Winning the Generation Game  

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July 2000

 
             
  Should Labour outlaw age discrimination?      
             
    Older workers have been hit hardest in the mass layoffs during the two Tory recessions and the rapid changes in technology which are now taking placeIn its recently published report 'Winning the Generation Game: Improving opportunities for people aged 55-65 in work and Community Activity’  the Government is now looking at ways to help them to find work.  Why have older workers suffered more?.  The labour market has changed.  Casualisation, short term contracts and technological changes have all taken their toll.    
     
     
     
     
     
           
    Globalisation has decimated manufacturing as jobs are ‘exported’ to low wage economies  overseas.  The demand for male manual or semi-skilled workers has collapsed.  New ‘flatter’ management structures have led to middle managers being made redundant. When firms shed labour, it was easier to offer early retirement to ‘volunteers’ rather than get involved with all the  hassle of compulsory redundancies. Trade unions preferred early retirement seeing it as a ‘ kinder’ solution. Younger workers with children and mortgages were thus protected.   
     
     
       
  Unemployed Liverpool Dockers    
  retraining in IT skills at a local    
  worker co-op    
             
  Usually there was no difficulty in getting ‘volunteers’ amongst the older workers. In declining industries, many older people had become fed up and disillusioned and jumped at the offer.  The attraction of lump sums played its part too.  Though few anticipated how quickly the money would run out or the difficulty (or impossibility) of getting another job.  There was also the feeling ‘grab it while it’s there’.   
             
  Whilst younger workers were often able to get another job relatively easily when the economy picked up, it was much more difficult for older people.  They didn’t have the right skills.  Retraining was rarely available.  Negative attitudes towards older workers played its part too. Introducing the Report, the Prime Minister recognises this.  Mr Blair stresses ‘that unless we encouraged older people to remain actively engaged in socially valued activity, whether paid or unpaid, Britain would miss out on the benefits of their experience and social commitment' The Performance and Innovation Unit has examined the implications of the sharp decline in the number of people working  in their 50s and early 60s.   
             
  The Report suggests what the Government could or should do about it.   One in three people between 50 and 65 do not work.  Over 2.8 million people in this age group are economically inactive.  The  proportion of men not working has doubled since 1979. Few men (37%) work right up to State Retirement Age.  In 1979 that figure was 57%.  If the employment rate amongst older men had stayed at 1979 levels, there would be 800,000 more men over 50 in work; more than the adult population of Birmingham!  Male unemployment used to fall off after the age of 55 but now it starts to drop at 50.  Whilst over 55s joblessness is high in Wales (35%) and in the North of England (25%), it is very high in the South East (33%).  
 

 

         
  The Tory Government massaged the unemployment figures by encouraging people to go onto Sickness and Disability Benefits.  Over a million people over 50 are on sickness benefits. They are not work-shy spongers. Most were thrown out of work against their will.  Many live in poverty.  Over half rely entirely on benefits as their only source of income. After long periods of enforced idleness, they often become disillusioned and lose hope.  It can affect their physical and mental health too.  From the country’s point of view, there are other very serious implications.  Middle-aged joblessness reduces the GDP by about £16 billion and costs the public purse about £3-5 billion annually.  Furthermore, because they are not working, they are not paying National Insurance contributions and therefore will not have made the requisite contributions to get the full State Pensions unless they are over 60.  So at 65, they enter another round of benefits dependency.  It also means that the National Insurance Fund moves further and further away from the insurance principle.  
           
  The Tories didn’t care.  To them, labour is just another resource to be taken up or cast aside at will.  Their instinct is to blame the victims.  People on benefits are spongers and benefit fraudsters.  How often did you hear Tory MPs saying ‘ there are plenty of jobs around;-just look at the situations vacant ads in my local paper’.  This cavalier contempt for the suffering of ordinary people also ignores the realities of the labour market as far as older workers are concerned.  A vacancy for a job in IT is not much use to a redundant machinist who has not been given any training in computers.  Many employers refuse to employ older people.  Older workers are said to be less flexible, less deferential and incapable of learning new skills.  They also expect to be paid a living wage.  It is far easier to take on 16 year olds who will do as they are told (or else) and let the state pay for the training. You can also pay them a lower National Minimum Wage than an adult.  When they reach 18 years of age, you just sack them and get some more off the dole queue.  
           
  Fortunately not all employers takes this callous and unscrupulous attitude to their workforce.  An example of good practice is B&Q the DIY chain who have made it a policy to recruit older people as their floor sales assistants.  What a difference it makes too.  You can actually talk to someone who knows how to put up a shelf or assemble a furniture flat-pack because they have done it in their own home and may have years of experience of home decorating.  Older workers can often provide stability in the work team.  They have more experience of life and can act as role models or mentors to those just starting their working lives.  
           
  How do we change the negative workplace cultures?  How can employers be persuaded to move away from seeing older people as ‘welfare problems’ towards a more positive attitude where their contribution is more highly valued?  The first should be by example.  The Government intends to take a high profile lead here.  To combat age discrimination, it intends to introduce a Code of Practice on Age Diversity.  If this does not work, it intends to legislate: - though no timetable is given.  It will consider raising the retirement age for all grades in the Civil Service up to 65.  What are termed perverse incentives to retire early will be removed.  To start with, the minimum age at which an immediate pension is payable will be raised from 50 to 55. To make sure that people are able to make undistorted choices, the true implication of any severance offers will have to be spelt out.  Most people find pension regulations mind-bendingly technical.  So explanations will have to be in plain English to make sure that people are not bamboozled into accepting something they would regret later.  Tax regulations will be relaxed so as to allow people to downshift to part-time work without affecting their pensions.  
           
  The skills deficit will be addressed through more focused training.  The current New Deal for the over 50s will be expanded.  Over 90% of those non-working over 50s are not actively seeking work.  In the past, no-one really cared.  But now greater efforts are going to be made to bring them back into the workplace.  The Employment Service will be told to pay more attention to their needs.  Regular attendances at counselling sessions will be provided and required.  Here career guidance will be given.  
           
  But for many people the jobs are simply not there.  Here the government will seek to promote volunteering.  It is a sad fact that despite the rise of joblessness, the over 50s are less likely to do voluntary work than younger people..  Many older people regard it with suspicion.  This is probably a result of the dependency culture which followed the establishment of the Welfare State.  The over 50s are the first welfare state generation. Often they feel that ‘if something is worth doing then the Government ought to do it’.  Earlier generations had a higher regard for self-help and mutual aid. The cry is often, ‘They just want us as cheap labour’.  Frequently resentful, they feel that society has ‘screwed them’ enough already.  Somehow the voluntary sector will have to find a way of getting them involved.  After all you can’t compel people to volunteer.  But what a waste of talent it is.  Easing the ‘availability for work’ rules so that volunteers don’t risk having their benefits cut would help too.  
 

         
  No one doubts the Government’s good intention in all this.  But in its eagerness to help people back into work, it must avoid being heavy-handed.   Employers must do their bit too.  The Government intends to promote ‘champion employers’ who will be held up as an example for others to follow.  But what if rogue employers don’t?  In my view persuasion will not work.  In the end, the government will have to legislate.  But a new law in itself won’t change attitudes.  That takes time.  But it does set a standard which can lead eventually to changed perceptions. Other laws against discrimination have shown this.  But Labour should not wait too long.  Justice deferred is justice denied.  
           
   
     
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This article was published in THE CHARTIST July 2000

 
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