Future of Work and Retirement Key Concern for an Aging Nation

Article excerpt

I put 34 years into this firm, Howard, and now I can't pay my insurance! You can't eat the orange and throw the peel away-a man is not a piece of fruit.

-Willy Loman in Arthur Miller's Death of a Salesman

No longer is it just Disney toys and Nike shoes made in Haiti and Indonesia, it's software engineering, accounting, and product development [jobs] being "outsourced" to India, the Philippines, Russia and China.

-Stacey A. Teicher, The Christian Science Monitor, July 29, 2003

Increasingly, the "answer" given to the question of what to do about population aging and rising pension costs is to encourage or penalize older people so that they work longer. Many people argue that government and employers must make sure policies and practices do not encourage people to leave the workforce prematurely. It is taken for granted that the age of eligibility for public and private pensions must increase, and employers are expected to hire additional older workers.

Such prescriptions, however, contrast sharply with past declining retirement ages and past and current employer practices of getting rid of older workers as early as possible. Workers were liberated in the 20th century from long years of employment-often years of drudgery. But now the boomers are being told that policies encouraging retirement at an early age must change. Instead, "old folks" should continue working (or go back to work).

The Economist magazine editorialized in November 2005 that "it is up to [future] individuals to make the most essential change of all: to accept that early retirement was an historical aberration and to prepare for longer working lives. Their priority must be to remain employable. This will mean a greater willingness to invest in themselves, ensuring that they keep their expertise and skills up to scratch. It will also often mean accepting lower wages if their productivity does decline."

Is this the solution to the growing costs of Social security and the declining role of pensions? Clearly, to answer this question one needs to know more about the origins of unemployment, the reasons why retirement ages have dropped dramatically and the views of employers regarding the employment of older workers. In particular, this issue concerns workers who have reached middle age and those approaching retirement age (generally, the 45-10-64 age group). That is, we are talking about the behavior of boomers and older workers in general prior to their retirement years.

A NEW PARADIGM

The World Health Organization (WHO) stated in its publication "Health and Ageing-A Discussion Paper," written for the 2002 U.N. World Assembly on Ageing, "It is time for a new paradigm, one that views older people as active participants in an age-integrated society and as active contributors.... [The paradigm should challenge] the traditional view that learning is the business of children and youth, work is the business of midlife, and retirement is the business of old age."

Future attitudes toward retirement are likely to (and should) move sharply away from the simplistic view of all work before retirement and no work after. As William Novelli, executive director of AARP, recently noted: "The economic foundation for retirement was the traditional three-legged stool," referring to Social security, a company pension and voluntary savings. He continued, "That model is out of date and rickety. Today, boomers, and those slightly older, view retirement not as a termination, but as a transition. In response, we need to rethink work and retirement together."

This aging nation can expect to see a number of changes:

More Part-Time Work. At the same time that rates of retirement have increased, the number of older workers who are employed (or want to work) part time has shown a large increase, according to AARP'S report, "Staying Ahead of the Curve 2003: The AARP Working in Retirement Study."

Although surveys of boomers approaching retirement find them looking forward to more leisure, hobbies, time with their families, and so forth, AARP policy analyst Sara Rix showed in The Gerontologist (June 2006) that boomers also overwhelmingly insist that they expect to work in retirement. …