New Middle Age calls for a new economic analysis and new economic strategies which will allow the unique contribution of those in New Middle Age – in terms of skills, experience and productive potential – to be fully realised.
A New Economic Future
As the population ages we will need to draw more on the resources of New Middle Age. If the skills, experience and productive potential of the 50 to retirement generation are not used to the full there will be losses to economy and society, through lost productive potential, lower tax revenues and higher benefit costs. We need a new economic analysis and new economic strategies.
- The contribution of the working population aged 50 to retirement will be important to maintain economic growth as the population ages. Increasing working lives by one year could generate a 1% increase in GDP through higher taxation income and reduced benefit spending.
- Employers will need to draw on the 50 to retirement workforce to meet future labour demand. With birth rates now substantially lower than during the 1960s baby boom, demand for labour will in future no longer be met in full by new young people joining the labour market. In 2014 it was forecast that over the following 10 years there would be 13.5 million job vacancies but only 7 million school and college leavers to fill them.
- Employees will want to work longer to provide a sufficient income in retirement from savings and pensions.
- Employees aged 50 to retirement have proven skills and high productivity. But evidence of high productivity is based on direct measurements of productivity which are not always available. Economists may elect to use pay data as a proxy. But pay data would suggest that 50-64 year old employees have lower productivity as their pay is lower than that of younger age groups. Better data to allow a more accurate analysis is required.
- Pay may be lower simply because people have elected to reduce their hours. But this can be compounded by the general dearth of higher quality, skilled and well-paid work in the part-time job market. People in New Middle Age may choose to reduce their hours to provide time for other responsibilities, such as caring for grandchildren or older relatives. If they need to down-skill as well, the result is additional loss of income for them and loss of productive potential for the economy.
- Family carers provide care for vulnerable people who would otherwise need support from the state. Providing jobs that allow those in New Middle Age to balance work with caring responsibilities such as these can offset burgeoning social care costs.
- Employment of people aged 50 to retirement does not disadvantage or displace younger people in the workforce. Rather, evidence shows that employment of people over 50 may lead to increased spending and boost job creation.
- Government can support the employment of people over 50 by endorsing their potential, developing policies to keep them in work or closer to the job market, and applying appropriate policies for taxation, National Insurance and pensions.