Living Longer Working Longer. Older Workers in Ireland - Myths and Realities

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1 Centre for Ageing Research and Development in Ireland Living Longer Working Longer Older Workers in Ireland - Myths and Realities Belfast, 10 Nov 2010 Paul McGill, Strategic Research Officer, CARDI

2 Recent population change 2 All Ireland older population

3 Projected population change 3 NI projected rise in older population (thousands) RoI projected rise in older population (thousands)

4 Number of years expected Life expectancy at All-Ireland life expectancy at age RoI male NI male RoI female NI female Time periods

5 Background 5 Boom and bust: job creation and losses Fear about future (Hillyard et al) Pension age rising to and higher? Older workers pay Health and disability Age-friendly workplaces Ageism and discrimination Cutting across these - low awareness, little research

6 The boom, RoI RoI numbers in work by age group, 2nd Q (1998=100) All <55 Age All

7 The older people s boom, NI 7 NI numbers in work by age group, 2nd Q (1998=100) All < All

8 Job losses in recession, RoI 8 RoI change in numbers in work, first quarter , by age and sex (%) Males Females

9 Job losses in recession, NI 9 NI change in numbers in work, first quarter , by age and sex (%) (m) (f) 65+ (m) 60+ (f) Males Females

10 Three issues young and old Older workers are at the top of their pay scales, earning a lot for what they re doing. 2. Early retirement frees up jobs and gives young people a fair chance (so raising the pension age is a bad idea) inter-generational equity. 3. After all, they ll get good pensions if they do retire.

11 1a Actual pay by age RoI 11 RoI median hourly earnings, full-time and part-time by sex and age group, years years years years 60 years and over Male FT Female FT Male PT Female PT

12 1b Actual pay by age NI 12 NI median hourly earnings, full-time and part-time, by sex and age group, Male FT Female FT Male PT Female PT

13 1c NI weekly, full-time NI median weekly earnings of full-time workers by age and sex Male median Female median

14 Back to the three issues Older workers are at the top of their pay scales, earning a lot for what they re doing. 2. Early retirement frees up jobs and gives young people a fair chance (so raising the pension age is a bad idea) inter-generational equity. 3. After all, they ll get good pensions if they do retire.

15 2a Older workers new pattern 15 In previous recessions it was older workers out. But.. Many pension schemes have closed or are less generous; public sector clamping down on extra years so employers have fewer incentives to offer older workers to retire Employment protection laws make it more difficult to sack older workers or refuse to employ them More older workers seem to want to hold on to their jobs whether for positive reasons (they like their work) or negative ones (can t afford to retire)

16 2b Freeing up jobs 16 Hypothesis: early retirement would create jobs for young people. So, high rates of older employment would be associated with high rates of youth unemployment. In fact there is a negative correlation in EU 27+3 between youth unemployment and the employment rate of older workers Of the 10 countries with higher YU rates than Ire, 3 have higher rates of OP working and 7 have lower

17 2c European evidence 17 Youth unem work rate Netherlands Norway Denmark Ireland France Spain Italy Overall correlation: Eurostat (2010)

18 2d Economic activity 18 It s not a zero sum game. Spending power by older people generates economic activity, which can create jobs for younger people. Working longer benefits the state and wider economy by reducing public expenditure on benefits, raising tax receipts, boosting employment and raising economic growth (UK government) Early retirement is costly to the budget, raises labour taxes and leads to less job creation (Torres OECD)

19 2e Economic activity 19 In the Irish context these benefits have been argued for higher employment rates among older people: They boost labour force growth and thus offset the negative impact of population ageing on economic growth; They reduce pressure on public finances through later retirement and increased tax and pension contributions; They smooth the pace at which employers will have to adjust the composition of their workforce. (TILDA 2010)

20 2f Need for older workers 20 Must think beyond short term the skills and dedication of older people will be needed: Old age dependency ratio projected to rise by 2031 from 26 to 34 per 100 working age adults in NI from16 to 28 per 100 in RoI Of the 65,000 who left RoI last year 91% were (and 72% were foreign nationals) We cannot depend on young foreign nationals to come back and fill our skills gaps again

21 Issue 3 They ll get a good pension 21 In RoI, the full contributory pension of works out at 33% of average pay. In NI, State pension is only 97.65, about 27% of average pay Perhaps this explains why only 63,000 people in RoI have retired before the age of 65; a mere 18,000 in NI (women 60)

22 Health and retirement 22 Being in work is good for your health and wealth in most cases People tend to become more sick and disabled as they get older Health problems are important causes of decline in work rates in older age groups Important social equity issue - people in unskilled or manual work are most likely to be sick/disabled Can we make work healthier and safer?

23 Later retirement not good for all 23 In NE England, male death rate is 700 per 100,000 for routine workers and 200 for professionals. The relationship between employment and health is close, enduring and multi-dimensional. Being without work is rarely good for one s health, but while good work is linked to positive health outcomes, jobs that are insecure, low-paid and that fail to protect employees from stress and danger make people ill. (Marmot M, 2010: 68)

24 Conclusions 24 In both NI and RoI there was no zero sum game in the good years; there were jobs for all ages It may be a minus sum game any older workers who retire will probably not be replaced at all Looking to the future, older workers will be needed and will stimulate economic activity to benefit all; need better training and work changes As dependency ratios rise, older people will be doing a favour by supporting themselves for longer rather than expecting younger people to do it for them

25 Conclusions 2 25 Some work can harm health, especially in routine and manual jobs We may exacerbate social class divisions by increasing State pension age condemning many working class people to sickness and/or benefits Need a great deal more research eg why people retire (eg job satisfaction, income, health, hobbies) Opportunities for down-sizing and for greater challenge. Need research on employers attitudes

26 Detailed statistics 26 I will be happy to provide the data and references behind the graphs in this presentation. paul@cardi.ie Check out our website which is a good source of information on ageing research Thank you for your time and interest