Will older Americans save us?
Unless you’ve lived in exile, you know all about “The Great Resignation,” a term coined by organizational psychologist and Texas A&M professor Anthony Klotz. This is the period beginning in 2021 when employees reeling from the pandemic revolted: The number of Americans quitting their jobs exceeded pre-pandemic highs for most of the year, despite the difficulties employers to fill millions of vacancies. For example, according to the US Bureau of Labor Statistics (BLS), about 3% of all workers, or 4.3 million people, left their jobs in December. This was a slight improvement from the previous month, but still problematic given that signs of help being sought are still pervasive across the country.
Meanwhile, thanks to cost-cutting and ageism, older workers were taking the hits they usually take during recessions. According to Boston College’s Center for Retirement Research, in a normal year, one in eight seniors is expected to leave their job; which rose to almost one in three in April 2020 and hovered around one in five for the rest of the year. Additionally, according to the report, “the share of people aged 55 or older who left the labor market during the pandemic increased by a statistically significant 7.6 percentage points.”
A Federal Reserve Bank of St. Louis report pegged the total number of pandemic retirements at 3 million, 1.5 million more than expected in a typical year. All of this happened despite the fact that there was only a slight increase in Social Security claims. This means that older people may call their current reality “retirement”, but they may just be sitting on the sidelines waiting for the right time to return to the workforce, especially those too young to perceive Social Security benefits (you must be at least 62 years old to receive reduced and early benefits and usually between 66 and 67, depending on the year of your birth, to receive full benefits). A possible sign of the desire to continue working among older Americans: The Pew Research Center estimates that 20% of gig workers in the United States, from freelance consultants to Uber drivers, are over the age of 50, and nearly a third of them are over 50 years old. the age of 65.
In summary: the current employment situation looks much less like the pre-pandemic years and much more like the post-World War II period. At that time, America relied on older workers to fuel growth, and by 1950 nearly one in two men over the age of 65 were in the formal labor market.
Can this happen again? Will employers dive in and embrace this massive labor pool?
They should. An AARP-funded report by The Economist Intelligence Unit (now Economist Impact), estimated that the U.S. economy missed adding an additional $850 billion to its GDP in 2018 – “a figure the size of economy of Pennsylvania” – due to age discrimination and the exclusion of older people from the workforce.
Nothing will change, however, unless employers abandon hiring and firing practices that favor young people. A lot of companies, for example, have a problem with ageism. The AARP report found that nearly eight in 10 older workers believed they had witnessed or experienced this bias at work. This is further confirmed by long-term employment data which shows that it takes nearly twice as long for the older unemployed as their younger peers to find work.
The good news: We already know that generational diversity improves business performance, so employers can benefit a lot from creating an inclusive work environment. For example, a 2013 study of 147 German companies, published in the Journal of Management, found higher productivity and employee retention rates, as well as higher profits and growth projections among companies made up of employees. employees of various ages.
In order to achieve this generational diversity, companies will need to change their strategies to compete for talent of all ages with better wages and new benefits, augment their workforce with technologies, support the lives of their workers outside of the office and focus on extending the working lives of all employees through ergonomics and inclusive design.
Employers can incorporate all of these non-insurance benefits, but they won’t mean much to older workers if age biases prevail in the hiring process. Hiring managers, in particular, should remove coded language like “recent college grad,” as well as the required number of years of experience from job postings. They also need to get out of the rut of assuming an older worker is “overqualified,” technologically illiterate, or only going to be around for a few years. According to CareerBuilder, baby boomers spend 1.5 times longer in a job over their working lives than Gen Xers, and about three times longer than millennials.
Policymakers also have a role to play and will need to adapt current social protection programs to prolong working life, as well as provide allowances for lifelong learning. They should offer information and incentives that encourage employers to hire a diverse set of generations in the workplace.
Employers may have no choice but to embrace change when it comes to an older workforce. The labor force participation rate for people over 75 is expected to increase nearly 100% by 2030, according to the BLS. In contrast, the total labor force will only grow by about 5% and the 16-24 age group will likely shrink, thanks to decades of contraction in birth rates.
Maybe that’s a good thing. Research from the Organization for Economic Co-operation and Development shows that countries that provide older people with greater work opportunities could increase their GDP by 19% over the next three decades. Thus, the practice of excluding older people from the labor market no longer makes sense. It hampers operational efficiency, negatively impacts the bottom line, and threatens the health of the economy as a whole.
This is why we need older workers more than ever.
Bradley Schurman is a demographic futurologist and longevity expert and author of The Super Age: deciphering our demographic destiny (Harper Collins). He is the Founder and CEO of The Super Age, a global research and consulting firm, as well as Co-Founder and Chairman of KIBA, an inclusive design company focused on improving the built environment.