Grumpy Old Employees

Is an aging workforce a good thing in this economy? The Fiscal Times thinks so. They argue older employees delaying retirement is good for many reasons, one of which being less pressure on social security with workers not retiring all at once.

Over the past 16 years, labor force participation rates for men aged 62 to 74 climbed 39 percent, reversing three decades of decline. At the same time, participation for older women jumped 66 percent. In 2010, the government reported the highest number of 60-somethings in the work force since age-specific records began in 1948 — 12.9 million. 

They also argue that these workers contribute to the productivity and GDP of the nation being essential in this economy. But I'm not sure there's an evidence that employing these highly experienced workers longer actually helps with productivity. Even the reasons stated that people keep working seem pretty self-centered and not likely to contribute to engagement at work:

An AARP survey found that 69 percent of older workers plan to stay on the job into their golden years, but the majority would prefer part-time options. The top two reasons for wanting to keep working were for money and health insurance. The people who are already working past traditional retirement age tend to hold jobs that are structured differently: more flexible, fewer hours, less office politics and higher satisfaction, according to research by the Families and Work Institute.

And I have to admit the whole thing about them preferring to work part time is sort of ridiculous. I'm betting a huge chunk of the population would prefer to work part time, at least at different points in their lives. Would that we all had the pull and influence at work to make it so, not to mention retirement savings to dip from. But it's telling that this data reflects my own anecdotal experiences: that the older employees I know who keep working tend to do so because they think they can not afford to retire, or are concerned about health benefits (either because they are too young for medicare, think it will be too costly, or are neo-cons afraid that "obamacare" has somehow affected their precious entitlement benefits).

I am sympathetic. I think if you don't have the money that's a perfectly valid reason to keep working longer.

The financial crisis and recession have motivated some workers to delay retirement, as they struggle to recoup losses in their nest eggs. Even a two-year increase in the median retirement age could cut in half the share of households that are financially unprepared for old age, according to a McKinsey Global Institute study.

What with the magic of compound interest, it's no surprise that older workers can make up for retirement losses in a shorter timeframe. If their 401k was already substantially larger than younger workers, it's no wonder a few years could help to really turn it around. Not to mention the stock market's gone up more than 50% from its low in 2008. But here's where the article loses me. It's trying to convince me that all these people staying in the workforce longer is a good thing for the economy: of which I and most people I know care mostly about one thing, jobs.

Rather than seeing these people as crowding out younger workers from jobs, it's important to remember that as they stay in the work force longer, they generate more demand for goods and services — which creates jobs, Stevenson said.

Oh really?

Take the health care sector, where a shortage of nurses has forced employers to focus on retaining older workers, and to view flexibility as a strategic business tool rather than an accommodation, said Ellen Galinsky, president of the Families and Work Institute. Bon Secours, for instance, offers more flexible and part-time work in addition to facilitating transitions to less-physically demanding jobs. The company child care center is available to grandchildren of employees, not simply children. "They've done a lot of things to make the work force more appealing to older workers," Galinsky said.

The utility industry's engineers, executives and field technicians have an average age of 48, five years older than the median U.S. worker. At PSE&G in Newark, about a third of the energy company's 10,000 employees are already eligible to retire, said David Lyons, a PSE&G director. To keep skilled workers, the company implemented a phased retirement program three years ago that lets eligible employees work up to 24 hours a week for two years while receiving pension benefits, in addition to a program to rehire retirees for temporary engagements of up to 24 months.

Yeah I don't think all those brand new nursing graduates who can't find jobs are thanking you for your diligence in hanging on to nurses past retirement age. Like other industries in the past, there was all this talk about how there would be an extreme nursing shortage in this country once baby boomers started retiring. And young and motivated people flooded nursing schools. Last year the California Institute for Nursing and Healthcare was anticipating 40% of nursing graduates would be unable to find jobs. I get why companies would rather hang on to an older worker with much more experience rather than hire a fresh grad. But this to me is a win for the employer at best, and possibly the older worker, but a loss for GenY and GenX workers who have already dealt with the fact that many management positions would be out of their reach for much longer than previous generations and now are having the rug of education and hard work leading to a semi-stable job pulled out from under them.

Engineers also I think will not thank industries for offering juicier benefits to their oldtimers (who will already qualify for social security at much younger ages than successive generations, who do not know if it will even still be there for them). We already saw stability and pensions denied after the generation that retired before boomers and now we're seeing a desperate gamble to give some last, tasty benefits to boomers that no later generations will ever get a whif of. The national unemployment rate of engineers may not seem so bad, but the last career fair I was at included several hundred new graduates, many who had been unable to find their first job still after eight months since graduating and many more who were graduating soon and ten years ago might have already had a job offer but now had only the long unemployment of their peers to look forward to. Many of these bright young engineers would love to be wooed and coddled by utility companies. I agree a fresh engineer is not a decades experienced engineer but I wonder if comprehensive training programs are really much more expensive than increasing pension benefits or extending health insurance.

 

There's a lot of good studies cited in this article but no proof to back up that keeping older workers in the labor force longer has any benefit whatsoever to the economy or the GDP in any real measure. Even if it's good for the GDP, we've already seen that though this recession is supposedly over and GDP starting to rise that does not necessarily trickle down to the average worker. Until then I'm going to see this for what it is: another trick by employers to preserve short term profits and not look ahead towards long term growth.