Economic Environment | Businesses Facing Rising Wage Costs In Part Due to Shortages of Older Workers

A curious feature of the UK labour market is one factor that is driving up wage and salary costs in many businesses. Huge numbers of older workers have decided to retire early.

As the BBC reports here, Dame Sharon White (the boss of John Lewis) has pointed to the problems caused by shortages in the supply of older workers in the UK.

We're told that "...the UK has seen one million people, mostly in their 50s, leave work since the start of the Covid-19 outbreak in 2020".

Dame Sharon points out that this decline in the supply of people available for work is one factor that is putting pressure on businesses to offer higher pay in order to fill their growing number of vacancies.

Rising employment costs, in turn, are encouraging firms to increase their selling prices, fuelling the growing rate of consumer price inflation in the UK.

Is the shortage of older people willing to work a short-term factor, or will businesses and government need to address it?

This ONS survey of the UK's older employees seems to suggest that few of these older people will be applying for employment anytime soon.

Many have become self-employed and, presumably now enjoy their new work and flexibility. Others retired sooner than they were intending to as they had been made redundant during the pandemic.