A 20-Year View of the Labor Force

Posted Wednesday, October 31st, 2012| Comments (2) rule
Why the job market may be warming up to older workers
Chris Morett, PhD, MPP
Office of Scheduling and Space Management, Rutgers University
Research Fellow
Sloan Center on Aging & Work, Boston College
Phone: 848-932-4312
Email: chris.morett@rutgers.edu

Some broad trends in work and the workforce are emerging that could influence the fate of older workers years down the line. Now would be a good time for American employers and policy makers to notice and start talking about them.

Trend 1: Older workers 20 years from now will have lived and breathed the career gospel of their time: Continuous self-improvement. Stability in a single job is yesterday’s religion. The next generation of older workers will have spent their careers keeping their skills fresh, seeking continual education and training, and going after jobs that offer—in addition to intrinsic satisfaction and pecuniary rewards—a chance for personal growth. Even if today’s quick pace of technological change speeds up even more over the next two decades, future cohorts of older workers won’t be taken by surprise.

Trend 2: Older workers in the future will be used to changing jobs and employers. If today’s veteran workers once envisioned a gold watch, tomorrow’s aging workers might not even get that reference. Figures released in September by the Bureau of Labor Statistics show that the average job tenure is 5.4 years among workers ages 25 and over and 10.3 years among workers ages 55 to 64.

Tomorrow’s older workers will be well-versed in negotiating job instability. (Call it career dynamism if you want a more positive term.) Their job search skills will stay sharp, they will keep their networks strong, and they will continually keep an eye on what’s happening in the labor market. If you can check the time on your smart phone, who needs a gold watch?

Shorter job tenure is related to the pace of technological change driving Trend 1, but it is distinct for two reasons. First, people switch companies for reasons other than technological change. Second, technological change might force workers to acquire new skills or change their job descriptions—but that could happen without switching employers.

Short job tenure matters for another reason. One reason why employers shy away from older workers is the fear that these workers will soon be lost to retirement. This disadvantage becomes moot if the projected tenures of workers across age groups are short.

Trend 3: Social media supercharge our social networking capabilities. They strengthen our connections and make our extended networks much more transparent, by revealing information about our friends’ friends’ friends in high places. This should have an equalizing effect on the social networks that people can exploit to move from one job to another. At the same time, the use of social networks by employers to identify job candidates will make it easier for older workers to compete for jobs, because it weakens the link between age (and other demographic characteristics) and the chance that hiring managers will see a resume.

Trend 4: Trends both positive and negative in health and well-being will also matter. For highly educated older workers who enjoy better access to health care, health issues will be less likely to result in even the perception of a compromise in job performance. Developments in preventing mental degeneration will also keep the members of this cohort working as they age. The picture is not entirely rosy, however. A recent study reported declines in life expectancy among less educated Americans. If this trend holds, less educated workers could experience a decline in their fortunes as health setbacks interfere with their careers.

Trend 5: The mix of jobs in terms of quality (high-skilled and high-paying; low-skilled and low-paying; temporary, contract, or otherwise marginalized) is always changing in response to such factors as occupational structure, technology, global competition, and policy changes. Trends in this realm are difficult to project, and even current realities are complex. But I mention job mix here because if, in 20 years, the job market is skewed to low-paying, low-skilled jobs, employers may be less discriminating—in both the objective and pejorative senses of the word. Therefore, developments that might reduce aggregate age inequality are quite bad for other reasons. Age discrimination is a metric that must coexist with others. To reverse a political aphorism, a sinking tide lowers all boats.

Cultural factors: The trends discussed above are largely structural, in that they affect worker skills and worker networks. Structural factors that make older workers more competitive will also alter cultural views and expectations in a way that helps aging workers. Cultural changes might also affect older workers’ self-image, which would influence the jobs they go for, their performance in interviews, and how they do on the job.

Even so, it would be naïve to think that negative stereotypes of aging workers will go away. To the extent that real differences between older and younger workers continue to exist, they will prop these stereotypes up. Of course, sometimes stereotypes persist well past the point where any real differences between groups have vanished.

2 responses to “A 20-Year View of the Labor Force”

  1. Kate Barnett, Deputy Director, Aust Workplace Innovation & Social Research Centre says:

    The Australian government is undertaking a range of strategies to encourage people to work later in life. These include appointing an Age Discrimination Commissioner, providing incentives to employers to hire mature age people, lifting the eligible age to receive the Age Pension and tax-based incentives to contribute to superannuation as well as removing limitations in workers compensation and superannuation contributions by employers for workers aged 70 and over. There is a good understanding of the economic argument for prolonging working lives

    Recent research (Deloitte Access Economics 2012) quantified the critical role of mature age participation in tipping the balance between the number of future retirees and the number of workers available to support them. Specifically this identified that –
     An extra 3 percentage points on participation among workers aged 55 and over would result in a $33 billion boost to GDP – or around 1.6% of national income.
     A 5 percentage point lift in participation among this group would see around $48 billion in extra GDP – or 2.4% of national income.
    We are also changing our expectations about retirement, away from the notion of a fixed age to retire and away from a total cessation of paid work towards a phased process involving reducing hours of work.

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