Remember Neets, the mainly-young people who are ‘not in employment, education or training’? A decade ago they were seen as a group which had grown at alarming speed during the economic crisis on 2008/09. Many older people, by contrast, were continuing to work for longer, possibly as a result of their pensions having diminished in value. Following Covid, however, the profile of the working population has changed sharply again. Your typical Neet now is not a school-leaver who has failed to find anything useful to do with their lives – it is a professional aged 50-70 who has decided to throw in the towel prematurely.
The number of people counted as economically inactive by the Office of National Statistics grew by 522,000 between October – December 2019 and the same period in 2021. Remarkably, 94.4 per cent of this change was among the over-50s, with professional occupations the single biggest contributor. The number of 16-19 year olds recorded as economically inactive, by contrast, is back to similar levels as before the pandemic.
For those who are in work, the wages boom of 2021 has come to a shuddering halt
The ‘economically inactive’ are not quite the same thing as Neets – they are a group which is not looking for employment, or claiming unemployment benefits. They are people who have decided voluntarily to remove themselves from the labour market, and are therefore a subset of the Neet population.
Why are they inactive? The ONS has not interviewed them in great detail to find out, but it has elicited that ‘retirement’ was the reason for people moving into economic inactivity in 47 per cent of cases. It is not hard to guess why so many have decided to bring forward plans for retirement: thrown into lockdown and working from home, they gained a taste for retirement and perhaps realised, too, that they could get by on less money than they might previously have imagined. When the time came to return to the office or other workplace they opted for a life of leisure instead. Moreover, investments have done rather well over the course of the pandemic – at least until the Ukrainian crisis. It has been easier to contemplate early retirement than perhaps it was following the 2008/09 crisis.
Interestingly, one of the victims of the pandemic has been the previously strong growth in self-employment. The number of people in salaried employment, at 29.7 million, is at a record high, although overall employment is still down on pre-pandemic levels. The gig economy seems, for now at least, to have stalled.
For those who are in work, the wages boom of 2021 has come to a shuddering halt. Regular pay is up 3.8 per cent on the past year and total pay (including bonuses) is up 4.8 per cent, but when you take into account inflation, regular pay is down one per cent and total pay is just about in positive territory, rising by 0.1 per cent.
In contrast to during the pandemic, when many public sector workers were able to continue to draw full wages, private sector workers now have the upper hand – private sector pay is up 5.3 per cent over the year, compared with 2.4 per cent in the public sector. Anyone who wants a job, or who wants to change jobs, will still find themselves in a buyers’ market: job vacancies stand at 1.318 million, up 105,000 on the quarter.
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