Study: Younger Workers Hurt More by Recession; Older Workers Show Resilience

According to a study published by Boston College's Sloan Center on Aging & Work, younger workers are bearing the brunt of the current economic crisis, while older employees show greater resiliency in a recession-battered workplace where employers seek to do more with less. Specifically, in "The difference a downturn can make: Assessing the Early Effects of the Economic Crisis on the Employment Experiences of Workers", while researchers found employees of all ages reporting a drop in employee engagement (a measure of how invested and enthusiastic employees are in their work),

Workers among "Generation Y" – ages 26 and younger – report the greatest decrease in engagement. Those slightly older workers in "Generation X" – ages 27 to 42 – reported less of a decrease, while Baby Boomers and older "Traditionalists" – ages 43 or older – reported that their levels of engagement hardly changed at all.

Marcie Pitt-Catsouphes, director of the Center, suggests that "[s]ome older workers have been through recessions before and that gives them experiential resilience." Furthermore, she comments that "[s]avvy employers will leverage older workers' experience to help younger workers manage through turbulence," and "hat sense of resilience can help organizations remain energized and passionate."

Source: Sloan Center on Aging & Work Stages (June 2009)

Australia: Study Suggests Blue Collar Workers More Likely To Delay Retiremement

According to news reports, researchers report that Australian baby boomers' expected retirement age is now reaching 64.3 years and that it is blue-collar boomers--more likely to struggle with the physical demands of working into their late 60s than white-collar workers--who are bumping up the expected retirement age. According to a paper "Which of Australia’s Baby boomers expect to delay their retirement? An occupational overview" by University of Tasmania social researchers Natalie Jackson and Maggie Walter to be presented on July 9, "Professionals and Associate Professionals--many of whom hold so-called "critical skills" which are central to the functioning of many businesses, organisations and departments--have the youngest expected retirement ages, while Labourers and Production/Transport Workers have the oldest."

In comparing expected and preferred retirement ages, Jackson and Walter find that the gap between the two is generally bigger for blue-collar than office workers, with "insufficient financial resources to support retirement" cited as the main reason. For example, tradespeople in the automotive sector expect to retire at a median age of 66.1 years, but their preferred age of retirement is 58.3.

Overall, the study shows a rapid rate of change in the expectations of Australian workers towards retirement. "As recently as 1997, average age of retirement was 58 for males and 41 for females," it notes. "Our overall finding is of a median expected retirement age of 64.3 years for workers aged 40-59 in 2006."

Source: The Australian "Baby boomers ready to work longer" (June 1, 2009)

United Kingdom: Older Workers Worried about Recession

Workers aged 50 and over in the United Kingdom are worried about a recession double whammy according to a survey released by Help the Aged and Age Concern: afraid they will be forced out of their jobs due to their age and worried that their retirement incomes will be decimated by the recession. On the job front, 28% fear that their age will see them forced out of jobs if their employer decides to reduce staff numbers due to the economic downturn; and on the retirement income front, 47% said they are less confident than six months ago that their pension and savings will provide them with a comfortable standard of living in retirement.

This situation means for many‚ continuing working and retaining earning potential is more important than ever before. A massive 60 per cent of respondents said the recession has meant they will have to or want to work longer than originally planned. Yet‚ the economic situation and the lack of support available for over 50s who do lose their job will leave many of them permanently out of work and facing a long and difficult retirement.

Source: Age Concern News Release (May 26, 2009)

OECD Urges Countries: Don't Lump Older Workers among Disabled

Addressing policy challenges for disabled workers in a time of high unemployment, the OECD co-sponsored a High-Level Forum on Sickness, Disability and Work and, in its final communique, warned against repeating the mistakes of the past where in previous economic downturns, many older workers who lost their jobs were pushed onto disability benefit rolls rather than unemployment benefit schemes.

"While this may seem a harmless short-term measure, we now know that most people who receive a disability benefit for more than a year will never work again," said John Martin, OECD Director of Employment, Labour and Social Affairs. "It is crucial that governments align short-term social protection measures taken in response to the downturn, with longer-term goals of economic security and strong labour force participation."

As one of the background papers showed, older workers dominate the disability benefit rolls.

For links to other information, see OECD's "Sickness, Disability and Work" project.

Source: High-Level Forum on Sickness, Disability and Work Final Communique (May 15, 2009)

Research: Second Careers for Older Workers

AARP's Public Policy Institute has published a research report examining the characteristics of workers who change careers in late life, finding, among other things that later-life career change seems to be an important part of the retirement process. According to "Older Workers on the Move: Recareering in Later Life", authored by Richard W. Johnson, Janette Kawachi, and Eric K. Lewis of The Urban Institute, nearly two-thirds of workers who change jobs (and 27% of all older workers) switch occupations.

Called such career changes "recareering," the study reports that workers who change careers typically move into jobs that pay less and offer fewer benefits. However, the new careers tend to offer more flexible work arrangements, less stressful working conditions, and fewer managerial responsibilities. For workers interested in delaying retirement after long careers, such jobs may be just what they are looking for. In addition, the study finds that late-life occupational change is more common among men because women are less likely to continue working if they leave an employer in their fifties.

The research concludes that later-life career change seems to be an important part of the retirement process. Many changers later in life appear to be pushed into new lines of work involuntarily following job layoffs or business closings. Others, however, appear to place a high premium on leaving 9-5 work and moving into more flexible positions, even at less pay. Some older workers may change careers in hopes of finding more meaningful jobs that give added purpose to their lives.

Source: AARP Public Policy Institute Research Report (May 2009)

Europe: First European Day on Solidarity between Generations

The European Commission declared April 29 the first "European Day on Solidarity between Generations." In conjunction with that, various events took place throughout Europe.

"Over the coming years, the first baby-boomers will be starting to retire. This marks the beginning of a fundamental shift in the balance between retirees and people of working age. We have to make sure that ageing will not undermine solidarity between generations", said Vladimír Špidla, Commissioner for Employment, Social Affairs and Equal Opportunities.

Among other things:

• a conference on "Intergenerational Solidarity for Cohesive and Sustainable Societies" was organized by the Slovene Presidency in Brdo, seeking "to reinforce social links between generations as well as to initiate a shift in policy-making to promote greater solidarity between generations."
• the results of a Flash Eurobarometer on "Intergenerational Solidarity" was released. It showed considerable disparity in views about the generations among older and younger people. With respect to working, 56% of Europeans believe that as people work to an older age, fewer jobs will be available to younger workers.
• Eurofound launched a special website which brings together its recent findings, data and recommendations on issues related to the employment of older people, and active ageing issues, and the solidarity between generations.

Source: European Commission "Intergenerational solidarity: key to responding to demographic ageing" (April 28, 2009)

China: Study Points Pension Reform to Deal with Coming Age Wave

A report from the Center for Strategic & International Studies warns that the aging of China’s population could usher in a new era of slower economic growth and mounting social stress as tens of millions of Chinese arrive at old age over the next few decades without pensions and with inadequate family support. The authors of "China’s Long March to Retirement Reform: The Graying of the Middle Kingdom Revisited" evaluate recent government efforts to prepare for the challenge and outlines an ambitious new reform plan and argue that, despite the current economic situation, delay in addressing address the long-term aging challenge is not an option.

Among other things, Richard Jackson, Keisuke Nakashima, and Neil Howe present a plan that provides for a universal poverty backstop that would protect all Chinese against an uncertain old age, and that would also create a national and fully portable system of funded retirement accounts. This would allow China to care for a much larger number of older people without overburdening its smaller working generation and help China to maintain rates of savings, investment, and living standard growth as its population ages. With respect to retirement age:

The minimum retirement age would initially be set at 60 for men and 55 for women, just as it is in the current basic pension system. These low retirement ages are necessary because today’s older workers often do not have the skills to compete in China’s rapidly modernizing economy. But as these workers are replaced by younger and higher-skilled cohorts and as China’s population ages, longer work lives will not only become feasible, but essential. Our plan therefore provides for gradually raising the minimum retirement age for both sexes to age 65 by 2030, after which it would be indexed to longevity.

Sources: Center for Strategic & International Studies Summary (April 22, 2009); Reuters "Age wave to come crashing soon over China's economy" (April 27, 2009)