AGE discrimination in employment and the extension of working life are now high on the agenda of governments and, increasingly, of business, both driven by cost/benefit considerations.
Global ageing is a fact and the populations of the developed economies are the oldest. Yet against this trend, most countries - Japan being an exception - have experienced a significant decline in labour force participation rates among mature-age workers (those aged over 50) over the past 25 years.
Governments are now concerned about the escalating costs of supporting a growing inactive older population. Businesses chasing a shrinking pool of young skilled labour face an increasing wage bill if they are to compete in the labour market.
They also risk having a workforce which, in its composition, does not reflect that of the population as a whole – with the possibility that they will lose touch with the needs of their, increasingly older, customer base, who will also be demanding a different type of service and product.
For both government and business, population ageing presents a number of challenges.
Massive economic restructuring has been a feature of most industrialised economies over the past two decades and has frequently involved getting rid of those considered no longer able to do the job or unwilling to change – often mature-age people. Relatively generous pension or redundancy settlements have sometimes been used to lever such workers out of jobs. Early retirement is often portrayed as an opportunity to enter a life of leisure, free from the stresses of working life, while in good health.
The reality is often very different. Research studies have shown that, while for some, early retirement can come as a relief, most would have preferred to have stayed on or at least chosen their moment to retire. And while most thought they might easily move into new, often part-time, jobs, in reality a lifetime’s work experience has often counted for little.
Large numbers of mature-age workers are denied even this level of security. These workers have been caught on the tide of massive shifts in industry, left high and dry without even a modest financial settlement.
Once out in the job market many have found that their skills are ill suited to the demands of the newer industries, or that their age counts against them.
Many have never worked again. This has often meant years of unemployment before reaching the relative safety of the age pension. By that time any savings are usually long since exhausted, eliminating any hope of a relatively comfortable old age.
Ageism: key factors
What accounts for the problems faced by mature-age workers? First, we are a society obsessed with age. The young are seen by many as our future, while older people are seen as having nothing new to offer.
There is now a considerable body of evidence demonstrating that mature-age workers suffer considerable discrimination in the labour market.
Not only are they over-represented among those first targeted for redundancy; once in the labour market, they find themselves facing significant age barriers. These include managerial concerns about the payback period on investment in worker training, perceptions that mature-age workers are marking time until retirement and/or that their work performance in key regards is lower than that of younger workers.
As a result, older workers in employment sometimes find themselves denied access to training opportunities or are passed over for promotion, simply because they have crossed a particular age threshold. This makes them vulnerable if a reduction in the workforce headcount is required. Unemployed older workers sometimes find it difficult to find re-employment, except on the low-pay/low security periphery of the labour market.
Secondly, and importantly, until recently some governments gave tacit support to employers wishing to dispense with older labour. Thirdly, older workers sometimes help perpetuate ageist myths. Some wrongly believe they are helping younger workers by making way, or that re-training is unnecessary or that they are too old to re-train. Others believe that, at their age, no employer would take them on anyway.
On the other hand, some mature-age workers believe that their age is the barrier when in fact it is not. Thus, ageism is often internalised by older people.
Much needs to be done to assist older workers to maintain their employability and to encourage them to re-enter the labour market. But times are changing. Increasingly, leading companies and government departments are adopting policies intended to make retirement more flexible.
And the governments of most industrialised nations are now implementing policies aimed at the
retention or re-employment of mature-age workers.
Faced with a rapidly ageing population and skills shortages, some governments are now turning their attention to tackling age discrimination in the job market. New Zealand, the Australian States and Japan have introduced legislation proscribing age discrimination in employment.
In Europe, too, a recent European Union Directive commits member States to implement legislation outlawing age discrimination by 2006.
Initiatives have emerged in Australia and Europe in recent years aimed at encouraging and enabling the employment of mature-age workers.
For example, the UK Government has recently produced a code of practice for businesses on the employment of older workers, while France and Germany have introduced State schemes aimed at helping older workers gradually reduce their working hours before they retire.
Finland recently concluded a comprehensive ‘Program on Ageing Workers’, aimed at increasing their participation in the labour market.
Several Australian States have begun to offer employment programs targeting older workers.
Employers, too, are beginning to recognise that mature-age workers have things to offer and that a blend of youth and experience has business benefits (including employee job satisfaction, increased sales and better customer relations). Some have recognised that the tacit knowledge amassed by mature-age workers can be an important source of competitive advantage and have thus abandoned early retirement schemes in favour of compulsory, performance based, schemes - thus retaining the best team on the pitch, not necessarily the youngest.
Additionally, some employers are beginning to look at other ways in which they can remove age barriers. Among these are:
p including statements such as ‘older people welcome to apply’ in recruitment advertisements;
p providing age awareness training for staff;
p providing career planning workshops for workers aged in their 50s;
p offering special leave for those caring for elderly relatives, often older women; and
p encouraging older people to come back in a consultancy capacity after they have officially retired, or to run mentoring schemes whereby older workers can pass on the benefits of their experience to younger workers.
Critics are cynical about government motives for extending working life.
Influenced by the inevitable impact on pension funds of the stock market turmoil of recent years, and what are probably exaggerated claims about the likely effect of population ageing on the future sustainability of pension systems, the view is that governments are simply seeking to reduce the burden on the State. This is one motive. But governments have rightly recognised that ageing populations coupled with large-scale early retirement simply do not fit. While attractive to many individuals, a period of almost a quarter of a century in retirement is not tenable if the developed economies are going to remain competitive. Moreover, there is a body of evidence that the option of paid work for an older person can improve their prospects of experiencing a healthier, wealthier and happier old age.
Educating the masses and the markets
However, while policy makers are increasingly keen to promote more flexible options for mature-age workers, they must be wary of pushing older people into labour markets that do not value their talents.
Much work needs to be done to promote the benefits of employing older workers among business. Older people, too, need to be better educated about the pitfalls as well as the positives of early retirement.
More broadly, we all need to recognise that we are tomorrow’s mature-age workers and that if we want to enter old age with security and opportunity, we must take charge of our futures and ensure older people can participate equally in all areas of life, including work. This means taking a positive stance on global ageing and viewing mature-age workers as a prized asset rather than a liability.
p Professor Philip Taylor is senior research associate and executive director of the University of Cambridge Interdisciplinary Research Centre on Ageing and Professor of Ageing and Public Policy at Swinburne University of Technology
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