The PSI Blog
29 June 2016
Revenge in retirement? Why the over-65s chose Brexit
Michael White and Deborah Smeaton
Older people – the over-65s – played a massive part in the EU referendum outcome. Without their votes, Leave would have come in a poor second. Many commentators, and many young people, have berated the pro-Brexit older contingent for having taken the economic benefits of the growth years and now denying a similar opportunity to the next generation. But this is to ignore the bitter late-career disappointments that so many of the post-retirement group have experienced. Once the reasons for their bitterness come into focus, their response at the ballot box also can be understood.
Over many years, researchers at PSI have analysed and chronicled the problems faced by older workers. Admittedly, though, we never foresaw or predicted the economic havoc that older workers would be capable of creating with their post-retirement votes. Long-term unemployment in Britain has always been, and continues to be, a special problem of older workers, especially older workers displaced from lower-skilled jobs. In boom years, when unemployment is low, there has still been a tendency for these less-skilled older workers to be pushed into the worst kinds of jobs – temporary, with short hours at low wages, often in contract-labour firms that offer few benefits or protections.
But the problems of the older workers are not limited to any one class. We have found that over a 20-year period, the job satisfaction and organisational commitment of over-45s at every job level has been persistently declining. Why is this?
The media tag, borrowed from academia, is ‘globalisation’. This refers to the opening-up of all the advanced economies, Britain included, to increased international competition and increased pressure from financial markets. This process accelerated in the 1990s, in part as a result of the European Single Market being completed in 1992.
One consequence for the individual employee has been an era of continuous change bringing more work pressure and more strain in its wake. Senior employees had to shoulder this load and forget any ideas of easing off toward retirement. Increased work demands would have been more tolerable if rewards had risen in step. But PSI’s current research establishes that the reverse took place. Older employees’ wages and earnings have been declining relative to younger employees for many years.
For those in occupational pension schemes, this implies a smaller ‘pot’ to take into retirement. Alongside this, the austerity era has ushered in low interest rates that limit the contribution of savings to a retired person’s standard of living. Popular opinion and media comment often view the post-retirement group as somewhat privileged, with their winter fuel payments, their free bus passes and their inflation-adjusted state pensions. Their support for Brexit is then portrayed as delusional.
It is alternatively possible to see the retired employees’ Brexit vote as a type of rational revenge on the corporate bosses and political elites that have unfairly exploited their efforts for the past three decades.
Michael White is an emeritus fellow at Policy Studies Institute and Deborah Smeaton is a principal research fellow at the University of Westminster.