The Department for Work and Pensions (DWP) has snuck out new funding for social security claimants. It’s also changing part of what the department expects of people over the age of 50. Some of this could include sanctioning claimants if they don’t comply. But, the move is little more than a knee-jerk response to a labour market crisis. The whole thing is likely a mess in the making, partly thanks to the DWP.
DWP: ‘supporting’ older people via sanctions
On Monday 4 July the DWP announced it was ‘investing’ £22m to ‘tackle unemployment’ among the over-50s. It said it was spending this on:
- “More one-to-one support at jobcentres”.
- Dedicated “50PLUS Champions” to “work with local employers to help them realise how their recruitment could benefit from the talent of older workers”.
- “Mid-life MOTs… targeting those thinking about retirement… to take stock of their skills and finances, and consider taking jobs that could boost their incomes”.
The DWP is also pushing its Restart Scheme as part of this package. This is where the DWP is contracting private and third sector providers to give 12-month employment support packages for some claimants. But as the Guardian reported, so far it has been an abject failure. 93% of people on the scheme have failed to find work. Yet within this, the DWP is allowed to sanction claimants for non-compliance with the scheme. It would also be able to do this for the over-50s who will receive its increased “one-to-one support at jobcentres”.
A “huge asset”
Despite this, employment minister Mims Davis said of the plan for the over-50s:
Older workers are a huge asset to this country, and there are currently more than 400,000 over 50s in roles than before the pandemic.
We’re increasing funding and support at every step of their journey up the career ladder, to ensure everyone gets the support they need to get into work, progress and use their experience to boost their earnings and plan for a better future. Helping people find the security of a stable income, through a job they can take pride in, is also one of the best ways for people to support their families during these challenging times.
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Of course, the reality is that the DWP’s new plan is less about supporting people and more about a crisis in the UK labour market.
A labour market crisis for the government
Economic inactivity is where a person is neither in work or looking for a job. As the Institute for Fiscal Studies (IFS) found, the rate of this among 50-69-year-olds increased during the pandemic. It also noted that:
43% of the overall rise in economic inactivity in the UK population since the pandemic began has been driven by changes among 50- to 69-year-olds.
So, more older people are retired or not working. Also, employment rates are still lower than before the pandemic. So, the government faces a problem – because less people in work means less disposable income and less tax revenue.
Then, there is the issue of young people’s employment. As a parliament research paper noted, youth unemployment is at its lowest level for decades. But;
it is worth noting that the total population aged 16-24 increased slightly in the year to February-April 2022, but overall it has been declining in recent years.
So at one end of the scale you have less young people to work. And at the other end you have more older people not wanting to work. But what of the future?
Falling birth rates/failing capitalism
The government is also facing a future working population problem. In 2020, birth rates fell to their lowest level since before WWII. This is a decline that has been ongoing since 2013. But as The Canary reported, the drop isn’t balanced. Between 2013 and 2016, birth rates for the richest people actually increased – while they fell for the poorest people.
Then, between 2017 and 2019 birth rates across all social grades fell. But the biggest declines were for the poorest people. As The Canary reported, this was coupled with an increase in abortions for the poorest people – most notably those with two or more children. It is possible that all this is directly linked to the DWP’s own two-child limit policy on social security payments.
The point being overall that the UK is currently an aging population – with the DWP potentially making it worse via its own policies. This in turn is leading to a crisis for capitalism. As Aaron Bastani wrote for Novara Media:
Capitalism, a system based on permanent growth and profit, can’t sit alongside societies increasingly marked by demographic ageing. Necessary returns on investment require decent-sized working age populations and a ceiling on ‘dependents’.
DWP: work until you drop
So, the DWP’s response to this is to try and push more older people into work. Not only is this amoral – given many of these people may be chronically ill, disabled, or thinking they’d be retiring in their 60s – but it’s also a sticking plaster on a broken leg.
Instead of forcing more people into work to try and plug a systemic leak, politicians should be looking at the way we all work to adapt to our changing population – for example, a four-day working week and a real living wage. But instead, the DWP (whose policies may lead to an even greater crisis in the future) is crudely trying to fix this. As always, it’s the poorest people who will be hit the hardest, due to capitalism’s failings.
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