The boss of John Lewis has said that the 1 million mostly over-50s who left their jobs during the Covid pandemic should be encouraged back to work to tackle the labour shortage that is pushing up inflation and wages.
Dame Sharon White, a former second permanent secretary at the Treasury and chief executive of media and postal regulator Ofcom, said she had never seen such a difficult economic situation facing businesses.
“One area that I think has not had enough attention is what has happened in the jobs market over the last 18 months,” she said, speaking on BBC Radio 4’s Today programme on Tuesday.
“Regardless of what is happening coming out of Covid, if the labour market is that tight, if we continue to have far fewer people in work – or looking for work – you have inevitably got more inflation and wage inflation.”
About 1 million people in the UK have left work since the start of the pandemic in March 2020, with retirement the most popular reason given by people aged between 50 and 70, according to the Office for National Statistics (ONS).
“We now have 1 million fewer people in work,” said White, the chair of John Lewis Partnership, which also owns the Waitrose supermarket chain. “Some think about it as the ‘great resignation’. I think about it as the ‘life reappraisal’ because this is predominantly people in their 50s.”
Inflation is at a 40-year high and is forecast by the Bank of England to hit 13%, with the UK predicted to fall into a recession by the end of the year.
At the same time, job vacancies are at a record high – but with fewer people seeking work, employers are under pressure to raise wages and salaries to attract and keep staff.
“There isn’t a business in the UK that is not finding it very difficult to recruit at the moment because there are so many more jobs and far fewer people looking for work,” she said.
White said that the government needed to focus on how to get some of those retirees to return to the workforce, even on a part-time basis.
“I guess I would encourage any government to really think much more about how do we encourage more people back into work,” she said. “Maybe it is flexible retirement to allow more people to combine more time outside work but more time in work. One million people out of the labour market has profound long-term implications and I’d like there to be more of an open debate.”
