Older workers are increasingly affected by pandemic economic fallout – the government would be wise to pay attention

The prevailing pandemic narrative is that older people have paid with their health while younger people have borne the brunt of the economic pain through losing their jobs.

Research by the Resolution Foundation, however, suggests that the latter is increasingly being shared across age groups.

Once again, we’re at the beginning of the end of the job retention scheme, popularly known as the furlough.

Employers are having to make a top-up contribution of 10 per cent to the wages of furloughed staff – a share that will increase until the scheme’s closure, currently slated for the end of September.

Redundancy notices are the inevitable consequence of this because some employers simply won’t have the resources to chip in, and older workers are going to find themselves squarely in the firing line.

The Foundation has discovered that older people are already finding it a lot harder than their younger colleagues to get off furlough and back into work.

Of employees who were on furlough in February, more than a quarter (26 per cent) of those aged 55-64 were still on full furlough in May. That compares with just 6 per cent of those aged 35-44, and 16 per cent of those aged 18-34.

This is partly the result of the return to work in sectors that employ a lot of younger people, such as hospitality, and it has contributed to a significant change in the composition of the remaining furloughed employees.

About half of workers on furlough in May were aged 45 and over, up from 38 per cent during the first lockdown. More than 600,000 workers aged 45-64 have now been either unemployed or on full furlough for at least six months.

That includes over two-in-three (69 per cent) who are currently unemployed or fully furloughed older workers aged 55-64, compared with fewer than two-in-five (38 per cent) younger workers.

More than a quarter of the oldest group of workers are now at high risk of unemployment and their future isn’t rosy if they lack the funds to retire, particularly when you consider that the final end of the furlough scheme is set to coincide with an end to the £20 universal credit uplift.

The government has, to date, focused its efforts on assisting younger workers, with initiatives like the Kickstarter scheme squarely aimed at them.

Younger workers have been hardest hit by the collapse in vacancies during the lockdowns and the shuttering of sectors that have traditionally employed them. So it was clearly the right thing to do, even if the government’s schemes’ effectiveness is debatable.

However, while it should obviously continue with these efforts, there is a clear need for it to start paying more attention to the plight of older workers too.

The ideal solution to this is simply to extend the furlough for at least a month, if not longer.

This should provide sufficient breathing space for older workers who have been affected to return to their jobs and to avoid redundancy. It bears repeating that it is a group that finds it much harder to secure alternative employment in the event of the latter.

The furlough has been one of the government’s most effective and popular policies, and while it’s been very expensive, the number of furloughed workers is declining alongside reopening. So the cost is falling.

As a consequence, there is headroom for it to take this step, and not doing so could prove to be a false economy.

It’s worth noting that TUC research has shown that the recovery in certain sectors has been more patchy than it might seem.

Almost all the jobs lost in business services and administration – which saw a fall of 220,000 in the number of employed – are back, but 110,000 of the 790,000 jobs lost during the pandemic across manufacturing, retail, hospitality and the arts have yet to be recovered.

A furlough extension would therefore help younger workers too.

It would also give the government time to formulate the right policy response for their older colleagues.

Needless to say, there would be a political gain for doing so, because these workers are, as a rule, much more conservative than younger people.

That might change if they feel abandoned. And right now they are being abandoned.