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Most of the solutions to “demographic problems” aren’t to be found in manipulating population at all, neither overall numbers nor age structures. And that’s good news because it means there’s a host of private and public sector policies we can pursue that help us maximize advantages and lessen challenges. Over the next year I’ll occasionally be using this newsletter to think through what such policies might look like for aging societies as part of my research for my new book project, which grows out of my April TED talk (thank you for half a million views in just 2 weeks!). In that talk, I argue that low fertility, aging, and eventually shrinking populations are inevitable, so we need to focus on our response. We shouldn’t sit idly by, nor should we respond out of fear. We can create a resilient future, but only if we start acting now. So, where to start as we create a roadmap for resilience?
One key node will be labor. Across the OECD, one big concern is labor shortages due to fewer workers entering the workforce year-on-year and, in some countries, the impending retirement of larger baby boomer cohorts (see this population pyramid for the US from a previous post). The following graph shows just how long people in select high-income countries spend in retirement. This is not a sustainable model.
Changing demographics mean we need to toss old models (which haven’t worked seamlessly anyway) and get creative about who works and how. We have to think through what both employers and employees want and can offer.
According to a report out last week from the OECD and the non-profit Generation, there are a lot of barriers to mid-career job switches, including employers discriminating against older workers. Job candidates over the age of 45 are the least likely to be hired by companies (see below). It’s notable that workers of that age would have graduated from college right around 2000 or 2001. Think about how technology has changed since then.
Their finding shows me that there’s a disconnect between how we are culturally starting to think about older age and how the workplace thinks of it. According to a recent Harris Poll survey of over 2,000 U.S. adults, including over 900 adults aged 50+, respondents said that while age 60 was considered "old" in their grandparents' time, now age 80 is the median age considered "old" today.” The workplace has yet to keep up.
Forcing Grandma into the factory?
Since improving labor force participation of older people is one of my key points when I give talks, I’m asked all the time if I think that’s what older people really want, or if I’m talking about a future where older people are essentially forced laborers. Certainly, it’s the former. According to that Harris poll, “Today's elders increasingly want a continued sense of purpose and meaning in their lives.” Only 16% of Americans aged 50+ see retirement as primarily a time for rest and relaxation. Two-thirds of them see it instead as a new chapter. That chapter can involve work, but that’s more likely if we’re creative about what that work looks like. In fact, the poll reports that 59% of pre-retirees and retirees say that even in retirement they want to work in some form in retirement.
Still, I recognize that the situations of older people are not uniform—not all of them are able to work because of disabilities. My own mother would have been one of those. Poor health forced her to leave the workforce at 55. She died shortly after she turned 70. Certain subgroups, like people of color in the United States, have lower healthy life expectancies.
It’s not about getting 100% labor force participation among older people. We just need to be creating opportunities for those who are able and who want to work longer to actually do so.
What’s in it for me? The ‘age performance paradox’
I firmly believe workers will benefit from some sort of work at older ages, but how will this turn out for employers?
I think this is the most important finding in the entire OECD/Generation report: “89 percent of employers reported that the midcareer and older workers they had hired performed as well or better than their younger hires. These current employees aged 45–64 were also perceived to stay as long or longer (86 percent) and to learn as or more quickly (83 percent) than younger employees.” They call this the “age performance paradox,” the gap between perceptions about performance of older workers (bad) and their actual performance (good). Figure 9 from the report shows that expectations start low.
Labor issues across the OECD aren’t just demographic problems of not enough working-age people; there are other structural issues at work. At the same time that many wealthy countries have shrinking workforces due to low fertility rates, youth unemployment there is high. And people over the age of 45 are 44% of our long-term unemployed, up from 36% in 2000. It’s just that the contraction of the workforce brings those other structural issues into stark relief and necessitates immediate action.
How to take action:
What I find especially valuable about this OECD/Generation report is that it points out what both employers and employees need to do to improve employability of older workers. Older workers may feel like their years of experience qualify them for a particular job, but employers are moving towards valuing skills—fresh ones—over employment history. So, older workers are going to have to get back to the classroom. One company I’m watching is Guild. Guild partners with large US employers to upskill and retrain to the benefit of employees, through improving their career mobility, and employers, who can better attract and retain talent that meets companies’ ever-changing needs.
I worry how older workers will fare given the trend of companies getting rid of a bachelor’s degree requirement for many jobs. At the end of September, Walmart announced that it was rewriting hundreds of job descriptions to specify that potential applicants could either have a degree, or highlight their experiences to show they had the necessary skills needed for the job. The Brookings Institution reported that as of June 2023, 13 states had removed unnecessary degree requirements from state jobs, what they call tearing down the “paper ceiling.” This move towards skills-based hiring may actually be a problem for older job seekers, however, if it means tech skills that midcareer and older workers may not possess.
Something else to think about: With private and public sector employers deprioritizing college degrees for a lot of jobs, demand for college degrees will fall even further. Instead, employees are seeking stackable certificates to signal required training. Couple that with the need for older workers to upskill, reskill, and retrain, refreshing what they may have learned in college decades prior by obtaining new licensures and certificates, and we can see that today’s colleges will need to amend their traditional models or be left further behind. I’ll probably write more about this in a future newsletter, as it’s part of my new book project on creating a resilient future. If you have experience with this let me know in the comments and maybe we can talk.
This newsletter was about workspan but there’s a healthspan issue: 40% of Americans 65+ are obese, bringing greater risk of chronic disease and disability, and in turn greater health care costs. This is a huge spike over rates from a generation ago (nearly double), and based on trends among those under 65 years the problem will only get worse. Life expectancy will decline and Americans will live more of their lives in poor health. Read the full report from PRB here. Key quote: “If recent increases in obesity and overweight (BMI 25.0 to 29.9) had not occurred, Levine and Crimmins estimate that young adults in their 20s and 30s would have aged 38% to 72% more slowly during the period.”
The cost of raising a child until age 18 in China is 6.9 times China's GDP per capita, a rank of second place behind South Korea among 13 countries in Europe and Asia, + the US. I’m afraid this finding will trigger even more pronatalism, when it would be much wiser to stop focusing on trying to raise fertility and start focusing on quality of life for those already born. Fertility rates might rise as a result, but measures focused on that goal aren’t working and are expensive—this report says China needs to spend 5% of GDP to raise it, Hungary’s level of expenditure.
Whoa. The US has detained nearly 104,000 undocumented immigrants as material witnesses in federal criminal proceedings since 2003, but not necessarily charging them with a crime. This is supposed to help with prosecuting smugglers but few cases go to trial; some defendants are released on bond while immigrant witnesses remain in jail. The US immigration system is a mess in large part because the adjudication process is a mess. Staffing is inadequate, all the way from those who process undocumented immigrants, to the judges that handle cases. From the NYT: “immigration-related crimes have come to dominate federal court dockets — 56 percent of federal convictions over the past five years involved immigration offenses.”
On that note, let me recommend the book Migrant, Refugee, Smuggler, Savior, by Peter Tinti and Tuesday Reitano. One of my favorites on this topic.