US economy's hidden asset: older workers
Far from being a drag on the economy, so-called gray labor will be key to America's competitiveness in coming years. Mature workers can bring major productivity gains to US businesses – if we can make changes to better tap their talent.
Washington and Chicago
Despite old perceptions that aging Americans drag on the economy, new realities demonstrate that properly primed, mature workers can be a key element of the talent pipeline so critical to the nation’s competitiveness.
The statistics tell the story. Gray labor – 55-years and beyond – will account for 90 percent of the increase in the labor market between 2008 and 2018. That’s 90 percent. Demographics are driving this, of course. Americans are living longer and extending their working lives. Some nearing retirement shun it; others without paychecks scramble to secure new jobs. Many older Americans simply want to stay engaged and active, yet an increasing number are so pressed financially, they face a grim future without earned income.
Mature job seekers have a harder time finding work, and they are out of a job much longer than their younger counterparts. Matching their talents with industries desperate for workers in the next five to ten years will turn a potential risk into a real asset.
But we’ll have to come up with some answers, and quickly, to tap into mature talent:
Can we position mature Americans to meet industries’ needs for qualified workers? Talking about looming skill shortages in a recession may seem crazy – but the retirement of the baby boomer generation is imminent. Current estimates project a 500,000 shortage in welders in 2014, for example, from the most rudimentary to the most sophisticated – and filling these slots is essential to US manufacturing competitiveness. Other critically important industries such as public/private utilities – from electricity to water – stand to lose half of their workers over the next decade. Or consider the oil and gas workforce, which averages 50 years old, with half being likely to retire in the near future. Workers in these conventional energy sector jobs, from power plant operators to transmission line and pipeline workers, are retiring at a much faster rate than they are being replaced. How can we fill this void, and how can we equip mature workers to serve as supervisors, mentors, and teachers to younger workers coming into these fields?
How do we convert IRS rules from punitive to progressive? Tax formulas and other regulations hurt older Americans intent on remaining or re-entering the workforce. Increasingly, older Americans look for more flexibility in their working lives. Some recent retirees wish to return to their former companies, perhaps as mentors or to train the trainers. Still others want to take on new work opportunities. All of them may incur penalties for continuing to work, and IRS rules or other regulations may impinge on their ability to supplement their retirement income.
Are we doing all we can to cultivate entrepreneurship? The numbers of aging unemployed-cum-entrepreneurs are soaring. Baby boomers lead the way as some of the most successful entrepreneurs. For the past 15 years, people 55-to-64 have eclipsed the rate of entrepreneurial activity among their younger counterparts – 20- to 30-somethings. And post-50 year-olds have started up twice as many technology firms as the under 25-year-old upstarts.
How do we maximize what gives these grayer entrepreneurs the edge – their accumulated experience, wisdom, and business relationships? As a group suffering longer-term unemployment, mature workers relish the chance to determine their own destiny. The Small Business Administration (SBA) provides loans to entrepreneurs. But even micro-finance would make a mark on older Americans with marketable skills. Some workers may benefit from entrepreneurship training; others might just need a small amount of seed capital and some tax relief. And it will take more than an SBA program to unleash this human potential. We need to get creative to maximize opportunities, such as offering tax incentives to entice big businesses to include mature entrepreneurs in their supplier network.
Who will catch the older unemployed as they fall from their safe perches? How can we ensure that employment assistance programs are equipped to do the job? The biggest official approach to joblessness, the Workforce Investment Act (WIA), doesn’t encourage the public workforce system to serve mature job seekers. On the contrary, the regulations actually penalize workforce agencies for accommodating older jobseeker’s needs or preferences, like placing older workers in part-time jobs instead of full-time jobs that are currently one of the “measurements” of workforce agency success.
Major productivity gains
The US Department of Health and Human Services says today’s are the healthiest seniors in the nation’s history. Their knowledge transfer, efficiencies, and “lead by example” approach in the workplace add up to major productivity gains that US businesses can count on – if they tap into mature talent.
Debunking the myths about older Americans means embracing the reality that mature workers are assets that a competitive US economy can hardly afford to squander.
Amy Kaslow is a senior fellow and director of the Workforce and Economy at the Washington-based Council on Competitiveness, whose membership includes CEOs of top US companies, presidents of leading-edge research universities, and heads of major labor unions. Pam Tate is president and CEO of the Chicago-based Council on Adult and Experiential Learning (CAEL), a national nonprofit that facilitates workforce education and training programs among educational institutions, business, labor and government.