A wave of early retirees are fuelling wage inflation according to [1] Dame Sharon White, the boss of John Lewis.
The Great Resignation was not a myth and it’s contributed to the tightest UK labour market [2] in 50 years.
And White told the Today programme that the missing workers are “predominately people in their 50s” and that she would: “…encourage any government to really think much more about how we encourage more people back into work.”
This isn’t working
Mein Gott! Are happy early retirees [3] about to be caught in a crossfire of high inflation and social coercion?
Will we be forced at bayonet point to do routine data entry tasks, buy caramel lattes, and participate in thought showers in government re-orientation camps?
Probably not. Only 28% of White’s missing 50 to 59-year-olds dropped out of the workforce in order to retire, according to the ONS [4].
Rather it seems the pandemic itself, stress, caring for others, illness and disability, and being made redundant all featured strongly in the lives of those who bolted for the exit.
And while the over-50s’ economic inactivity rate has certainly spiked in 2021, it’s only gone back to 2017 levels:
[5]Source: ONS [6]. ‘Movements out of work for those aged over 50 years since the start of the coronavirus pandemic.’
The data Jedi at the ONS show that the over-50s actually increased their economic activity rate every year from 1971 to 2020.
The pandemic was the turning point.
So perhaps it’s premature to pin the blame for inflation on a section of the workforce who were vulnerable to Covid and may yet come back.
The Institute for Employment Studies says that worker shortages are already easing [7]. It also points out that the double whammy of Covid and Brexit [8] has robbed firms of their ability to react swiftly to changes in demand.
We’re getting a more rounded picture now, eh?
But White does strike a nerve because retirees and aspiring FIRE-es know that endemic high inflation can undo [9] their best-laid plans.
Gonna make you sweat
So let’s say your FIRE [10] (Financial Independence Retire Early) sums stop adding up.
Could you face going back to work? What would be your terms?
It’s worth all retirees thinking about this. Call it a backup plan [11].
I’ve already confessed [12] that strictly speaking I didn’t stop working after I called time on my career.
Monevator doesn’t write itself you know. (Not until Blenderbot [13] gets a bit less lippy anyway.)
I still consider myself retired, but I make some pocket money from my writing hobby.
And here’s why that little bit of work has proven to be a good thing:
- I work when I want.
- If I don’t want to do it then I don’t have to.
- I enjoy the challenge.
- It utilises a skill that would otherwise rust.
- It helps me feel slightly useful.
- I get positive feedback. Sometimes.
- I enjoy the community – both interacting with the Monevator massive [14], and working behind the scenes with site founder TI to ensure Monevator remains a cult success that never hits the big time. (Coz money is for sellouts, yo!)
Let’s not forget the traditional work negatives that no longer apply either:
- No commute.
- No chronic stress. Only positive eustress [15].
- No corporate BS.
- No politics. Bar TI’s need to be addressed by his full Monevator job title: Grand Supreme Presidente of Awesomeness for Life.
The point is I didn’t FIRE so I could nod off to sleep in front of daytime TV. And I’ve still got plenty of playtime left to do other things.
But the transformation in how work feels post-FIRE is akin to escaping an abusive relationship, and realising that it doesn’t have to be that way.
I want you back
Others have gained a fresh perspective on how employment should be designed, as the ONS uncovered when it quizzed [4] some 50-to-70 year olds who bailed during the pandemic.
Fully 58% of the 50 to 59-year-olds would consider going back to work! And 31% of the 60 to 70-year-olds are open to returning.
Here are the carrots a prospective employer would need to dangle:
[16]Source: ONS [4]. ‘Reasons for workers aged over 50 years leaving employment since the start of the coronavirus pandemic.’
The top three temptations all offer up more flexibility. Not a surprise.
These wise old retirees probably aren’t going to be selling their soul to Goldman Sachs anytime soon. They want a job that works around their life, not one that rules it.
Only 9% of respondents said they wanted to return full-time.
Here’s why they might make a comeback:
[17]Source: ONS [4]. ‘Reasons for workers aged over 50 years leaving employment since the start of the coronavirus pandemic.’
Money is always a temptation, but it’s interesting to see how many would go back for social reasons (54%) or to improve mental health (35%).
On the income side, the benefit of bringing in a few quid now while I’m vulnerable to sequence of returns risk [18] is overwhelming versus the nightmare scenario of struggling to make ends meet in my eighties.
Still we needn’t speculate about the incentives retirees need to work because one country is already way ahead of us.
The Land of the Declining Birth Rate
The fuse on Japan’s demographic timebomb has already burned down to the detonator. It has responded with reforms to coax its older citizens back to work.
Apparently with some success [19]:
[20]The dystopian version of this would be chain gangs of octogenarians cleaning toilets for minimum wage, 60 hours a week.
I can imagine that happening in the US. But the stories I’ve read about Japan’s ‘Silver Jinzai’1 [21] are generally more heartwarming.
There’s the 70-something [22] who teaches English to primary school children. He keeps the kids entertained with his silly voices and by acting out the roles in the English-language stories he reads to them.
Or the ex-finance worker who helps out at a support group for people with disabilities. Kasa [23] sounds like she has life sussed:
“In order for me to have a meaningful life, I decided to start a job where I would be able to help other people. I don’t have any special skills, but I always work with a compassionate heart.”
The Silver Jinzai aren’t working for big bucks. But it doesn’t sound like it’s about the money anyway.
They’re making a difference. To themselves and others.
Take it steady,
The Accumulator
- Silver Human Resources. [↩ [28]]