Third Age Employment Network - Archived News September 2005

Week Starting 26th September

National Minimum Wage Rises

Up to 1.3 million workers will benefit from this year’s increase in the national minimum wage which comes into effect from this weekend (1st October).

The adult rate of the National Minimum Wage will go up from £4.85 to £5.05 per hour, while the youth rate, paid to 18-21 year-olds, will rise from £4.10 per hour to £4.25. The rate for 16 and 17 year old workers, introduced last year, will remain at £3.00 an hour, to enable it to be fully reviewed by the Low Pay Commission in its annual Report to Government in February 2006.

Secretary of State for Trade and Industry Alan Johnson said:

"Since the National Minimum Wage came into force in 1999, over a million low paid workers have benefited each year.”

But the increase has brought the usual round of sparring between employer’s organisations and trade unions about future increases.

Kevin Hawkins, the director general of the British Retail Consortium, claimed that another rise in the national minimum wage could cost his members in the retail sector £2.7 bn and lead to the loss of over 20,000 jobs.

The Federation of Small Businesses has called for the national minimum wage to be replaced by regional versions - so that the variations in pay between regions can be mirrored.

Meanwhile, the TUC is pushing for the adult tier of the national minimum wage to rise to £5.35 by next October and to £6 by 2006. It also wants the adult rate to start at 18, not 22 as at present. However, the Government has signalled its intention to keep the present 3 tiered approach in the draft age regulations.

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Increased Life Expectancy Means Mandatory Retirement Ages Should Go

News this week that life expectancy is continuing to increase led the CIPD (Chartered Institute of Personnel and Development) to renew their call for the abolition of mandatory retirement ages.

According to the Continuous Mortality Investigations Bureau, the life expectancy for men at age 65 may rise another 3 years during the next decade to reach nearly 90.

Responding to the figures, the CIPD’s pensions adviser, Charles Cotton,v commented, “Many workers want to keep working beyond current retirement ages, albeit in many cases on reduced hours or in other more flexible ways.

In the future we expect this trend to accelerate as people choose to extend their working lives in order to supplement their retirement incomes and maintain quality of life…….At a time when employers are struggling to recruit and retain workers with the skills and experience they need (mandatory retirement ages) make no business sense.

With an ageing population, many firms are recognising that they need to recruit and retain older workers to ensure their workforce reflects the populations they serve.”

John Philpott, the CIPD’s Chief Economist will be talking about ‘Managing Job Quality and Satisfaction’ at TAEN’s Annual Conference on October 13th. (click here for details).

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Factors Affecting The Labour Market Participation of Older Workers

This week the Department of Work & Pensions (DWP) published new research on the factors which influence the labour market participation of people aged 50-69.
The research was based on interviews with over 2800 people in that age band.

According to the DWP’s press release….the research explores the relationships between the factors that influence labour market disengagement, retention and return. It also reports on general attitudes towards work and training and explores people’s decisions about planning for retirement.

The main findings of the research were :-

Respondents’ reasons for wanting to work fell into two broad categories:
- Financial, including financial choice and financial necessity.
- Personal/practical, including self-esteem; job satisfaction; providing for self and family; social contact; maintaining good health; and providing a routine.
Exit from the labour market was generally associated with four strong factors: redundancy, ill-health, financial security and caring responsibilities. Redundancy or ill-health sometimes acted as single reasons for leaving but financial security never caused labour market exit on its own. People stated that financial necessity was the most important reason why they remained in work.
Those who returned to the labour market generally did so within a year, often facing multiple barriers in the process.
Reasons why some respondents with health problems remained in work, often despite having severe health conditions, were complex and covered the financial and personal/practical reasons above. Those who remained in work showed a strong work ethic, a desire for independence from state benefit, employer support and a perception that their illness was not permanent.
Attitudes towards training varied according to respondents’ occupation, work history and work status with those who had had regular training in their work being more positive about that training.
Respondents in less well paid, part-time semi-skilled or unskilled occupations said that it was difficult to negotiate with their employer about flexible working conditions.
Individual awareness about the help available to support a return to work and the extending working life agenda was low with respondents interpreting Government policy as being about a compulsory extension of state pension age. Respondents considered that working longer should be a matter of choice and should not be enforced. Most expected to retire at state pension age and considered that they had earned the right to do so.
Respondents saw a role for government in: communicating pension information; providing a stable and reliable income for people in retirement; regulating the pension environment to protect consumers; supporting flexible working practices; rewarding working longer; and enabling choice around when to retire.

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Blunkett Commits Jobcentre Plus to work closer with voluntary and community sector

David Blunkett has announced his intention to ensure Jobcentre Plus works more closely in partnership with the voluntary and community sector.

The Secretary of State for Work and Pensions said he was determined to make sure communities were at the heart of plans to help those facing the greatest barriers in society get into work and transform their lives.

“We have one of the best labour markets in the world and Jobcentre Plus has already played a major role in helping those with the greatest barriers to overcome them and get into the workplace.
“If people want to re-enter the labour market and escape dependence, we should support them, and I want the voluntary sector in particular to help us do that. They have the commitment, expertise, and local knowledge to help us change lives and turn around communities.

"That is why today I can announce that every Jobcentre Plus district manager will be asked to look at developing imaginative partnerships with the voluntary and community sector. Not to replace existing services but to provide additional flexible approaches, such as mentoring, support for those entering work, and help with ex-offenders or drug misusers.

“Ensuring that the community itself is part of the solution is vital in making it easier for those on benefit to rebuild confidence, for example with volunteering as a stepping stone into work and social contact."

Some in the voluntary sector are wondering whether this might be a precursor for a potential privatisation of Jobcentre Plus services. (click here to see previous news item).

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Week starting 19 September

NAPF says Citizen’s Pension would take up to 10 million pensioners off means test

The National Association of Pension Funds (NAPF) has proposed a Citizen’s Pension, worth £109 a week at current prices, to be paid to all on the basis of UK residency, rather than on National Insurance contributions, and rising in line with earnings rather than prices.

In its final report on proposals to implement the new Citizen’s Pension regime, the NAPF has said the new system would reduce pensioner poverty, provide a far simpler state pension system on which to build additional savings and would be fairer to millions of women, carers and others who miss out under the current system.

Research carried out for the NAPF by MORI indicates public support for key aspects of the Citizen’s Pension, with four out of five Britons supporting the idea of equal pension payments for men and women, even where women have taken work breaks, or are working part-time on low salaries.

The report addresses criticisms of the Citizen’s Pension scheme, including that it would be too costly and that a residency qualification would be dangerous.

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EOC publishes report on flexible and part-time working

The Equal Opportunities Commission (EOC) has published Britain’s Hidden Brain Drain, its investigation into flexible and part-time working.

The report looks at the benefits of flexible working, whether at full or part-time hours, and at the relationship between the two issues. The EOC sees flexible working as the key tool in unblocking the hidden brain drain which its investigation has revealed amongst part-time and older workers in particular.

The UK has the highest proportion of part-time workers in the EU. A quarter of all those in employment (7.3 million) are part-time workers and three quarters of them are women. Women working part-time are earning 40% less per hour on average than men working full time, about the same as 30 years ago.

The key findings of the study are:

Many women and men who work part-time are working below their potential. Half had previously held jobs requiring a higher level of skills or qualifications or with more responsibility.
Part-time working is mostly only available in low-level, low-paid jobs, concentrated in certain sectors.
Working part-time has a detrimental and long-term impact on women’s earnings.
At the same time as part-timers are being under-utilised, many employees are both overworked and stressed.
Some 2.4 million part-timers say they are doing lower-skilled work than they are capable of because it is less demanding and stressful.
Businesses that use flexible working have found it results in recruitment advantage, higher levels of staff retention, lower absence rates, better employee relations and morale, and increased productivity.
Nearly all HR professionals who responded to a web survey said training was necessary to manage flexible workers, yet only one in eight said their own organisations provided sufficient training.

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Working Longer or Saving More?

Norwich Union has commissioned further research into attitudes to working longer. The research sampled 1,000 adults aged between 18 and 70 (non-retired) in August 2005. The key research findings are:

Although 85% were aware that life expectancy is rising, only 52% accepted the view that people must work longer because they are living longer.
82% plan to retire before the state pension age with men on average planning to retire at 60 and women at 59. But these plans change with age with 55-64 year olds planning to retire at 63.
58% of those that plan to retire before the state pension age said their wish to retire early is influencing the amount they are saving or planning to save for retirement.
41% of those who want to retire before the state pension age would be prepared to work beyond it. This is highest among younger age groups, decreasing to 28% for 55-64 year olds.
78% were unaware of the financial benefits to delay retirement available through the Department for Work and Pensions state pension deferral. However, once it was explained, 60% of people said they would choose to delay their retirement by a year if they were to receive the extra 10% per week throughout their retirement.
Positive responses to delaying retirement for a financial incentive decrease with age. People aged 45-54 were 59% in favour, but only 52% of 65 year olds were.
The main reasons why people choose to retire beyond the state pension age are they enjoy the social interaction and mental stimulation at work as well as needing the extra income to enjoy a comfortable retirement.

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New Office for Disability Issues to be set up

David Blunkett, Secretary of State for Work and Pensions, announced that a new Office for Disability Issues would be established later this year to ensure services are fit around the individual. The new unit will be responsible for driving action and delivery across the whole of Government and will link with the work of the Disability Rights Commission. It will be working with business and public services, amongst other organisations, to change attitudes and facilitate inclusion.

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US study highlights the need for older workers as labour and skills shortages affect industry

In a research study, the executive networking group The Conference Board has identified areas of labour and skills shortages and looked at the measures being taken by some blue-chip companies in the US to safeguard future growth and productivity. Many are now turning to older workers. They are putting in place flexible working arrangements to recruit and retain them and establishing phased retirement plans for people aged 55 and older.

The oil, gas, energy and healthcare industries, as well as government, are currently experiencing skills shortages. Others are concerned about the impending retirement of large numbers of baby boomers who currently make up more than 40% of the US labour force.

Half of the companies surveyed believed the departure of older workers presented potential “knowledge vulnerabilities”. The technology and pharmaceutical industries, for example, have expressed worries about the development of new products and services against an anticipated drain in experienced engineers, key sales representatives and senior managers. A third of the companies polled had identified knowledge areas where they could be vulnerable and half had established mentoring programmes to share and transfer knowledge.

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Week starting 12th September

1300 Jobs To Go At the LSC

The Learning & Skills Council, is to cut 1300 jobs as part of a new £40 million savings programme. Staff numbers at the Coventry HQ are to be cut by 500, whilst the other 800 will go from the 47 Local Learning and Skills Councils around the country. The staff affected will leave by June next year.

Mark Sewotka, the General Secretary of the Public and Commercial Services Union, described the plan as “devastating”. He commented, “These cuts will bring devastation to the delivery of vocational courses, apprenticeships and adult learning, seriously undermining the government’s skills agenda.”

But explaining this latest round of job losses, the LSC’s Chief Executive Mark Haysom, said, ”We want to develop new, less bureaucratic and more strategic relationships with partners to ensure better quality and more relevant training for employers and individuals.”

He told reporters that the money saved would go into frontline services for learners.

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Employment Figures : Good and Not So Good News

First the Good News…..

Given the slowdown in the growth of the UK economy, the figures are holding up better than many feared.

Over the past year an additional 315,000 people have found jobs. Over the last quarter the number of people in work reached 28.73 million - a 34 year high - with 83,000 more people in work (mostly women). The overall employment rate was 74.8%. Half of the increase was people going into full-time jobs, the other half was in part-time work.

The unemployment rate remained at 4.7% - a 30 year low – although the number of unemployed went up by 12,000 over the last 3 months, to reach 1.42 million.

The economic inactivity rate for people of working age was 21.4% for the 3 months to July, down 0.1% from the previous quarter. The number fell by 16,000 but is still nearly 8 million.

Then the Not So Good News…

The claimant count rose by 1600 to reach 866,200 in August and has now increased for seven months in a row.

The average number of job vacancies for the 3 months to August was 631,700, down 15,500 on the year and the number of redundancies rose to 144,000 over the quarter.

The increase in the number of older workers in employment has slowed right down. Over the last quarter it increased by 20,000 for those aged 50 to state pension age and 11,000 for those over it - and applied to women only.

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Ministers Contemplate Jobcentre Plus Privatisation

Ministers are contemplating privatising the bulk of Jobcentre Plus’s services according to the largest civil service trade union.

The idea was originally floated a year ago by David Willetts, the then Conservative shadow Works & Pensions spokesman. The proposal made its way into the Conservative Party’s general election manifesto, but with Labour’s victory, most people thought the idea was dead and buried.

But now the Public and Commercial Services Union claims to have seen a leaked letter between civil servants and Margaret Hodge – the Minister for Work - which details the privatisation proposals. These include sub-contracting to ‘equivalent’ private or voluntary sector organisations such activities as ‘work focused interviews’ with the long term unemployed, services to lone parents and people in receipt of Incapacity Benefits.

The union says that up to 100,000 jobs could be affected and has written to David Blunkett, the Work & Pensions Secretary seeking assurances that there is no intention to break up and privatise Jobcentre Plus.

Margaret Hodge is one of the speakers at TAEN’s Conference on October 13th. Click for details

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Labour Market Cooling But Overall Outlook Remains Positive

The latest Manpower Employment Outlook Survey reveals a Net Employment Outlook of +8% for the 4th Quarter of 2005. Of the 2100 UK employers surveyed, 16% expect an increase in hiring, whilst 8% intend decreasing staffing levels. However, the net outlook shows a 10% drop versus the same period last year.

Employers in eight out of the nine industry sectors have positive hiring intentions over the next quarter – the exception being the agricultural sector. And employers in 10 out of 12 regions are forecasting a net increase in staff numbers.

The hiring outlook is strongest in Wales where 25% of employers are planning to take on staff and 5% are planning cutbacks. The weakest outlook is in the West Midlands where 12% of employers intend hiring staff but 14% intend cutting back.

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Universal Flexible Working Rights Ruled Out

Gerry Sutcliffe, the Employment Minister, has ruled out extending flexible working rights to all employees. However, the rights are likely to be extended to carers when the regulations are reviewed next year

Currently only parents with children under six or disabled children aged under 18 have the right to request flexible working and their employers have a duty to consider their applications seriously.

According to the CBI’s latest employment trends survey, employers have accepted requests to work more flexibly in 90% of cases. Some 85% of the firms surveyed offer part-time working, 39% offer flexi-time and 35% offer job-sharing. Over a third of those surveyed offer at lease 3 different employment choices. But over a quarter (26%) said the right to request is now having a negative impact on their business.

Gerry Sutcliffe is one of the speakers at TAEN’s conference on 13th October. Click for details

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Week Starting 5th September

Survey Shows Patterns of Pay Lower For the Over 50s

One of the most enduring myths about older workers is that they earn more. Some may do of course but many, the majority in fact, do not.

The new Annual Survey of Hours and Earnings (ASHE) from the Office of National Statistics shows that median gross weekly wages for full time employees climbs steadily with age but then falls away for those over 50. Last year, the median gross weekly wage was around £465 for those in the 30-39 age band, it peaked at £480 for those in the 40-49 age band – and then dropped to around £420 for those aged 50 and over.

Similarly, the largest increase in median gross weekly wages in the year to April 2004, was for full time employees in the 40-49 age group – it went up be 5.4%. Whilst for those aged 50 and over it went up by some 4.7%.

Some of the other findings of the ASHE survey were that :-