My oldest friend, Steven, who is 55, and whom I have known since primary school 50 years ago, has opted for early retirement. He “took to LinkedIn,” as journalists like to say, to announce—paradoxically, in that media channel for the earnestly career-minded—that he is embracing “economic inactivity.” I have to say he did not sound too distressed when revealing this news.
My friend is hardly an isolated example. Figures from the Office for National Statistics show that between the end of 2019 and the end of 2021, 522,000 people became “economically inactive”—that is, left the labour force but without becoming officially unemployed. Of these, 493,000 (or 94 per cent) were aged 50 or over.
Clearly, a whole range of causes lie behind those aggregate figures. Some may leave paid work to care for a dependent relative, or because of long term illness. The impact of Covid will have made many people weigh up their options for the future—either they are struggling with the after-effects of the virus or have simply reassessed their priorities. But 221,000 out of the almost half a million 50+ economically inactive age group chose retirement, either because they believe they can afford to, or because they have better things to do with their time. According to the Institute for Fiscal Studies, the economic inactivity rate among 50 to 69-year-olds has risen to 36.5 per cent.
This, you may feel, is a quintessential first world problem. And if you are under the age of 40 or so, you might also add that it is a classic Boomer and Gen X “problem” as well. And you would probably be right. It must be nice to be in a financial position that allows you to retire early. It should also be noted that almost 40 per cent of people in their late 50s and early 60s are considering delaying retirement for up to a year as a result of the cost-of-living crisis, according to insurers Legal & General.
On this question, too, there are haves and have-nots.
All the same, it is striking how many grown-up but not old people, especially men, are looking at the world of work and economic activity and saying… nah. Something has happened. What is it?
Economists are concerned. “The steep decline in participation suggests that economists, companies and governments can no longer take it for granted that older men with degrees will stay working, no matter what,” wrote Chris Giles in the FT at the end of May. “Britain isn’t working and this is causing higher inflation, lower growth and worse public finances.”
But of course, GDP growth and the rest of it may not fully command the attention of a solvent 50- or 60-something who has other things to think about. Personal growth, rather than the GDP kind, is what may matter more. Some economists have spoken of a “hedonic treadmill,” a kind of consumerist trap, which keeps many of us working for material gain when we might be happier, if poorer, stepping off the treadmill to enjoy other pursuits. Perhaps “wealth and greatness are mere trinkets of frivolous utility,” as Adam Smith wrote in “The Theory of Moral Sentiments” (1759).
It should not be surprising if one of the consequences of the Covid years turns out to be a general winding down and rebalancing of activity in favour of simpler pleasures, a calmer lifestyle, a more balanced existence. This could be bad news for entrepreneurial activity and the nation’s wealth. For many individuals, it could be a healthy development.
There is another paradox to consider here: the paradox of ambition. Early retirement may reflect a rejection of ambition for material possessions and “the bubble, reputation,” as Jacques calls it in As You Like It. And that, too, could be something to worry about, from a macro-economic point of view at least.
But ambition for personal happiness, for peace of mind, for a more sustainable way of life might all be for the good. Indeed, less consumption and less materialism may be precisely what the planet needs. So, should we leap out of bed in the morning to board the 7.15 to Waterloo in pursuit of promotion and a brilliant career? Or should we quit, have a lie in, and go for a walk in the woods instead? It’s a nice choice to be able to make.
Lady Macbeth understood ambition very well, better than we might like to admit. She knew what was needed to get on in a competitive society. “Thou wouldst be great,” she said of her husband, “art not without ambition, but without the illness should attend it.”
Maybe Covid and lockdowns and economic crises have cured more than a few of us of the illness of crazed ambition. And maybe that isn’t such a bad thing.