Capitalizing on the Older Worker: Will It Take Another 50 Years?

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In August 1950, delegates to the first national conference on aging in the United States concluded that "in the main...there are no insuperable obstacles to the expansion of employment opportunities for the older worker" and that "we may hope...that we shall not have to wait a generation, and yet another, before we succeed in utilizing the skills of our older persons."¹

Yet a generation and still another generation after that conference, older Americans remain a vastly underutilized resource. Although the U.S. has one of the highest labor force participation rates for older persons in the developed world—a rate that has been rising modestly for more than 15 years—only about 13 percent of the population aged 65 and over remains in the labor force, well below the nearly 27 percent of 1950. This is despite a law prohibiting mandatory retirement, improved health status and declining disability rates at upper ages, rising educational attainment, a decline in physically demanding jobs, and apparent interest on the part of many workers in work in retirement.

Age discrimination, skills obsolescence, and a dearth of attractive part-time jobs that older workers often maintain they would prefer propel many workers out of the labor force at relatively young ages, as does the lure of retirement itself. Why is it that employers seem so reluctant to tap into the older pool of labor?

For decades, surveys of employers, human resource managers, and supervisors have been issuing rave reviews of older workers, who are viewed as loyal, dependable, experienced, trustworthy, mature, good with customers, stable, and the like. The plaudits go on, but the hiring does not, perhaps because negative perceptions—higher costs, deficiencies when it comes to the latest technology, and concern about older workers' ability to learn that technology—outweigh the positive ones.

Are these insuperable obstacles, the conclusion of the 1950 conference notwithstanding? They would seem to be in view of how little progress has been made in expanding employment opportunities for older workers over the past 50 years. To be sure, one can find examples of employers who reach out to older workers or make an effort to retain and retrain their older employees, although they seem to be in the minority. More prevalent are employers who apparently haven't needed those workers.

That could change. Slowing labor force growth coupled with the impending retirement of the boomers may cause employers to take a second look at workers whom they have tended to show the door. If employers need workers, and labor analysts warn that they will, they might be encouraged to provide the types of incentives older workers say they want—more flexible work schedules, telecommuting options, job sharing, better part-time jobs, and phased retirement programs.

But a turn to older workers is not inevitable. The search for labor might lead employers to seek to increase the hours that women work, ship more jobs offshore, urge a relaxation of immigration restrictions, and/or substitute technology for labor. Older workers themselves may be fussy about what they will do, especially if they have the resources to retire. The greatest demand for labor may be in precisely the types of jobs that older workers are eager to get away from. Unless older workers keep their skills honed, younger workers will always be more recently trained in the latest technology, and many of the so-called "better" jobs will remain closed to older workers. Moreover, workers may say that they want to work in retirement, but it is not clear that the retirement they are speaking of is well into their 60s or 70s.

While the labor force participation rate of the older population will likely continue increasing, it is by no means certain that it will do more than inch upward as it has been doing in recent years. The challenge facing policymakers, older worker advocates, employment counselors, and others who would like to see working life extended is how best to help the increase along so that it doesn't take another generation or perhaps more to be able to claim success in utilizing the skills of older Americans.

¹Federal Security Agency, Man and His Years (Raleigh, NC: Health Publications Institute, Inc., 1951).

Sara Rix is a senior policy advisor with the Economics Team of the Public Policy Institute of AARP, where she focuses on the economics of aging, labor force and demographic trends, employment and retirement policy, and older worker employment issues. She has written and spoken extensively on the aged, an aging society, and aging issues for over 25 years. Before coming to AARP, she was director of research for the Women's Research and Education Institute (WREI). She is a member of the Population Association of America, the Gerontological Society of America (GSA), the National Economists Club, and the Society of Government Economists. She is a fellow of the Gerontological Society and of the Royal Society for the Encouragement of Arts, Manufactures and Commerce.