COVER STORY Age Crisis: The Unplanned Economic Impact of our Boomers and Blippers

Age – it’s an unrelenting sort of process at an individual level. At societal level, it has the mesmerising momentum of slow-breaking wave.

It’s not as though we haven’t seen it coming. The post-war birth bulge has been steadily advancing through its various social stages for nearly 60 years. Now the so-called “baby boomers” are pre-retirement and their departure promises to leave big hole in the workforce. But the sheer size of the hole and the problems associated with filling it have only recently filtered far enough into communal consciousness to prompt reaction from social policy makers – at home and abroad.

Unfortunately policies and attitudes toward more mature members of the workforce lag lamentably behind the demographic reality that their replacement pool is steadily shrinking. Take Australia for example. By the 2020s, its total projected labour force growth is predicted to be 125,000 for the decade compared with current growth rate of 170,000 year.

Despite this rather scary discrepancy, older workers, including senior executives, are seldom valued, don’t get the training made available to their younger colleagues, and are usually first in the firing line when recession hits. Many happily embrace early retirement as soon as their “super” kicks in or, if they can, deliberately downsize their work commitment in favour of lifestyle quality.

The OECD is now busy undertaking country-by-country evaluation of policies affecting work and retirement decisions and warns of pending labour shortages, shrinking economies and ballooning welfare payouts unless older workers are encouraged to stay on.

Countries that are most affected are meanwhile trialling various ways to extend the working life of its silver-heads – removing the sticks of retirement compulsion, plucking the carrots of retirement incentives, and setting up re-training or support schemes to help mature unemployed back into the workforce.

A report released this year by the Social Policy Research Centre at the University of NSW (‘Age Can Work: report to the Council of Trade Unions and Business Council of Australia’) puts “the case for older Australians staying in the workforce” – something they’re not currently inclined to do.

Highlighting widespread “culture” of early retirement in the country, it notes that 75 percent of men and 95 percent of women intend leaving full-time work before they hit 65. It warns that the labour supply implications of such trends will become more severe if they continue as the baby boomers reach pre-retirement age. “There is growing recognition that policies and attitudes that encourage and reinforce trend to early exit from the labour force – voluntary or involuntary – are no longer sustainable.”

In New Zealand recent study by EEO Commissioner Judy McGregor and Massey University’s Lance Gray (Older Worker Employment Transition) also warns that New Zealand’s “ageing population will have profound effects on the future of work and the size and nature of the labour force”.

It notes that by 2050, one quarter of New Zealand’s population will be over 65 – more than doubling from 12 percent in 1999. Japan, where both population age structure and low fertility rates are even more advanced, will hit the same mark 25 years earlier in 2025. Meanwhile, the growth rate of New Zealand’s working age population is projected to decline and became negative by 2041, according to Statistics New Zealand, 2000.

McGregor is worried that the whole issue lacks visibility. It seems most workplaces haven’t even noticed their human capital is increasingly grey-haired. “Everywhere we went in this and previous studies, we’ve forced people back to their human resource data and in my five years of research there hasn’t been one agency, employer or union group that hasn’t been surprised by how many older workers they have. It shows the demograph has moved but we haven’t consciously acknowledged that. So what needs to happen first is greater awareness of the notion of age in the workplace – and some expression of value around that. Because right now there are number of organisations existing very competitively on 50+ workforce.”

Her recent study, carried out for the Human Rights Commission, was partly in response to Treasury document that discusses the possibility of indexing superannuation up to age 70. It is certainly one option for reducing the fiscal burdens of an ageing population but, it could perhaps be characterised as big-stick approach to keeping older workers in harness and penalises those in more physically demanding jobs.

McGregor’s survey targeted older workers in the meat industry to discover thoughts and attitudes around retirement. It threw up few surprises for its “white liberal middle class” researchers, says McGregor. Most of the older workers interviewed wanted to go to work and enjoyed their jobs. Nearly third said that even if they won Lotto in the weekend, they’d still go to work on Monday. significant number are contemplating full-time work beyond the age of 65.

However, the study questions the assumption that people in workplace where heavy manual labour is involved can just keep going as normal while watching the “super” goalpost recede. Some older workers are already “living to work”, conserving energy elsewhere in order to meet work commitments, says McGregor. “We interviewed people who stood in the shower for an hour before going to work so their arthritis would allow them to work 10-hour shifts in freezing meatworks temperatures. People in comfortable offices may be able to continue but hard work takes toll and that links to issues of physical health and quality of life in retirement.”

All of which suggests that while people are keen to keep working for reasons ranging from companionship and sense of self-worth to the need for money, they may not want to keep contributing at the same level.

McGregor argues for new focus on retirement transition options in the workforce. “The Employment Contracts and Employment Relations Acts have forced attention to particular exit mechanisms like performance management. But there are many who now acknowledge that if you have someone who’s been loyal employee for 30 years then using the cycle of performance management to try and ease them out is in fact an undignified exit from the workforce.”

It might be legally safe mechanism but, it lacks respect and more flexible options such as shorter working weeks or reduced shifts could be used instead. “If we’re going to see our workforce age, then we’re going to have to be cleverer in our optimisation of it,” McGregor suggests.

Bring on the blippers
New Zealand, however, differs from other OECD countries, including its nearest neighbour. We have another wave heading inexorably across the demographic landscape – our baby “blippers”.

This particular wave represents birth blip during 1988-1996. These blippers have been busy stretching our primary school resources, are now heading through intermediate and, as they emerge into the workforce, will require some 106,000 new jobs, according to Waikato demography professor Ian Pool.

Pool describes this group as providing “the key to New Zealand’s future as developed country”. If the resources are put in place to provide the best training and create jobs, they’ll be huge labour force boon, provided of course they’re not poached by other countries suffering skills shortages.

Failure to do so, he warns, would not only be tragic loss of opportunity but probably turn out to be political and social liability given the potential volatility of skill-less and job-free 20-somethings. But it requires immediate focus. “The baby boomers should be looking at the intermediate schools right now and asking; ‘what can we do to make sure this generation gets the resources it needs?’ We have only narrow window of time to put in place policies and to be pro-active about making them happen. The market w

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