Employment
Older Workers: Opportunity at Our Doorstep
Speech
September 2004
Charles Leven
Chair
AARP Board of Directors
Nikkei Senior Work-life Forum
Tokyo, Japan
Ladies and gentlemen:
It is an honor for me to represent AARP’s 35 million members at this timely gathering. I am especially proud of the many partnerships and friendships AARP has developed over the past decade with our counterparts here in Japan. Three of AARP’s most recent presidents have visited Japan while in office. All three - Jim Parkel, Tess Canja, and Joe Perkins - have asked me to extend to you their warm greetings. And you can expect a visit before too long from our new president, Marie Smith.
Each day when we get up in the morning in the United States, the business day in Japan has already ended. For years, untold numbers of Americans have looked to the results of trading on the Nikkei Index for guidance on what they might expect to happen in our markets that day. It is my hope to - in small measure - return the favor by offering some thoughts on what AARP is doing in America’s efforts to adapt to our aging workforce.
Our older citizens represent - not only a link to the past, but also a vital link to the future - in the depth of their experiences, and in their longstanding adherence to the values that represent the best traditions of our nations and our peoples.
In fact, our older citizens are not only a link to the future - in many respects, they are the future! Population aging is a global phenomenon. By the year 2050, there will be 2 billion older persons in the world, compared to 600 million today. Every month, approximately 1 million persons reach 60 years of age.
Forecasts show that in 2050, the percentage of older persons will rise to 21 percent worldwide, up from 8 percent today, while the percentage of children will decline to 20 percent, from 33 percent today. The result: By the middle of this century, there will be more old people than children on Earth for the first time in human history.
In the United States, 4 of every 10 people in the work force will be older than 45 in just two years. By the end of this decade, one of every 5 will be over 55. At that point, we will begin to face critical shortages of qualified workers because the number of American workers aged 25 to 44 will begin to decline.
It appears the situation here in Japan will be even more critical. I understand half your population is already over age 41and I am told it is Japan’s destiny to have the oldest, working-age population of any member country of the Organization for Economic Cooperation and Development (OECD)
Without question, the rapidly increasing numbers of older citizens will present most nations and their governments with enormous new social and economic challenges. Each nation has its own challenges and will require policies and programs tailored to its own particular needs.
But what clearly is common to both Japan and the United States - and to many other nations ¯ is the urgent need to recruit and retain as many experienced and skilled older workers as possible. Also urgent will be the need to re-train many others whose skills have become obsolete.
We believe our 50-plus population can be both a productive power as a work force and a purchasing power as a consumer force. If we seize the opportunity now, these forces can yield economic growth and social progress. We view our older workers as an opportunity right at our doorstep.
Employing older workers can unlock the purchasing and creative power of millions of trainable employees and eager consumers. As people age, they continue to create demand for goods and services. This, in turn, creates jobs for people to produce those products and services. In the United States, people aged 50 and older control 75 percent of the nation's disposable income and own 77 percent of all personal financial assets.
And we’ve all heard about the demise of our public pension and health systems - about how unsustainable they are. Clearly, both our government and private sectors are going to have to make adjustments. However, by creating employment opportunities for older workers, we believe we can strengthen our tax base in the United States and, as a result, alleviate some of the pressure on our Social Security and health care systems.
But we didn’t reach these conclusions overnight. It has been a long and painstaking process. Nearly two decades ago, in 1985, AARP began surveying the attitudes, perceptions, and policies affecting older employees in the American workplace.
From the findings of these early surveys, we realized that before we could make any real progress, we had work to destroy a number of negative myths and stereotypes about aging and older people.
We found that belief in these myths and stereotypes was widespread - and was aiding and abetting age discrimination - was influencing how older people were portrayed in the media and in many other areas of our popular culture - and was influencing the attitudes and conduct of our elected leaders and civil servants in their attempts to address the needs of our older citizens.
And, yes, the widespread belief in myths and stereotypes about aging and older people was playing a major role in preventing American businesses from preparing for the changes in the workforce they would face in the 21st century.
Perhaps no normal state of the human condition is as rife with negative myths and stereotypes as is old age. One of the most common and most destructive myths is that old age is synonymous with frailty and illness. The reality of aging today is very different.
Most of today’s older Americans are not sick. They are not frail. Only about five out of every 100 older Americans live in nursing homes. And, if we could find successful treatments for Alzheimer’s disease, osteoporosis, and incontinence, we could cut America’s nursing home population in half.
In a recent survey of Americans 75 to 84 years of age, three out of every four reported no disability at all. Even after age 85, four out of every ten reported being fully functional.
A second myth is that when we become old, our responsibility to be a contributing member of our society comes to an end — that one’s older years must be devoted to “retirement” - whatever that may mean in different cultures.
In other words, we have come to believe that there is a logical sequence to life with young years devoted to education, middle years devoted to work, and older years devoted to idleness.
Today in the United States, we are finding that this “traditional” idea of a life sequence is blowing away with the wind, and we say, “Good riddance!” People are showing us that it’s possible to work well into their 80s and 90s with no thought of retirement. And people of advanced age are showing us they can go to school — to learn new skills, to develop abilities, to train for a new profession, or just to be more knowledgeable.
Perhaps the worst of the myths is the one that suggests that older workers are unproductive, and are unwilling or unable to learn new technologies. Study after study emphatically shows otherwise.
Older workers are recognized and valued for having a good work ethic and for providing experience, knowledge, and stability in the workplace. They are viewed as loyal workers who can be counted on in a crisis. All of these attributes make them desirable workers in our service-oriented economies.
In significant part because of these myths and stereotypes, Americans of good will have not, generally speaking, viewed age discrimination with the same disdain as they have viewed race and gender discrimination. It is viewed by many as primarily an economic issue and not an issue of social justice.
But let me be clear. AARP stands against all forms of age discrimination. We have a long history of being a major player in the fight against age discrimination - often the only significant player in the United States.
Examples of age discrimination in employment can be: denying training and promotions based on age; refusing to hire a job applicant based on age; and choosing to retire an employee based on age. We believe decisions of this nature should be based on an employee’s ability to perform, not on age.
In the U.S., the Age Discrimination in Employment Act – in place now for 36 years – is our primary defense against age discrimination. This act prohibits employers from arbitrarily discriminating against employees based on age. It also supports strategies to resolve problems between aging employees and their employers; protects employees and job applicants over age 40; and promotes employment of older people based on ability.
As many of you know, the European Union has directed all of its Member States to enact legislation prohibiting age discrimination in employment by 2006. AARP has provided consultations to EU governments on the development of anti-discrimination laws as mandated by the Anti-Discrimination Directive. In 2002, at the Second World Assembly on Ageing in Spain, AARP sponsored a forum focused on age discrimination in employment. Perhaps the most significant point we try to convey to other countries is that even a good law is not a panacea for ridding the work force of age discrimination. There must be adequate enforcement.
In the final analysis, age discrimination will not disappear in any part of the world until employers, employees, the courts, and our societies in general accept the premise that older persons have the right to remain productive members of society, and the right to be judged on their ability and not on their age.
As we entered the 21st century, we were beginning to see some progress in the attitudes of the American people toward aging and older persons, but our surveys were finding that older workers were still viewed by American businesses as lacking the ability to learn and to understand new technologies; and also as lacking the desired flexibility when asked to perform different tasks.
In 2000, only a small number of American businesses had included older workers in their strategic plans. Fewer, still, had taken steps to implement programs or policies that would help them utilize older employees. Much more had to be done - and soon.
It would have been easy to point the finger of blame at American business for the lack of progress. We knew it would be much harder to take on the responsibilities of helping to identify the challenges we were facing and of helping to develop solutions.
We realized that we could achieve much more by working in partnership with business than we could by simply sitting back and criticizing. And we realized, too, that to be effective, solutions had to benefit both older workers and employers.
AARP’s landmark American Business and Older Employees report of 2000 identified two major challenges facing American business and older workers in the new century. Both involve erasing, once and for all, the persistent negative myths and stereotypes of older workers.
For American businesses, the biggest challenge is simply to accept the fact of an aging workforce and to act accordingly. Underlying biases against older workers remain strong among human resources managers, particularly among younger, male managers.
This is significant, because the way hiring is done in the United States today, the human resources manager is often the “gatekeeper” for hiring in our companies, regardless of whether they make the final hiring decision.
For American workers, the challenge is to accept the fact that it is up to them to remain marketable as they age, and to act accordingly. Older workers, themselves, must play an active role in erasing the negative myths and stereotypes.
In 2001, AARP established our Best Employers for Workers Over 50 Program. The idea of this program is to encourage employers to develop and implement exemplary policies and practices by recognizing them publicly for doing so.
Employers who wish to be considered for the Best Employers honor complete an extensive application describing their practices in areas such as recruiting, workplace culture, training and development opportunities, alternative work arrangements, health benefits, pensions and retirement savings plans, and retiree benefits. Companies with 50 or more employees are eligible to apply.
Employers chosen as Best Employers are recognized in a variety of national media outlets, including well-known business publications and radio and television stations. A gala awards dinner is held in their honor in New York. Through this positive publicity, all honored employers gain a powerful asset in their employee recruitment campaigns.
And the Best Employers Program helps other employers with an opportunity to see how beneficial such policies and practices can be. It is this benefit that we are seeking to greatly expand.
The Best Employers Program is growing rapidly. The number of applicants has nearly doubled each year, and the number of honorees is growing nearly as fast - from 15 in 2002, to 25 in 2003, to 35 this year.
Earlier this year, AARP engaged a widely-respected consulting firm to conduct an analysis of the workforce practices and policies of present and former AARP Best Employers that are used to support, attract, retain and motivate a mature workforce. The resulting report, Staying Ahead of the Curve 2004: Employer Best Practices for Mature Workers, was released just three weeks ago.
This report highlights numerous examples of Best Practices implemented by the AARP Best Employers that can be adopted, perhaps with modifications, by other employers to create a workplace that appeals to older workers. We hope it will also encourage other employers to identify and implement additional policies, programs, and practices that meet the needs of older workers and their employers.
Among the major findings of the report were:
- Most newly implemented programs that focused on older workers usually require only a modest investment;
- A company’s individual industry and market focus can, in many cases, be leveraged to offer programs to support the aging workforce, such as insurance and financial companies offering financial planning; and
- New programs are, indeed, emerging to meet the workplace needs of the older worker.
The report found that many of the Best Practices focus on retention of their own older employees. A number of companies offer some form of phased retirement and a number are rehiring their retirees.
Flexibility is a key theme in supporting retention, and the Best Practices include options about work schedules and location. Restructuring existing job content is far less common to date, although it will likely be a bigger issue in the future.
Retention is also fostered by efforts to help employees move to different jobs and access new opportunities within the company.
Some Best Employers have formal systems to support and enable workers to move to new jobs within their organizations. Many offer career counseling. And time off to care for dependents beyond that required by law is often used to support retention efforts.
On the other hand, comprehensive programs specifically designed to attract new older workers are found in health care organizations, but not among other types of employers, except temporary agencies. But, what is happening at health care institutions may be a precursor of what will happen elsewhere in the future.
Retirement planning and preparation programs are common. Through these programs, employers help their workers plan and prepare for their retirement years, for which workers are shouldering more of the financial responsibility. Most Best Employers in 2004 provided some sort of retirement planning.
New programs which are emerging to attract older workers include those which formally recognize older worker issues, help older employees work more effectively in a common work culture, and help integrate these individuals with other workers with different needs and issues.
Perhaps surprisingly, despite all of the well-known problems facing the U.S. health care system, the Best Employers from the health care sector appear to have more developed older worker programs than most of the Best Employers from other sectors.
The health care industry depends on many specialized workers in different occupational groups, and the issues it is facing may offer us a look at what is coming to organizations in other sectors that depend on a number of specialized occupations.
Examples of older worker programs that have been implemented by health care organizations include targeted recruiting programs to recruit professionals, particularly nurses, from among retirees and from among other older workers; a very wide variety of flexible work options; and specialized services at a discount to employees and retirees.
I would like to mention, specifically, the practices of two of this year’s honorees. First, the employer with the highest overall score, the Charles Stark Draper Laboratory in Cambridge, Massachusetts, an applied research, engineering, and technology company, is unusual in that 42 percent of its employees are over 50.
Draper offers a wide range of favorable practices, including a recruitment program for retired and former employees; a very generous tuition program for graduate and undergraduate college work; a choice of defined benefit, defined contribution, and cash balance/hybrid retirement plans; and on-site seminars in retirement planning, college savings, transitioning to retirement, healthy lifestyles estate planning. In this case, the financial planning covers a range of topics, as opposed to simply those that focus on older workers issues such as retirement.
And St. Mary’s Medical Center in Huntington, West Virginia employs an innovative phased retirement program. They adjust pension calculations to allow workers to reduce hours in their final years of employment - without decreasing their final pension benefit. In addition to transitioning, it allows older workers to cut down on their hours without risking loss of retirement benefits in the final years of their employment.
We have made two significant changes to the Best Employers Program for 2005. Government employers can apply, including state-run colleges, universities, and hospitals. And a new category called “innovation” will be added, under which employers may showcase their new and unique practices relation to recruitment, flexible work arrangements, and rehiring their retirees.
I want to stress that AARP’s activities on behalf of older workers are by no means confined to the Best Employers Program and to surveys and reports. We have become involved directly in a number of areas.
When we released the Best Practices report, we also unveiled a new Employer Resource Center website to provide information and guidance for employers seeking to attract and retain older workers. The address is www.aarp.org/employerresourcecenter.
Earlier this year, AARP and Home Depot, the world’s largest home improvement retailer, announced a National Hiring Partnership to attract, motivate and retain eligible older workers as part-time and full-time employees in their nearly 2,000 stores. AARP’s Foundation is the largest contract administrator of the U.S. Department of Labor’s Senior Community Service Employment Program (SCSEP).
SCSEP provides opportunities for eligible people age 55 and over to obtain new job knowledge, enhance their skills and feel confident so they can find and sustain employment in the workforce.
It serves the most vulnerable in our society, those who are at or below the federally recognized poverty line and who have particular needs for new skills and training to get back in the labor force. It has tremendous impact in getting people out of poverty and keeping them out.
In local communities, AARP’s SCSEP Project Directors coordinate with Home Depot stores to identify qualified applicants for specific hiring needs. They will thoroughly assess each candidate’s skills and interests, and will give them detailed instructions on Home Depot's application process.
AARP’s National Hiring Partnership with Home Depot is off to a great start with more than 1,000 older workers hired in the first three months. It represents an outstanding example of how business, government, and non-governmental organizations (NGO) like AARP can work together successfully as partners. As such, it is serving as the prototype for the AARP Foundation’s nationwide Workforce Initiative which will be launched in February, 2005.
Representatives from the 28 companies that have been approved thus far for partnership in the Workforce Initiative have been invited to join us for a Business Leader Roundtable, "MATURE WORKERS IN THE 21ST CENTURY WORKFORCE," on September 28th at our headquarters in Washington, DC.
Before I conclude, there is a myth I didn’t mention earlier — the myth which suggests that only paid work can be meaningful. Perhaps it is because of our pioneering history that unpaid service - we call it volunteering - is so common in the U.S. There are numerous periods in America’s development when people had to rely on each other just to survive. Whatever the reasons, volunteering is firmly set in our culture.
I know that volunteering has not been a national tradition in Japan. But I also know that organizations supporting unpaid service have begun here in recent years and that this movement is growing.
Older persons who are not employed also need opportunities to continue to serve their communities, to contribute their skills, and to be valued. Without such opportunities, they will sink into dependency and decline. With such opportunities they can again become treasured assets of their communities.
Across the United States, AARP has some 160 thousand volunteers making a difference in the lives of others. Whether it’s directly through AARP-sponsored programs like our driver safety program, or partnering with other organizations like Big Brothers/Big Sisters, which is a well-known and respected youth mentoring program, our volunteers are making a huge difference.
Let me highlight just a few ways that AARP relies on its volunteers:
- To quickly mobilize and contact members of Congress by phone and through the mail to make our positions known;
- To lobby more effectively on issues that are important to AARP members, like nursing home reform, predatory lending practices, and affordable and accessible prescription medications;
- To provide thousands of hours of tutoring to children; and
- To assist millions of citizens in preparing annual tax returns.
While people on the receiving end certainly benefit from the unpaid services our volunteers provide, I know from experience that volunteers benefit just as much.
In closing, I want to express my appreciation to Nikkei for inviting AARP to participate in this forum. My trip here is one of an increasing number of international contacts we are making through AARP’s Global Aging Program.
We launched our Global Aging Program a few years ago because we recognized that we live in an interconnected world where the implications of aging on the economy and social fabric of one country can have far-reaching effects in other countries.
Through our Global Aging Program we work with governmental and non-governmental organizations, labor unions, businesses and academic institutions to exchange ideas. We host international meetings on issues affecting the world community, and we conduct fact-finding missions during which we meet with top representatives of government, labor, academic, nongovernmental and business sectors to discuss best approaches for our aging populations.
Some of you may be interested in attending one of our major international undertakings this year - a conference in London this November called "Reinventing Retirement," which will be hosted by AARP and The Financial Times.
We at AARP believe aging is synonymous with living. We begin aging the day we are born and continue aging until we die. We all are simply at different points on life's continuum. And, as in every other stage of life, old age may be filled with life's ups and downs. But it is also filled with the same opportunities, excitement, and vitality as life itself. That is the vision of aging that we believe should carry us through the 21st century.
Thank you.