The John Lewis boss said the million people, mostly over 50, who quit their jobs during the Covid pandemic should be encouraged to return to work to tackle labor shortages work that pushes up inflation and wages.
Dame Sharon White, former second permanent secretary to the Treasury and chief executive of media and postal regulator Ofcom, said she had never seen such a difficult economic situation facing businesses.
“I think one area that hasn’t received enough attention is what’s happened in the labor market over the past 18 months,” she said on Tuesday’s Today show. BBC Radio 4.
“Regardless of what happens coming out of Covid, if the labor market is so tight, if we continue to have far fewer people working – or looking for jobs – you inevitably have more inflation and wage inflation.
Around 1 million people in the UK have left their jobs since the pandemic began in March 2020, with retirement being the most common reason given by people aged 50 to 70, according to the Office for National Statistics ( NSO).
“We now have 1 million fewer people at work,” said White, chairman of John Lewis Partnership, which also owns supermarket chain Waitrose. “Some see it as the ‘great resignation’. I see this as a “life reassessment” because it’s mostly people in their 50s.
Inflation is at its highest level in 40 years and the Bank of England expects it to hit 13% as the UK is expected to fall into recession by the end of the year.
At the same time, vacancies are at an all-time high – but with fewer people looking for jobs, employers are under pressure to raise wages and salaries to attract and retain staff.
‘There isn’t a company in the UK that isn’t having difficulty recruiting at the moment because there are so many more jobs and so many fewer people looking for work,’ said- she declared.
White said the government needed to focus on getting some of those retirees back into the workforce, even on a part-time basis.
“I guess I would encourage any government to really think more about how to encourage more people to go back to work,” she said. “Maybe it’s a flexible retirement to allow more people to combine more time off work but more time on the job. One million people out of the labor market has profound long-term implications and I would like there to be a more open debate.