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Why the Default Retirement Age should be removed Sheila Wild Head of Earnings and Age Inequalities Equality and Human Rights Commission.

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Presentation on theme: "Why the Default Retirement Age should be removed Sheila Wild Head of Earnings and Age Inequalities Equality and Human Rights Commission."— Presentation transcript:

1 Why the Default Retirement Age should be removed Sheila Wild Head of Earnings and Age Inequalities Equality and Human Rights Commission

2 How the recession is affecting older workers Since the 1990s recession the employment rates for older workers have improved; from 45.1 per cent in 1993 to 56.0 per cent in Redundancy rates in the first quarter of 2008 were very similar across the different age groups. The latest figures for the start of 2009 show that the redundancy rate is now more than double that for those aged years.

3 How the recession is affecting younger workers Younger workers have been particularly hard hit in previous recessions. In the 1990s recession the employment rates for young people fell faster than for any other age group and recovered more moderately. By July 2009, the unemployment rate among year olds was 17.3 per cent compared with 11.9 per cent a year earlier. And the number of unemployed year olds reached a 16- year high of 726,000, with those out of work for more than a year at 528,000, the highest level for 11 years.

4 The threat of scarring In the early 1980s recession, the unemployment of those under 18 years was at 30.8 per cent in July Research has found that high aggregate unemployment when a cohort is aged has mixed effects on subsequent unemployment. For low-skilled individuals there is a lasting adverse effect on their employment prospects. For high- and mid-skilled individuals, there is a small fall in subsequent unemployment rates as they stay out of the labour market to develop skills.

5 Middle-class recession? Low-skilled elementary occupations (such as shelf-fillers and cleaners) and process, plant and machine operatives have suffered most since with an increase in unemployment amounting to nearly 5 per cent of the workforce. Skilled trades (such as plumbers and motor mechanics) and sales occupations (such as shop assistants) have also suffered, with their unemployment rate rising by around 4 per cent. In contrast, managers and senior officials have seen their unemployment increase by only 1%, and white-collar professional unemployment has increased by just 0.7 per cent.

6 Conclusions It is not a contest between older and younger workers, but about ensuring everyone who wants work has the appropriate skills, whatever their age. The UK Commission for Employment and Skills has predicted 2 million new jobs between now and 2020 – and most of them will demand higher level skills. In securing jobs coming out of recession, skills levels are likely to be the key factor, not age.


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