The Covid-19 pandemic has pushed the largest annual employment fall for older workers since the 1980s, according to a report published today.
Older and younger workers have been heavily knocked by the pandemic job market, which has seen a U-shaped employment shock.
“While the youngest workers have been hardest hit by the crisis, older workers have also been badly affected, experiencing the biggest annual fall in employment since at least the 1980s,” senior economist at Resolution Foundation, Nye Cominetti, said.
Since the mid-1990s, there has been near-continuous employment growth for workers over 50, the Resolution Foundation found.
While 16–24-year-olds have felt the impacts the most, those aged 50-69 have seen a fall in employment double what those aged 25-49 have witnessed.
“After losing work, older workers take the longest, on average, to return to employment,” the report said, adding that only 62 per cent of older workers will have found work again after six months. The report suggests older women make up the majority of this figure.
If older workers do find work, the report continued, they then face hourly earnings dropping by 9.5 per cent compared to their pre-unemployment earnings – twice the amount seen by middle-career workers.
“Becoming unemployed during the pandemic can potentially have a big impact on older workers’ retirement plans,” the foundation said. “Either forcing them to retire earlier than they would have planned to, thereby reducing their income in retirement, or forcing them to work longer to make up for lost earnings.”
There has been employment support afforded to older workers throughout the pandemic, however, the foundation urged that the support needs to be tailored to fit the needs of older workers.
By providing a tax credit style supplement to overcome the wage penalties that are faced when returning to work, the government could strengthen the support available for older workers.
“The economic downturn following the Covid-19 pandemic is likely to widen existing inequalities and will hit some groups harder than others,” welfare programme head at the Nuffield Foundation, Alex Beer, said.
“We urge the government to offer tailored support to older workers, including opportunities to retrain, adequate support to find new jobs and, for all workers, greater rights to flexible working.”