The big retirement is coming
Growing up, I knew that being out of a job was the worst thing that could happen. My mom lied about her age, saying she’ll pay the mortgage until she’s 74. My father dictated his last magazine article to me from his deathbed. Their work brought them money, pride and meaning. So my reaction to the fact that 9 million Britons are neither working nor looking for work – some of them retiring at 50 – is both emotional and practical.
Has the pandemic brought about some unique psychological shift in Britain? I’m starting to think so. With the Bank of England warning that our shrinking workforce could fuel inflation even in a recession, the UK looks increasingly like an outlier. We were not the only country that came out of the epidemic with a lower employment rate than before – so did Iceland, Switzerland, Latvia and the United States. But those four bounce back; we are not. According to the forecast of the Institute of Employment Studies, by March we may be the only developed country with a lower employment rate than it was before Covid-19.
I’ve written before about the increasing number of people citing long-term illness as a reason to stop working, as well as the backlog of the NHS. But that’s not the whole story. 55 percent of the increase in the number of “absent” workers comes from the age group between 50 and 64 years old. Many people retire early not because they are too sick to work, but because they are tired of working. According to new polls, this group expresses a greater distaste for their jobs than their counterparts in Germany and the US, and is more likely to say the pandemic has made them reconsider. Plus, they think they can afford it. In the United Kingdom, 18 percent of economically inactive 50- to 64-year-olds reported that they were better off as a result of the pandemic, compared to 8 percent in the United States and 4 percent in Germany.
It would be the ultimate irony if an entire part of the population thought they could investigate because of an epidemic that harms our economy. The poll was conducted by Public First for Phoenix Insights, a think tank on which I sit on the advisory board. The following quote horrified me: “The invasion of the elderly generation into the Protective Ring of the Nursing Home and leaving it for Covid resulted in a strong realization that I was looking at a possible version of my future”. The interviewee took early retirement “to thoroughly enjoy the time I have left.”
What did we do? The average death rate from Covid is 80, not 50. The government, which kept millions afloat with generous holiday payments, still left us feeling like we were alone. Some people over 50 nobly take care of their spouse, elderly relative or grandchild. Some may have fallen victim to the WFH misconception: the Institute for Fiscal Studies found that telecommuting makes people more likely to retire early. Others may have been lulled into believing that a more balanced existence could be maintained by a leave system that should have ended earlier – in a country where people can take their pensions early.
We may never know. But what is clear from several studies is that health and happiness in later life are closely related to a sense of purpose. I predict a big retirement in a few years when the novelty wears off and housing prices plummet. At this point, we will need employers to recognize that customers value co-workers of the same age and that older people may be more loyal than younger people. Campaign groups argue in favor of more flexible work. But framing the over-50s as needing special treatment is ageist and does a disservice to everyone in that age group. Despite the tight job market, I meet qualified accountants, academics, consultants and surgeons who seem to be pushed out by employers in their 60s.
“Training” is also floated as a panacea. But this requires tailoring. The challenge of getting affluent professionals to retire is quite different from helping the 8.7 million people who currently claim means-tested employment assistance. As a result of the pandemic, there has been a significant increase in the number of people receiving benefits for reported mental health problems or long-term illness without ‘work conditions’ or job search requirements. The Center for Social Justice estimates that this group now numbers 3.5 million and is urging the government to support one in three who say they would like help getting into work. Could another consequence of the pandemic be that the Department for Work and Pensions has not done its job?
The deepening of the DWP figures is a sad reminder of Britain’s history of long-term unemployment, which for so long has been obscured by immigration. The level of economic inactivity is most acute in the most deprived parts of the country, among the disabled and single parents, who have been particularly hard hit by the stresses of recent years. Over the past decade, progress has been made in closing the gap between these groups and the rest – but this has now been reversed. According to the IES, if we could eliminate only half of these employment differences towards the best in Europe, one million more people would be working.
Good health is a cornerstone of employability, but it is difficult to define. Poor health is increasingly being cited as the main cause of inactivity – but the second most common illness after heart problems is not mental illness or back or digestive problems, but ‘other’. If this is a cry for help after the horrendous efforts of punitive closures, then it needs to be addressed.
I still believe that work is the best way out of poverty, a great way to maintain a sense of purpose in later life and support mental health. If the British have decided that it is optional, even hostile, then we are in serious trouble.