The missing 33,000: Where are Sheffield’s older workers?

14,200. That’s the number of people who are unemployed in Sheffield. It’s a rate of roughly 5%, and — while no-one wants to be unemployed — it’s fairly low by the standards of living memory. After all, back in 1991, over 18% of Sheffield’s men were unemployed.

But this article isn’t principally about the unemployed. Instead, we’re examining a group that’s about six times as big — the “economically inactive”. Whereas “unemployment” (the more commonly used term) refers to those who aren’t working currently but are looking for a job, the economically inactive aren’t trying to get into the labour market at all — they’re retired, students, sick, or have given up altogether.

In Sheffield, economic inactivity rates have fallen compared to the start of the pandemic — the job market has been strong while the cost of living has been rising, increasing the incentives to work. But look closer, and one group visibly bucks that trend — the 50-64-year-olds. There are now 33,000 of them — roughly three in ten people of this age.

What explains the opposite trajectory for older workers?

One possibility is early retirement. There were many reports during the pandemic of people realising they no longer needed to work and choosing to stop. L&G, a company which manages much of the UK’s pension wealth, has reported that 1.3 million people nationwide brought forward their retirement plans because of the pandemic (though many others had to put theirs back, raising concerns of “retirement inequality”).  

Just over 9,000 people under 65 have retired in Sheffield (about 600 more than before the pandemic). I spoke to Helen Matthews, 55, who retired ten years ago from her public sector role. At this point, “the menopause hit like a ton of bricks”. Work wasn’t able to support (“they tried to nag me better”), and with a relatively generous pension, she realised she could leave. She knows many who have left, wanting to do “anything to get out of the workplace — the pace is unsustainable”. So that gives us about a quarter of our 33,000 — but also suggests early retirement isn’t a big part of the story here.

Much more likely, the rise is down to a bigger group — the long-term sick. There are 10,000 more people out of work in Sheffield for this reason since Covid struck. Across all age groups the long-term sick makes up about a third, but we’d expect much — if not most — of that to be among the 50+ group. Health outcomes generally worsen with age, and this seems the likeliest explanation for why the line has gone in the other direction for this group.

This might also explain in part why economic inactivity rates among the over-50s are higher in the less affluent centre and east of the city, where health outcomes tend to be poorer.

I speak to Professor Jennifer Roberts, at the Department of Economics in the University of Sheffield. Her research background focuses on the interaction between health and economic outcomes in people’s lives, but any hopes I had for easy answers are quickly dashed. “These things are so closely correlated,” she tells me, “but when you try to look at the causal direction it’s very complicated because they’re all tied up with each other.” She agrees that there is an increase in the number of older people economically inactive with health problems, though some of these people were previously inactive for other reasons. There’s an ongoing academic debate about how much the rise in benefits claims linked to mental health conditions — now the biggest health reason people are out of work nationwide — is due to a genuine worsening in mental health, and how much is recognising what was there all along. 

While Professor Roberts believes it’s too soon to know what the long-term impact of long Covid will be on the labour market, it is clear that healthcare resources have reduced in the pandemic, with major backlogs in testing and procedures. She also notes that the disability employment gap (the gap in the employment rate between those who are and aren’t disabled), which was narrowing before the pandemic, has stopped doing so.

These health issues have clear costs for those unable to work. But it also costs the economy — by diminishing what economists call the “stock of human capital” (and they wonder where the “dismal science” moniker comes from). Fewer people able to work means we produce less, there’s less money in pockets, and local high streets and businesses suffer. Scale that up across the country, and ill health costs the government roughly £50 billion a year — money that public services are sorely in need of.

This conundrum is becoming more vexed as the population ages. Between the early 1990s and the present day, the over-50s grew from a fifth of the workforce to almost a third — a trend set to continue. Finding ways to bring those outside of the labour market back in is becoming increasingly urgent.

Of course, the data we’re looking at parcels people up into neat categories (retired, sick, etc.) but personal stories are rarely tidy. Joanna Hastings, 64, moved back to the UK from Michigan, where she raised her children before working as a teacher and headteacher. She settled in Sheffield in 2019 due to the winning combination of hills, culture, friendliness, and affordable housing.

She began by doing some supply teaching, but that came to an end when the pandemic closed schools down. Since then, she’s realised that she no longer wants to teach and is spending time working on a novel, as well as picking up a small amount of work in editing (“it’s very low key”, she tells me). It’s hard — she doesn’t yet have the networks here to grow the editing work, and finds her financial situation stressful. But, she concludes: “A lot of it is worth it, just for me to be living on my own terms. It means a lot to me… I would rather eat beans on toast and have my freedom at this point.”

Keen to understand the support that exists for those who are out of work and don’t want to be, I spoke to Lynsey Golland, who has worked with those in this situation for over 20 years. She’s a senior manager at Zest, in Upperthorpe, which provides employment support alongside volunteering and local exercise facilities.

Lynsey explained to me that for many older people out of work, the six-month mark is key. After that period of inactivity, she says: “They start doubting themselves. They start thinking: it’s my age.” A lack of work can cause health problems, such as depression and pain. Those with caring responsibilities find that many job opportunities just aren’t practical. “There are jobs”, she notes, “but they don't necessarily meet the needs of individuals”. And once money begins to run short, other problems stack up: not being able to catch the bus, not being able to put money on the phone, not being able to stay warm. “It’s mentally draining.”

On some small level, I can relate to this. I recently spent a couple of months not working, and even in that short time went through the cycle of initial motivation, applying for jobs, exercising and taking up new hobbies; followed by a slowing down and a dissolution of my self-imposed routine. The loss of the structure and social contact that work provides can be numbing.

Zest’s approach is to try to reverse that spiral. They involve people in volunteering opportunities, which can be the first step to creating routine and community. People have a reason to get up and get out, and feel a sense of belonging — which becomes a surer foundation on which to build.

This gradual, supportive, approach is likely useful, given that most of Sheffield’s economically inactive have not worked in the last 12 months. Indeed, research suggests that older people (over-50s) are more than twice as likely to be unemployed for two years or longer if they lose their job. Those who haven’t worked for years face a growing skills gap — their skills deteriorate, while the level of IT know-how required in most jobs ramps up. Zest reports that most of the support they provide is in IT skills.

Sheffield’s economically inactive population, by when they last worked

The challenge might be getting harder. The number of job vacancies in the UK is beginning to fall. Rumours of a possible recession continue to swirl. If over-50s are out of work when jobs are relatively plentiful, they’ll find it much harder if the competition intensifies.

The final reason this matters: pensions, the biggest determinant of the standard of living someone will enjoy in their old age. The amount of wealth people have in their pension pot curves upwards throughout their working life, meaning those later years are crucial. If people can’t work in their 50s, they will spend their 60s, 70s, and 80s in much less comfort.

For some, the decision to stop working early is a choice. But for most of Sheffield’s 33,000, that’s not the case. The evidence we have suggests that health conditions are keeping many older workers out of the jobs market. Most have now not worked for at least a year — meaning there might be several barriers to overcome in getting them back into jobs.

Why does this matter? Why shouldn’t we just let people retire early? Yes, there’s the economy — which needs all the help it can get right now. But I’d argue the human cost is much higher than the equivalent pounds and pence. We may not always love to work. But work gives us contact with other people and a daily routine, something which becomes increasingly vital the older we get.

Whether due to divorce, empty nest syndrome, declining health or being widowed, older people can become isolated — Age UK found in a 2018 report that if changes aren’t made, by 2026 there will be two million people over 50 in England who will often feel lonely. Being employed can give people a sense of purpose — a purpose that sometimes felt missing from my own life in those two months away from the office. Yes, these figures suggest a huge challenge for local agencies — but I’d argue this is a challenge too important to remain unsolved.

If you are looking for support to get back into work in Sheffield, a list of organisations is available here.