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The revenge of the over 50s

Britain’s metropolitan liberal class is getting exercised about airport delays ahead of the Easter break.  Pent up demand after two years of lockdown and, one suspects, many people having one last holiday in the sun, have run headlong into labour shortages.  And while one can have sympathy with passengers having to navigate airport chaos – many, whether they realise it or not, will be going abroad for the last time – in reality they are paying the price of the cheap-flight business model which made air travel available to the masses in the first place.

Even with the rising price of oil – and thus the rising price of aviation fuel – airline’s biggest cost centre is their wage bill.  And it is this, historically, that airlines and airports have screwed down in order to keep flights affordable.  In the heady days prior to the pandemic, when the UK was awash with cheap labour, wages could be held to a minimum.  But during lockdown, large numbers of workers realised that their low-paid jobs were simply not worth doing.

The resulting labour shortages have been referred to as “the great resignation” or “the great lie down.”  But the situation is more complicated than former workers opting to take to the sofa to watch Netflix instead of working.  Even during the lockdowns, lower-paid younger workers opted to retrain and secure better paid work.  This has accelerated since the restrictions ended.  And so, it was not so much that lower-paid workers opted to lie down, but that lower-paid workers became higher-paid workers while nobody else was available to fill the low paid jobs which they left behind.

The two groups which might have been expected to take up the slack – overseas workers and older workers – have disappeared in large numbers.  As Mark Duell at the Mail Online reports:

“The phenomenon dubbed ‘The Great Lie-Down’ has seen 400,000 workers permanently leave the workforce, according to the Office for Budget Responsibility (OBR).

“Some 210,000 of those can be accounted for by a ‘higher inactivity rate’ among those of working age, which is ‘largely the result of more early retirements and a greater prevalence of long-term sickness’ after the pandemic.

“And the other 190,000 of the figure is due to foreign-born workers leaving the UK during the Covid pandemic and Brexit making it harder for new European Union immigrant workers to enter the country, according to the OBR.

“Meanwhile experts at research consultancy Capital Economics have also found that the rise in inactivity has been ‘primarily concentrated among those over 50 years old, with the spread between men and women fairly even’.”

Part of the problem is that the regions where vacancies are high are not the ones where there is an excess of workers.  London, for example, has seen a 75 percent increase in vacancies – mostly in jobs which pay too little for an employee to afford to live in the metropolis.  And with fuel prices rising remorselessly, the days when cities like London could rely on a workforce from its “commuter belt,” are fast coming to an end.

Today’s over-50s are not the baby-boomers who enjoyed retirement on generous final salary pensions.  Rather, they are Gen-Xers who had less generous private pensions.  They are also a group who were disadvantaged by crises at either end of their working lives – leaving school into Thatcher’s de-industrialisation, and contemplating retirement in the wake of the pandemic lockdowns.  With few exceptions, when these older workers lost their jobs, they found it all but impossible to secure jobs in an economy which values youth.  And so, during the post-2008 depression, many cashed in their pensions early – even though this meant a much lower return – and found ways of eking out a living from various temporary, part-time and gig work together with various side-hustles.  And during two years of lockdowns, many more swelled these ranks.

Even with pay rises at the lower end of the employment market, inflation renders these jobs less lucrative with every passing month.  And since the very act of having a job comes with a series of costs such as travel, work clothes, lunchtime meals, and various stress-alleviators such as drinking alcohol, smoking, and working out, those who have already de-facto retired have little incentive to return to the workforce.

In the not too distant future, of course, none of this is going to matter.  Airports are going to get a lot quieter as people’s ability to pay for holidays abroad evaporates in the face of the rising price of essentials like food, utilities and fuel.  At the same time, as more and more businesses are unable to pass their increasing costs on to hard-pressed consumers, there will soon be plenty of newly unemployed workers to go around.  Soon enough, the great lie down is going to morph into the long dole queue.

As you made it to the end…

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