In the US today the 65-69 age group are more likely to have jobs than teenagers. The percent of teenagers working has dropped from 42% to 31% in the last 20 years.
Last week I looked at working later in life from the prospective of the employee. Today I will look at the same issue from the perspective of the firm.
A Five Minute Read
US data shows that between 2000 and 2020 the share of all employed workers accounted for by the over 60’s doubled. It went from 7.4% of the working population to 14.8%. Those are the male numbers. Women over sixty represented only 6.3% of all working women in 2000. It is now matches the men at 14% according to the US department of Labor. The same increase has happened across all older age groups. It is not just the 60-69 year olds. Only the percentage of the workforce accounted for by the over 80’s has plateaued.
The latest international figures for 2021 measure the percentage of the workforce that is over 65. They show Japan at the top. 13.6% of the total workforce is over 65. Korea follows close behind at 13.0%. After that comes the USA; Mexico; Canada; UK; and Germany. Countries like France and Spain are at 1.6% to 1.3%.
The Drivers of the Ageing Workforce
The increasing number of older people in the population accounts for only part of the growth. The workforces around the world are growing faster than their populations. As we saw last week, older peoples’ propensity to work is going up. This can be due to the financial pressures of retirement or to a desire to stay occupied.
The ageing workforce is presenting an increasing challenge for firms. Workforce planning is more difficult. Across most age groups the participation rates are declining. People are less inclined to be employed. Remaining in education is depressing the under 25’s. More people are realizing the need for qualifications. The availability of waiters and waitresses is more and more dependent on immigrants. The available pool of workers to hire at most ages is shrinking.
Between 2000 and 2019 it is only after the age of 55 that the US propensity to be employed increases. The “hockey stick” comes after 60. There has been a 28.7% increase in male participation between 60 and 64. This accelerates to a 63% growth between 70 and 74 and 111% over 80. For women the growth is even bigger in the early years . It increased by 115% at 60-64 but this drops to 26-47% growth rates thereafter.
Where Are All these Older People Working?
In terms of occupations there are differences between US men and women. The over 70’s men are most likely working in specific sectors. These include: Legal; Community and Social Service; Financial; Education, Training & Library and Healthcare. There is some overlap with women over 70 . They can be found working in sectors like Office Support or Art, Entertainment & Media. They too work in Community & Social Care and Education, Training & Library. The pattern is not perfect but most people carry on with their pre-retiement roles. They tend to come from higher income brackets.
About half of older US workers are part time and 25% are “self-employed”. Of the self-employed half are independent contractors, freelancers, independent consultants. Many have been hired by their previous employers.
What Does this All Imply?
More and more older people are capable of working, They can work until older ages. Mentally and physically they have the ability to contribute productively to the economy. Working is one of the primary sources of self-identity. A job means an income which in turn means a better standard of living. This in turn means that we can continue to be “consumers”. We can socialize and be independent.
There is a “dark side” to the story. Pensions may not be sufficient. Cost of living rises may drive people back to work to survive. The 7-11 stores in Japan stay open for 24 hours a day. The company has found a source of employees willing to work the late shift. These are older, especially single, people. They leave their single person homes. In exchange they get a heated environment, company and a salary. The situation is not all bad. In a recent survey 70% of Japanese over 80 said they felt financially secure.
What does it mean for Firms and Ageism?
Much of the focus on ageism has been on employment. Legislation and campaigns have focused on reducing workforce age discrimination. Changes have been made across the human resources processes. Changes have been made to recruitment and to development & training, salary benchmarking and all other areas including promotion policies. This has been very much a “push” strategy. Firms have complied rather than engaged.
What happens when 13% of your total workforce is over 65? Employers will have to create jobs that are more attractive to older candidates. They need flexibility. They need to work part time. A push becomes a pull.
There will be a natural pressure on workforce ageism. We know that proximity reduces all forms of discrimination. The more you work with an older group, the less likely you are to hold negative stereotypes about them. The less you will discriminate against them. You learn to value their contributions which may be different to your own. They may have done the job longer than you. They have valuable expertise and wisdom.
What happens to ageism in general when the only source of new employees are the groups over 60 or 65? There will also be a natural pressure on all other forms of ageism. More older people working and contributing will change the stereotype. More older people respected for their contribution must impact younger people. It will change what they think of the “old”. At some point soon, people over 65 will represent over 20% of the total workforce. They will commute with everyone else. They will lunch with everyone else. They will “drink after work” with everyone else. This is bound to impact ageism positively.
The financial security is definitely a deciding factor. As I approach 65, I realize that I still have so much to offer however, one of my concerns is the technology gap between the over 65 and the younger workers. We just have to keep up!