works!" network. The aim is to build
self- confidence among the over-forties. Having others your own age around
you can count for a lot: a 50-year-old sitting next to a 20-year-old to learn
computer skills dreads being shown up.
The third issue concerns how, among the over-fifties, work relates to the
rest of their lives. More than one in three people in their fifties is a
grandparent; many still have dependent children of their own; a fifth
classify themselves as "unpaid carers", typically of ageing
parents. Research on why people leave work at this stage of life shows that
domestic factors play a critical role. Few employers encourage the part-time
working that many older workers would like.
One consequence is that working carers are being put under immense strain,
often doing two full-time jobs, one paid and one at home. These strains will
increase if declining pension values force more people to stay in work longer
without part-time or flexible working options.
If this ultimately causes a reduction in the amount of unpaid care on offer,
the consequences for the Exchequer could be catastrophic.
The new-found public respect, in theory, for the "work-life
balance" has focused overwhelmingly on the needs of parents with young
children. This is partly because it's probably easier to tell colleagues that
you're leaving work early to pick up a toddler from playgroup than to say
you're going to change your mother's incontinence pads. But it is also to do
with government priorities. For example, legislation that obliges employers
at least to consider requests for part-time working applies only to parents of
children under six.
The government has promised to legislate against age discrimination by 2006.
This will mean much more than stopping employers putting "over-forties
need not apply" on job ads. Most significantly, it will become illegal
for an employer to force you to retire just because you have reached 60 or
65. Yet on its own, it will not cause older workers to be better regarded,
nor will it improve their incentives to stay in work. And to raise the state
pension age to 70 would simply favour the better-off groups again, because
they tend to start work later, to have more chances of staying in work, and
to live longer after 70. To many who are being edged out of the labour market
in their fifties, a higher official retirement age would not mean working
longer, but waiting longer for a pension after leaving work.
So the only real solution is to make work more friendly to people as they
grow older, through more flexible hours and employment terms, better training
throughout working life, and better conditions in workplaces. The stakes are
high, for employers as well as employees. Ultimately, such improvements could
be the only way of securing the supply of labour.
Donald Hirsch is a special adviser to the Joseph Rowntree
Foundation. His report Crossroads after Fifty: improving choices
in work and retirement is published by the foundation on 2 December
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