The following blog is reposted with permission from www.brookings.edu

Gary Burtless, PhD
Senior Fellow, Economic Studies
Brookings Institution, Washington, DC

Email: GBURTLESS@brookings.edu

As the population grows older an increasing percentage of the workforce will be past age 60. Older workers are ordinarily thought to be less productive than younger ones, raising the question of whether an aging workforce will also be a less productive one.

In new research funded by the Social Security Administration, I consider whether an aging workforce has dragged down average worker productivity over the past quarter century. At least so far, the answer is an emphatic “No.” Improved education among the population past 60 and delays in retirement among better educated Americans have tended to boost the earnings of older workers compared with younger ones.

Using one standard benchmark of individual worker productivity—hourly wages—workers between 60 and 74 now earn more than an average worker who is between 25 and 59. The hourly pay premium for older men was about 22 percent in 2011. For older women it was about 10 percent. Other earnings benchmarks show a somewhat less favorable picture, but all of them show considerable improvement in the relative position of aged workers compared with the nonaged over the past two decades. None of the indicators of male productivity suggest that older male workers are less productive than average male workers who are between 25 and 59.

There are two main reasons for the surge in older workers’ earnings. First, the sheer size of the baby boom generation means that the number of Americans attaining age 60 each year is climbing steeply (see Chart 1). Second, labor force participation rates of adults between 60 and 74 have increased. The share of all labor income earned by older workers has soared in recent years because these workers have enjoyed faster wage gains than workers who are younger. It is crucial to understand why this is the case. A major reason is that older workers are now better educated compared with prime-age workers than was the case in the past. Twenty-five years ago the gap in education between prime-age workers and older Americans was large. Americans past 60 had much less schooling than workers who were younger. That gap is now much narrower.

Educational attainment is also important for understanding the increase in Americans’ labor force participation rates at older ages. At older ages there are major differences between the participation rates of highly educated and less educated people, and these differences have persisted and even widened in recent several decades (see Chart 2). In the early 1990s nearly 60 percent of 62-74 year-old men with doctoral and professional degrees were still in labor force. In contrast, only 20 percent of male high school dropouts the same age remained in the workforce. The participation-rate gap was smaller for older women, but it was still sizeable and it has grown over time.

Chart 2. Labor Force Participation Rates of Persons 62-74 Years Old by Schooling Attainment, 1991-1992 and 2009-2010

In the past quarter century there has been a steady improvement in older Americans’ educational credentials, both absolutely and in comparison to the qualifications of younger cohorts still in their prime working ages (see Charts 3 and 4). The improvement in older Americans’ educational attainment has improved their job market position. This is especially true for the men and women who remain in the workforce, because older Americans who stay attached to the labor force after 62 are much more likely to have received schooling after high school than the workers who retire at younger ages.

Changes in the distribution of educational attainment have influenced the age profile of earnings. Older workers now receive much better compensation compared with their prime-age counterparts (see Chart 5). Workers younger than 50 have seen a modest decline in their relative annual earnings, but workers past 55 have enjoyed impressive relative earnings gains. Compared with the earnings of an average 35-54 year-old worker, the average worker between 65 and 69 has seen his or her earnings climb 30 percentage points. Workers between 70 and 74 experienced a 28-percentage-point gain in their relative earnings. As noted, the relative earnings gains of older workers can be traced to the improvement in their educational attainment compared with younger workers. However, this development does not fully explain their gains. When I separately tabulate the age-earnings profiles of workers within each educational group I find similar, though generally far smaller, income gains among workers in the oldest age categories.

Chart 5. Age Profile of Annual Earnings of Adults Who Have Labor Income, 1985 and 2010

Using data from the March CPS files, I tabulated the distribution of annual earned income received by 25-74 year-old workers. I find that the share of male earnings received by 60-74 year-olds increased from 7.3 percent in 2000 to 12.7 percent in 2010. Among female earners, the share increased from 5.8 percent of total female earnings in 2000 to 11.7 percent of earnings in 2010. The magnitude of these gains is partly explained by the rising share of older workers in the labor force, partly by their increasing levels of work, and partly by improvements in their relative earnings if they do work. Even if employment and earnings patterns of older workers do not change during the next two decades, the share of all labor income received by older workers will continue to rise through about 2025. At their peak in importance, 60-74 year-old men will account for about 16 percent of male earnings and 60-74 year-old women will earn about 14½ percent of total female earnings.

What has been the impact of older workers on workforce productivity? If worker productivity has been harmed by the surge of older workers into the labor force the fact is not evident in the earnings statistics for the elderly themselves. The average worker between 60 and 74 now earns a higher hourly wage than workers who are between 25 and 59 (see the top panel of Chart 6). The hourly earnings premium enjoyed by older men and women has increased steadily since the turn of the century. The gains are equally impressive when we consider trends in annual labor income (wages plus self-employment earnings). The average annual earnings of working men between 60 and 74 is now slightly higher than that of men age 25-59. The yearly earnings of women between 60 and 74 is currently about 11 percent below that of working women between 25 and 59, but the gap is much narrower than it was at the turn of the century, when older women earned 28 percent less than their younger counterparts.

Chart 6. Average Earnings of Workers Age 60-74 as a Percent of Earnings of Workers Age 25-59, 1985-2011

The expectation that older workers will reduce average productivity may be fueled by the perception that the aged are less healthy, less educated, less up-to-date in their knowledge, and more fragile than the young. While all these images of the elderly are accurate to some degree, they do not necessarily describe the people who choose to remain employed at older ages. My research shows there are enormous differences between the labor force participation rates of older Americans depending on their level of schooling. People with limited education have low employment rates in old age. People with college and advanced degrees tend to remain in the workforce longer. If less productive workers selectively exit the workforce at younger ages, the average productivity of the older workers who remain may compare favorably to the average productivity of the young. A surge in the percentage of the potential workforce that is old may simply increase the proportion of the workforce that consists of comparatively skilled older workers.

Note: This is a research summary of Gary Burtless, “The Impact of Population Aging and Delayed Retirement on Workforce Productivity,” Working Paper 2013-11 (Chestnut Hill, MA: Center for Retirement Research at Boston College, June 2013).

Jan Hively (Janet M Hively, PhD)
Encore Entrepreneur

Email: HIVEL001@umn.edu

In 1994, the organizational consultant William Bridges predicted the end of jobs as the way of organizing work. Almost 20 years later, it’s looking like he might have been right. Now, half of working Americans are earning income from sources other than traditional jobs—as freelancers, consultants, contingency workers, independent contractors, and temps.

Bridges predicted that labor-saving technologies would eliminate the jobs of full-time employees who fulfill strictly prescribed duties for unvarying pay during regular hours. He saw that such traditional jobs are a rigid solution to an elastic problem in a fast-moving economy. Employers focused on cutting costs are not going to hire full-time employees when the work that needs to be done doesn’t require full-time attention. Already they have laid off most of the middle managers who once were needed to supervise employees.

Bridges wrote: “No longer the best way to organize work, the traditional job is becoming a social artifact. Its decline creates unfamiliar risks—and rich opportunities.” These opportunities are obvious both to employers and to experienced workers with highly developed skills. For example, a worker can perform a specialized task for a number of companies on contracts that do not require the service on a full-time, permanent basis.

An opportunity for Baby Boomers
Older workers who are creative and entrepreneurial are taking advantage of this shift in the labor market, seizing it as an opportunity to work past retirement age without being tied to a nine-to-five schedule. The Baby Boom generation has received the gift of 20 active, healthy years added to the middle of the life span, thanks to nutrition, exercise, and the medical miracles of the last century. Over the years since Bridges talked about the end of jobs, the share of workers planning to continue employment past the age of 65 has quadrupled, from 10 percent to 40 percent. The shift is due, in part, to the workers’ need for income with the shrinking of savings accounts and pension plans. Many Boomers, however, also seek personal satisfaction, choosing to forge new careers in fields that interest them or work for causes that they believe in.

Technology and longevity have given Boomers choices that did not exist previously. New ways of doing work have also given seniors the flexibility to take charge of their work schedule, work environment, and work focus. Experienced workers of any age who use current technologies and stay informed about market trends should be able to match their skills to opportunities for meaningful paid work. Professionals in their late sixties and seventies have the advantage, however, when it comes to coping with the insecurity of contract employment, because this cohort is more likely to have health care coverage and some pension savings as a cushion between contracts.

Safety in “flexicurity”
Both employers and workers benefit from the flexibility of labor contracts written to meet changing needs. But employers and workers also must contend with the insecurity that is inherent in the contract system. Workers juggling contracts can swing between overload and famine, while employers may lose production capacity as they search for qualified workers in a competitive market.

For the past several years, the European Union has been advocating “flexicurity”: an integrated strategy for enhancing both flexibility and security in the labor market. Flexicurity attempts to reconcile an employer’s need for a flexible workforce with a worker’s need for protection from long periods of unemployment. Denmark, in particular, has emphasized flexicurity principles in its labor market policies and social security system. These principles emphasize flexible and reliable contractual arrangements and comprehensive lifelong learning strategies.

In his bestselling book, Managing Transitions: Making the Most of Change (third edition, 2013), Bridges talked about three stages in the psychological process of adapting to change:

1. letting go of the past
2. the “neutral zone,” where the past is gone but the new isn’t fully present
3. making a new beginning

We’ve made a new beginning in adapting to the end of jobs, but the transition is hard. The challenge before us is to come up with a system that prepares and protects both employers and workers.*

*Older workers who want to live and work smart will find useful information in these two books:

• Life Planning Network. (2012). Live Smart after 50!: The Experts’ Guide to Life Planning for Uncertain Times. Boston, MA: Life Planning Network.
• Marci Alboher. (2013). The Encore Career Handbook: How to Make a Living and a Difference in the Second Half of Life. New York: Workman Publishing.
  

We’re going to have to work later in life and scale back in retirement. Let’s get used to it.

Kevin E. Cahill, PhD Research Economist Sloan Center on Aging & Work and ECONorthwest Phone: 617.552.9195 Email: cahillkc@bc.edu

Gene J. Kovacs, PhD Vice President Analysis Group, Inc. Phone: 617-425-8118 Email: gkovacs@analysisgroup.com

Today we hear lots of reports about how Americans are failing at retirement planning: 401(k) plans are insufficient; the Social Security trust fund is depleted; private savings are nonexistent. What are we saying these three pillars of retirement income are failing to provide, though: 20-plus years of full-time leisure? That goal might have made sense in a booming post-World War II America, when we generated an enormous amount of wealth and spent a sizable fraction of it on leisure, including long retirements.

Those days are gone.

Today, most Americans—young and old—can’t expect 20 years of leisure in retirement without a reduction in their standards of living. Our society—government, employers, and individuals—simply can’t afford that.

Here are the facts. The latest Social Security Board of Trustees report shows that Social Security will be able to pay promised benefits until 2033, after which some form of benefit cut or tax increase will be required to keep the program solvent. Sounds fine, but unfortunately the 2033 number requires lots of additional government borrowing as the Social Security Administration cashes in the IOUs it’s received from the Treasury. So while 2033 may be a relevant number from the Social Security Administration’s perspective, the government needs to borrow money now to finance our full promised Social Security benefits going forward. Further, even with the borrowed funds and even if the long-term gap in funding can be resolved, the typical older American can expect only about $1,200 per month in Social Security benefits—hardly enough to sustain a person in retirement.

Private pensions and savings are faring no better. Gone are the days of private-sector traditional defined-benefit pension plans, and there’s no sign that these plans are coming back. In their place are 401(k)s, and the typical older American household has accumulated less than $50,000 in these accounts. As for private savings, the typical worker has less than $25,000, excluding home equity and the value of defined-benefit pensions.

The not-so-awful truth
So, yes, the typical older American is unprepared for traditional retirement. Now, we can pretend that this isn’t the case, and advocate ever-larger publicly funded retirement benefits that the country can’t afford. Or we can face reality and do something about it.

Back in 2004, the Congressional Budget Office (CBO) conducted an analysis that examined how much in savings would be required to maintain living standards later in life based on the timing of retirement. According to the CBO, if a worker stays on the job just four more years—from age 62 to 66—the amount of money needed for retirement will fall by more than half. Delaying retirement for eight years—from age 62 to 70—reduces the amount needed for retirement by 90 percent!

The reason for this extreme impact isn’t rocket science. Each additional year of work:

1. replaces a year in which assets are drawn down with a year in which assets accumulate, earning interest, and
2. reduces the number of years of leisure that need to be financed.

With such huge benefits, working at least until the age of 66 seems to be a slam dunk for most Americans. Further, because an additional hour of work necessarily means one less hour of leisure, to recognize the need for continued work is also to acknowledge that traditional retirement is a thing of the past.


Note: Average retirement age is defined as the youngest age at which half of individuals are out of the labor force.
Sources: Arias E. United States life tables, 2008. National vital statistics reports; vol 61 no 3. Hyattasville, MD: National Center for Health Statistics. 2012 (available at: http://www.cdc.gov/nchs/data/nvsr/nvsr61/nvsr61_03.pdf); Quinn, J.F., Cahill K.E, &Giandrea, M.D. 2011. “Early Retirement: The Dawn of a New Era?” TIAA-CREF Institute Policy Brief (July) (available at: http://www1.tiaa-cref.org/institute/research/briefs/pb_earlyretirement0711.html).

Those who might think that extending their time in the workforce is a new hardship should think again. What’s truly new in American society, as the illustration above shows, is the idea that 20 years of leisure is the normal way to retire. Today, the average retirement age of men is about 65—higher than it’s been in about 30 years, so as a country we’ve already started moving in the right direction. In 1950, however, the average retirement age of men was 70 and in 1910—more than a hundred years ago—it was 73. The difference between retirement today and in the past is even more pronounced when one takes into account increases in life expectancy. With amazing improvements in health and longevity and with jobs being less physically demanding than in the past, common sense says that the vast majority of us can work later in life.

Herbert Stein, the late economist, once said, “If something cannot go on forever, it will stop.” For most Americans, traditional retirement is one of those things. It’s pointless, and even counterproductive, to say that we’re falling short of some fanciful retirement expectation. We aren’t falling short of anything. We’re simply returning to a more realistic world of work later in life.

The views expressed in this article are those of the authors and do not necessarily reflect the views of Analysis Group or ECONorthwest.

Jacquelyn B. James, PhD Director of Research Sloan Center on Aging & Work Email: jamesjc@bc.edu	Marcie Pitt-Catsouphes, PhD Director Sloan Center on Aging & Work Email: pittcats@bc.edu	Elyssa Besen, PhD Research Assistant Sloan Center on Aging & Work Email:besen@bc.edu

Around the world, older adults are exposed to negative stereotypes and, sometimes, outright discrimination. These vulnerabilities are especially worrisome today, given older workers’ increasing demand for employment. While most negative stereotypes of older workers have been challenged—in some cases refuted—by empirical data, research also shows that they are nevertheless common, especially among younger workers.

According to Derald Wing Sue and his colleagues at Columbia University (2007), microaggressions are “brief and commonplace daily verbal, behavioral, and environmental indignities, whether intentional or unintentional, that communicate hostile, derogatory or negative racial slights and insults to the target person or group.” Although perpetrators are often unaware of what they are doing, these “subtle snubs or dismissive looks, gestures, and tones” are blows to the self-esteem and/or well-being of their targets.

We assert that microaggressions can also be age-related. When misperceptions about the capabilities of older workers take the form of microaggressions, they affect older workers in the same way that they do members of racial minorities, eroding self-esteem.

“Old man,” “gramps,” “geezer,” and “old bag”: these and other epithets, experienced day after day, are degrading to older adults. Cumulatively, they are likely to have a negative impact on the well-being and the work-related outcomes of older workers.

Using data from the Sloan Center’s Age & Generations study, we examined internal (core self evaluation) and external (job conditions) predictors of employees’ mental health and work engagement scores. Our findings suggest that negative attitudes toward late-career workers do in fact affect these workers’ engagement with their jobs and ultimately their mental health.

Fortunately, our findings suggest that certain job conditions shield older workers from the ill effects of microaggressions. Moreover, our findings point employers to steps they can take to promote work environments that protect older employees from microaggressions.

First, employers can gather information formally or informally from employees to assess the prevalence of microaggressions in the workplace. Next, they can train supervisors and organize team-building experiences to foster an ethic of inclusion. Some employers might also find that job redesign to create a better fit with the needs and preferences of older workers is an effective approach. Indeed, the authors of one study reported that redesigning jobs in ways that increase the variety of an employee’s skills, clarify the significance of an employee’s tasks, and offer an employee more autonomy can greatly enhance the quality of the employee’s work.

Decades of research suggest that negative stereotypes of older workers are entrenched. It may take a long time to replace assumptions about older workers’ limitations with recognition of the assets that older workers bring to the workplace. In the meantime, buffering employees from age-related microaggressions is not only good for morale but also good for business. When older workers maintain their engagement in and enjoyment of jobs they find meaningful, they are more likely to stay with a company, minimizing the expense of recruitment and training and sustaining the company’s pool of knowledge and talent.

Why do women retire earlier than men?

Phyllis Moen, PhD
McKnight Presidential Chair in Sociology
University of Minnesota
Research Fellow
Sloan Center on Aging & Work, Boston College
Email: phylmoen@umn.edu

Bloggers have had much to say lately about the difficulties of working women who are raising children and/or managing dual-career marriages, as well as those who are planning to marry or to have children. They’ve paid less attention to women in their 50s, 60s, and early 70s who are confronting work-family pressures, too—but of a different sort. This age-span has come to be defined as the encore years. These are bonus years of healthy life expectancy after the period of career- and family-building—a time when men and women can pursue meaningful engagement in often reduced forms of paid work or else in voluntary service. The concept of productive, active aging emphasizes the social value of ongoing public engagement in the encore years, embracing this age group as an untapped source of talented and motivated human capital that can be a key organizational resource, as well as a community resource for promoting the common good. How Americans spend their time during this life phase also matters for their health and well-being, because those who work or volunteer tend to be and remain in better mental and physical health than those who don’t.

Recently, Sarah M. Flood, a researcher at the University of Minnesota, and I examined the amount of time that contemporary Americans moving through their encore years allocate to paid work. In an article published this month in the journal Social Problems, we report that women are less apt than men to be working for pay across this age span and more likely to use the word “retired” to define themselves. When we broadened our scope to include any form of public engagement (paid work; volunteering; informally helping out), we found that men are still more apt to be engaged than women, and the percentages don’t match up until men and women are in their late 70s.

Why is this the case? One reason is that women experience poorer health, and health issues have been shown to push older workers out of the workforce. Women are more likely than men to experience involuntary retirement as a result of corporate layoffs or buyouts. Another key reason is women’s family caregiving responsibilities, which encourage women to lean out of full-time work and even exit the labor market altogether. Ms. Flood and I found that women who care for a nonresidential child or grandchild or for an infirm older adult are about half as likely to be engaged in paid work than women without these obligations. Women with children or grandchildren under the age of 18 in their homes also have lower odds of working—roughly one chance out of three—than women who are free of such responsibility. Being married generally decreases women’s engagement in and time allocated to paid work, whether their husbands are employed or not.

Charting the time allocations of women and men suggests that the encore life stage could become a new arena for gender inequality, in which women with caregiving obligations are selectively excluded from participating in public activities that society values. The bonus years of health and vitality producing an emerging encore life stage can promote public engagement only if women and men in this age group can find flexible jobs, openings for less-than-fulltime encores. Such opportunities have yet to be institutionalized and legitimized in either government or corporate policies and practices.

Our findings underscore this phase of the life course as a time of transition out of paid work—a transition occurring more quickly for women. Drawing on the American Time Use Survey, data collected by U.S. Bureau of Labor Statistics, we show 86 percent of American men and 76 percent of American women between the ages 45 and 49 (pre-encore) are working for pay. Among those between the ages of 75 and 79 (post-encore), 83 percent of men and 95 percent of women are out of the workforce; moreover, 78 percent of men and 88 percent of women in their late 70s say they are retired. Advancing age is not the only source of pressure that keeps women at home during the encore years, however. The amount of time women can spend on activities in the sphere of public engagement depends on their ties to spouses, children and grandchildren, and infirm relatives, illuminating the family as a shaper of women’s experience throughout the life course.

Maria Heidkamp
Senior Project Manager
John J. Heldrich Center for Workforce Development
Rutgers, The State University of New Jersey

Email: heidkamp@rutgers.edu

The Great Recession ended almost four years ago (June 2009), but as of February 2013, nearly 2 million people over the age of 55 were still unemployed. According to the Bureau of Labor Statistics, nearly half (46.6 percent) of these older job seekers have earned the distinction of being long-term unemployed—that is, out of work for 27 or more weeks. We know from research done by the John J. Heldrich Center for Workforce Development, at Rutgers, how devastating unemployment—especially long-term unemployment—is for people’s economic well-being, not to mention their physical and mental health. The Heldrich Center’s director, Carl Van Horn, interviewed people in this situation and reports their stories in his book Working Scared (Or Not At All): The Lost Decade, Great Recession, and Restoring the Shattered American Dream. They describe a “world of hurt” and the frustrating, demeaning, isolating, and frightening state that is unemployment. One man said: “The lack of income and loss of health benefits hurt greatly, but losing the ability to provide for my wife and myself is killing me emotionally.” Do we have a public workforce system in place that can respond?

An increasingly complex job-search process

The reemployment difficulties of many older job seekers are exacerbated by the fact that both the labor market and the job search process are radically different from what they were even a few years ago. According to a recent report by Kathy Krepcio and Michele M. Martin, also of the Heldrich Center, the current labor market is characterized by “constant churn and volatility,” and permanent full-time employment is often replaced by part-time temporary or contingent work. In this unstable environment, Krepcio and Martin reason, even employed workers need to be always thinking about their next job and how to navigate their own career and professional development. Job searches have become far more complex, too, these investigators say; job seekers at all skill levels now need to have sophisticated technology and “personal branding” skills. They have to know how to “optimize their resumes with keywords” and engage in in-depth company research to craft cover letters that will attract an employer’s attention.

Recently, I observed several sessions for job seekers at a local public library in central New Jersey. A volunteer-run peer support group for job-seeking professionals works with the library to host these sessions several times a month. A few weeks ago, 65 people showed up on a snowy Friday morning for a session on how to nail an interview. Most appeared to be older than 40.

Our public workforce system offers relatively little to older job seekers like these. Frankly, it’s not clear that today’s workforce system has made any more sense of the changing labor market and job-search process than the self-help peer group at the library, which at least allows the participants—who generally describe themselves as being “in transition” rather than unemployed—the chance for some camaraderie as they struggle to navigate their futures.

De-skilling the older workforce

I routinely meet older job seekers who have made transitions to new jobs, such as the supermarket checkout clerk who used to do marketing for a big pharmaceutical company; the airport van driver who used to work as a newspaper editor; the other airport van driver who used to work for Hewlett Packard; the cable repairman who used to be in finance. The cable repairman is happy, because he has health insurance again for his family after two years without; he gets free Internet service; and he believes this job will be a stepping stone to the career in information technology that he hopes to have eventually. A new research paper by the Canadian economists Paul Beaudry, David A. Green, and Benjamin M. Sand offers evidence that the movement I have observed of high-skilled workers moving down the occupational ladder and taking jobs formerly held by lower-skilled workers is more than anecdotal. Their findings show it is a trend, and they’ve given it a name: “de-skilling.”

Many other older job seekers can’t seem to get a break at all. Recently published research that I conducted with William Mabe and Barbara DeGraaf, also of the Heldrich Center, suggests that their problem is not that they insist on pay commensurate with their experience, but rather that employers believe they will do so, and suspect, as well, that their skills will prove to be out of date.

The recession’s aftermath has made clear that in today’s volatile labor market and evolving economy, we need to rethink a public workforce system that can make lifelong learning and far better career navigation possible for those in transition—a state of being that may become the new normal as we all become constant job seekers.

Jacquelyn B. James, PhD
Director of Research
Sloan Center on Aging & Work, Boston College

Phone: 617.552.2860
Email: jamesjc@bc.edu

By now, most of us are familiar with the plight of unemployed older workers in today’s unforgiving economy. But allow me to introduce you to a less well-covered phenomenon: the plight of businesses that don’t hire older workers.

The recent Boston Globe article “Long-term joblessness hits older workers hard” did an excellent job portraying the struggles older Americans face when trying to find work past the age of 50. As one out-of-work 60-year-old profiled in the article states, interviewers 20 years younger than he was did not seem eager to “hire their dad.” What the article did not touch on is that those interviewers are putting their employers at a comparative disadvantage by overlooking the skills, experience and added value older workers offer.

First, let us dispel the myth that senior citizens are just too old for the workplace. We all know that workers, for the most part, don’t retire at 60 anymore. But that’s not just because they can’t afford to—it’s because 60 isn’t old anymore. Today’s 50-, 60-and 70-somethings not only need to work, they want to work, and they are fully capable of doing so. In fact, the average health of today’s older worker is no worse than that of their younger counterparts, and by some measures is better. A 2012 AARP survey asked Americans aged 35 to 80 to rate their overall health and happiness, and found responses generally increasing with age. Other surveys have found adults over 65 reporting lower levels of depression, loneliness, and other mental health problems than their younger peers. The perception that people over the age of 60 are somehow mentally or physically unsuited for the workplace is as outdated as a fax machine.

But it’s not just that older workers aren’t risks or burdens to organizations. They are, in fact, a benefit. Numerous studies have shown that older workers are the most satisfied with their jobs and the most engaged of all age groups, which any manager can tell you leads to higher levels of presenteeism and productivity. They very often bring relevant experiences, strong attention-to-detail, and resilience built from years on the job that their younger peers may be less likely to offer.

Some of you might be thinking ‘great, a 60-year-old may have something to offer my company, but they’ll only be there for five or ten years, so why put in the investment?’ But that line of thinking ignores the dynamics of the modern workplace, After all, according to the most recent data from the Bureau of Labor Statistics, the median tenure for 25- to 34-year-olds at their current employer is just 3.2 years. Hiring a 60-year-old could very well offer the company a longer tenure than hiring a 30-year-old.

Yet, the perception remains that older workers are not up to the job or not worth hiring. Nearly a quarter of all cases brought to the United States Equal Employment Opportunity Commission in 2011 claimed discrimination on the basis of age. Older workers are routinely passed up for promotions, forced out of jobs, or simply not given the chance in the first place. These kinds of ageist attitudes don’t just hurt older workers; they hurt the entire organization. A recent survey conducted by the Boston College Sloan Center on Aging & Work found that a perception of bias in the workplace against older workers generates lower senses of engagement among both older workers and younger workers. That’s right, even the perception that older workers are being discriminated against has a negative outcome for the company, across the board.

It’s high time for employers and employees alike to rethink our perceptions of older Americans in the workplace. Older workers are more than up to the job, they often bring unique skills and outlooks no one else can offer, and discriminating against these workers not only hurts them, it hurts the entire company.

Hiring managers who look at the resume of a 50+ worker and see a risk or a burden should look again. Older workers don’t need your pity. Firms that pass on the opportunity to hire them do.

Jacquelyn James, PhD is research director at the Sloan Center on Aging & Work and co-author of The Crown of Life: Dynamics of the Early Postretirement Period (with Paul Wink)

Shauneequa Owusu
Manager, Age-Friendly Commerce
The New York Academy of Medicine

Email: sowusu@nyam.org

In a U.S. economy driven mostly by consumer spending, older consumers outspend younger shoppers by at least $1 trillion annually. Workers who are the foundation of the supply side of the economy are also grower older. In seven years one in four workers in the United States will be at least 55 years old and a significant portion will continue to work past traditional retirement age. Furthermore, a younger worker can expect to spend the next 60 years in the workforce—much longer than earlier generations.

Workforce aging and the increasingly multigenerational workplace is an issue employers find challenging to adapt to. However, some are discovering that the new norm of four generations working together is an opportunity. By optimizing the strengths, talents, and skills of everyone, including older workers, businesses can potentially lower costs, boost productivity, spark new business, and relate to their growing older-adult consumer base—all of which can increase their bottom lines. Wells Fargo, Marriott International, and BMW, for example, have addressed their aging workforces by implementing strategies such as: making design changes to equipment, creating an employee resource group for older workers, and developing training tools to help support managers in leading multigenerational teams. As a result, they are seeing increases in productivity or profits—or both.

Employers who proactively find ways to support older workers create beneficial environments for workers of all ages. Having embraced the multigenerational workplace as an opportunity, they use innovation, flexibility, and creative talent management to stay ahead of the curve. These leaders deserve recognition by their peers: they are age-smart.

RECOGNIZING AGE-SMART PRACTICES

A good way to encourage businesses to create and execute age-smart practices is to reward those that are already doing so. “Age Smart Employer Awards”—an initiative of Age-friendly NYC and the New York Academy of Medicine (NYAM), funded by the Alfred P. Sloan Foundation—seeks to do just that. These awards honor New York City employers who have innovative practices that optimize the multigenerational workplace as part of a 21st century business strategy. A compendium of such strategies and practices, developed with the help of leading researchers in economics, organizational management, aging, and business, will guide the judging. Applications will be accepted beginning in April 2013. For more information and to download the compendium, visit www.AgeSmartEmployer.org.

You might ask: Why New York? Aside from its position as a global center of commerce, New York City was the first city to be recognized by the WHO Global Network of Age-friendly Cities and Communities, a program of the World Health Organization that links a growing number of cities around the world (135 so far) that commit to creating physical and social urban environments that promote healthy and active ageing and a good quality of life for their older residents. Age-friendly NYC’s work has attracted widespread attention and has become an international model. Currently, 700,000 workers in New York City are 55 and older and they represent a disproportionately large percentage of New York City’s workforce. Through consultations with older New Yorkers, NYAM found that they both want and need to remain in the workforce past the traditional age of retirement. Conversations with employers highlighted concerns about anticipating and accommodating the shifting needs of older employees, facilitating better relationships among multiple generations of workers, and creating two-way streets for younger and older workers to share their knowledge.

New York City has a unique opportunity to lead employers nationwide, by inspiring the creation of more age-smart workplaces, enhancing the economic well-being of older adults, increasing the contributions of older workers to a healthy economy, and capitalizing on the emerging silver economy. The closer companies come to achieving these imperatives, the more competitive they will be globally.

Work is what you do, not where you are.
      — Martha Johnson, Administrator, U.S. General Services Administration

Rucha Bhate
Doctoral Research Assistant
Sloan Center on Aging & Work, Boston College

Phone: 617.552.6954
Email: bhate@bc.edu

Marissa Mayer, the new chief executive of Yahoo, announced in February that employees would no longer be permitted to work remotely and would instead have to come into the office. According to the New York Times, “Yahoo’s policy change has unleashed a storm of criticism from advocates of workplace flexibility who say it is a retrograde approach, particularly for those who care for young children or aging parents.”

In the United States, where the majority of companies offer flexible work arrangements, Ms. Mayer’s decision clearly contradicts the mainstream. A global business survey ranked the United States among the top 10 countries hospitable to workplace flexibility. In Japan, Yahoo’s crackdown would be less surprising; there, only 18 percent of companies allow flexible schedules.

The differences in acceptance of workplace flexibility from one country to another are especially interesting, given that the incentives for companies to adopt workplace flexibility arise at least in part from globalization. The international scope of business demands an ever-increasing reliance on modern technology and social networking tools, making the division between work and play fuzzier. Most Americans would agree that we need to reinterpret and expand the traditional (and somewhat rigid) ideas of where, when, and how we work. An employer’s sensitivity and receptivity to workplace flexibility signal to employees that their boss is willing to address and accommodate their diverse needs and help them achieve work/life balance. Employers here and in the other top-10 countries use flexibility as an innovative human resource tool to attract and retain the best people in the global talent pool. Potential operational benefits of workplace flexibility such as reduced overhead costs on real estate and energy, lower job turnover, and higher productivity can also pave the way for favorable employee outcomes, such as better work/life balance, increased work engagement, and greater job satisfaction.

Against the backdrop of these incentives, researchers at the Sloan Center on Aging & Work wondered about variations in perceptions of workplace flexibility around the world.

The results of a survey we undertook in 2009-2010 revealed some illuminating contrasts across countries in employee perceptions of benefits that are key to workplace flexibility. As we expected, employees in the United States demonstrated the most* widespread agreement about the paybacks of workplace flexibility. Japan, at the other end of the spectrum, had the lowest score. Interestingly enough, two developed/developing country pairs (the United States and India; the United Kingdom and Brazil) exhibited very similar flexibility scores, suggesting that awareness of the advantages of workplace flexibility is not confined to high-income countries. Everywhere, females, employees with caregiving responsibilities, and employees with graduate degrees responded more favorably to flexible work, underscoring the influence of social parameters on workplace flexibility.

The variations we found in employees’ perceptions of workplace flexibility defy a one-size-fits-all human resources approach. Ideally, flexibility policies ought to be culture- and employee-specific. Periodically, employers need to evaluate the divergence between policy and practice to generate maximum leverage. After all, carefully designed and efficiently implemented workplace flexibility policy can and should benefit employers and employees alike.

For more information about research on employee perceptions of workplace flexibility, click here.

The following blog is reposted with permission from The Huffington Post

Marcie Pitt-Catsouphes, PhD Director Sloan Center on Aging & Work Associate Professor Graduate School of Social Work & Caroll School of Management, Boston College pittcats@bc.edu

Stephen Sweet, PhD Research Fellow Sloan Center on Aging & Work Associate Professor of Sociology Ithaca College sweets@bc.edu

Recently, employees at two major companies — Yahoo! and Best Buy — learned that they will no longer have as much discretion over where and when to work. Do the actions of these two firms indicate that the tide has turned against flexible work?

Many of our colleagues (ourselves included) present cases for flexible work, arguing that these arrangements are well-aligned with the global, 24/7 business world and offer a needed resource to working families. “Good flexibilities” offer supervisors and employees opportunities to move work (either in time or place) or reduce work to match demands of life on and off the job. Three decades of research makes clear that these types of flexibilities can support productivity and create more harmony between work and family commitments.

It is important to understand that workplace flexibility is more than working from home. Comprehensive flexibility creates opportunities to synchronize work and life. Working from home is only one strategy among a wide variety of flexible options that can be explored and implemented. Consider, for example, how a compressed work week or a variable schedule can be used in lieu of work-at-home arrangements.

A business case for flexibility exists, and studies (including notable ones of Best Buy) document benefits such as decreased absenteeism, lower turnover, and enhanced employee satisfaction. Ignoring these positive outcomes makes the elimination of flexible work options particularly troubling. Nevertheless, very few studies have crossed over all of the stepping stones, linking these types of positive outcomes with business-relevant metrics, such as sales performance, cost savings, and productivity. The jury is still out on the extent to which it is possible to measure the overall positive return on investment for an organization; what is clear, however, is that the work and home lives of individual employees can benefit in ways that matter to employers.

Corporate “pull back” from workplace flexibility is even more worrisome because there are indicators that availability has often been overestimated. Nearly all employers have flex options on the books, but the typical workplace does not operate like Yahoo! or Best Buy did. Relatively few employers make a large variety of flex options widely available to their workforces. And when flexibility is offered, most commonly it is the option to move work around. Far less often do workers have options to reduce the volume of labor or to take career time-outs. The reality is that American workplaces continue to be remarkably inflexible for most workers, so researchers have yet to document the full extent of what flexibility has to offer.

Ironically, when flex options are available, they tend to be allocated to the more advantaged members of the labor force (including men and professionals). But even among these advantaged members, there is a difference between a flexibility that is on the books versus one that is truly usable. Once the career costs of using flexible work options are included in the calculations, true availability diminishes even further. And not all flexibility is “good flexibility.” Employees in the fast food and retail sectors are among those that are most apt to have flexible work arrangements. However, on deeper inquiry it becomes apparent that they often get “bad flexibilities” that are not solution-focused choices made by supervisors and employees together. This results in unpredictable schedules that offer too little (rather than too much) work. Statistical estimates of wide-scale flex availability belie these qualitative observations.

Without doubt, today’s workplaces offer more flexible work options than they did in the 1970s and prior, but the trajectory of progress may have plateaued. Some industries, most notably those operating in the manufacturing sector, are still remarkably inflexible in their talent management practices. By comparing two national studies of employers, we found that the average company in 2006 offered 4 flexible options to most or all of their employees. In 2009, this had declined to 2 options. And declines happened across different industry sectors.

Despite a darkening horizon suggested by the press coverage of Best Buy and Yahoo!, there are great examples of companies that support local decision-making about flex options and that encourage managers and their employees to consider options that support work objectives. State Street Corporation was recently recognized by the WorldatWork’s Alliance for Work-Life Progress for its innovative program of Manager Initiated Flex. This program encourages managers to initiate conversations about whether work schedules, work hours, and the location of work can better assist not just employees, but State Street as well. The underlying principle of this program is that business problems — including work schedules — are best solved by talking about them. This illustrates a simple, direct, and effective approach to a complex issue.

Most employers expand flexibility because they believe that it will bring positive returns. The reality is that few employers are positioned to gather the data on what can be achieved, or what is achievable over the long term. If the bottom line moves upward for Yahoo! and Best Buy, do not be too quick to conclude that too much flexibility was at fault for their current problems, or that the removal of flexibility was the solution.

If the wave of enthusiasm for flexibility is subsiding, the tide of changing employee needs and expectations is not retreating. Companies are well advised to gauge the waters before concluding that they have become too flexible or are not flexible enough.