There are 354,000 more people aged 50+ in employment since the recession (including 182,000 more 65+ year olds), but 568,000 less people aged under 25 in employment. There was an 8.7% rise in employment amongst those aged 65+ during the recession. On average, someone aged 16-24 lost their job every 111 seconds during the recession.
The Office for National Statistics defines a recession as two straight quarters of negative GDP growth. The last recession in the UK lasted 18 months (6 quarters) and occurred during the first three quarters. This is shown in the graph below (courtesy of the BBC).
The ONS categorise people as:
- Economically active (split into two categories: employed and unemployed i.e. looking for work or available to work in the next two weeks)
- Economically inactive (i.e. not looking for work or not available to work in the next 2 weeks)
We analysed the impact of the recession from its start in the second quarter of 2008 to its end in the third quarter of 2009. We looked at the impact on all three measures because focusing on any one in isolation can give a misleading picture. Using all three can reduce this and ensure an analysis is reliable.
The results of our analysis are below.
The results show those aged 16-24 were clearly the hardest hit by the recession. People in this age group suffered the largest percentage decreases in employment and the largest percentages increases in both unemployment and economic activity.
Focusing now on the employment figures in order to see which age groups the jobs were going to, we can see that, there were 693,000 people aged 65+ in employment when the recession began in April-June 2008. By the end of the recession in July-September 2009, this number had increased by 60,000 (nearly 10%) to 753,000.
ONS statistics for the most recent month in show that there are now 875,000 people aged 65+ in employment, an increase of 182,000 since the recession began. The recession appears to have had no effect on the growth in older employment levels. By comparison, it had a terrible effect on younger people aged 16-24. Youth employment figures were already falling before the recession, but plummeted when it started to bite.
Our analysis shows that there were hundreds of thousands more people aged 50+ in employment at the end of the recession than at the start. Older people did not suffer joblessness as much the younger people that bore much more than their fair share. However, what is not obvious from the data is what sort of employment the jobs that went to older people involved. These may have been menial, low level and low paying jobs.
But, whilst older people may not have suffered as much unemployment as younger people, they suffered in a different way as £400bn was wiped off the value of pension funds. The pension pots of older people were very close to maturity and were decimated by the financial crisis. The pension funds of younger people were also hit, but they will have much more time to recover the losses. Older people therefore face retiring on a much lower pension than they had planned.