Reinvigorating our skills system to support older workers

post Charlie Samuda 0 Comments

Looking for a new job is daunting at the best of times. Even with unemployment at a record low, many of the jobs available are part-time, poor-quality or unreliable shift-work. It’s an uphill struggle if you don’t have the right qualifications to start with. Now that further education funding has been slashed by a quarter since 2009, that’s more likely to be the case for job seekers. Unemployment in the North East of England is now double that of the South East, so it is also clearly much tougher to find work if you are in a part of the country that isn’t doing so well.

Now imagine job hunting at the age of 59.

Those of us who worry about social mobility often think about the barriers that stand in the way of school leavers, graduates and young adults getting ahead. It is easy to see why. The economic crisis hit young people hard. Workers under 30 are less likely to get on the property ladder than ever before. They will work longer hours, pay a higher cost for university and will probably have to change careers far more often than their parents ever did. The fact that so many researchers, up-and-coming politicians, journalists and bloggers (and yes, the author of this piece) tend to be much closer to their student days than their retirement days goes a long way to explaining why millennials often get the bulk of the sympathy.

But older workers also find themselves at the sharp end of the forces reshaping the world of work. Those over 50 have a decade or more of work ahead of them but are far enough away from school that they are at much greater risk of losing out as technology up-ends their jobs. Over the next 10 years, at least one in four European workers are expected to experience what is euphemistically referred to as ‘skill obsolescence’. The UK government’s own analysis of older workers finds that unless things improve, an additional 2.5 million older people will be out of a job by 2033, many of whom will have inadequate pensions.

Worse still, when older workers lose one job they tend to take longer to find another. A study of workers in America found that those aged 50 and over were a third less likely than 25 to 34 year olds to be back at work one year after being made redundant. Older workers are often required to accept deep pay cuts when they do go back to work, something that can be made worse by the link between long-term unemployment and declining physical and mental health. Factor in the UK’s ageing society and the prospect of rising retirement age and it becomes clear why the problems facing older workers deserve attention.

By now it is well established that countries like the UK need to prepare for big shocks to the labour market in the coming years. Digitisation and machine learning, automation and offshoring all pose a risk to routine jobs. It is also well established that the education system will be a big part of the answer to the future of work. Read any of the many, many reports on the future of work and most end with a call to governments to double down on efforts to re-train and up-skill their workforces.

Though sensible in theory, it is hard to make re-training work in practice – and probably even harder for older workers. For example, the UK used to have an over 50s tax credit to help older workers pay for extra study. A look back on this programme shows some of the reasons why it is so difficult to implement. For one thing, a year after its introduction, less than 5 per cent of those eligible for help were actually taking the money. It also seems hard to get workers to plan ahead: another survey of older workers showed that half did not expect to need any training in the future and two thirds used the money only for skills relevant to the job they already had. That is entirely understandable – busy people with jobs and families can’t be expected to be experts on their local labour markets. It does not mean that we should give up on re-training: instead, we should think about why the over-50s are less likely to use it.

A big reason seems to be that older workers are often unfamiliar with the skills system after many years away from education. Designing a system with this in mind would be a sensible first step. In Singapore the government offers all its citizens an annual use-it-or-lose it voucher of ¬£400 that can be spent on approved courses and users can top-up this money out of their own pocket. A former official familiar with the program told me that its goal was simple: to start getting older workers used to the idea of being back in the classroom. Of course, giving every adult 400 a year is an easier decision for one of the world’s richest per-capita countries than it would be for the UK Treasury at present, but the broader point still stands: it is a sensible investment.

There are plenty of other things we can do to make life easier for job hunters old and young – investing much more in the adult skills system would be a good start. But the lack of attention paid to the over 50s when thinking about the future of work is a missed opportunity.

Charlie Samuda is a graduate student at the Harvard Kennedy School and a former UK Labour party adviser.

The image is by flickr.com/world_relief_spokane/

 

 

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