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America’s Aging Workforce: Merits and Demerits Research Paper


Abstract

A country’s workforce is its engine and it determines the country’s success or lack thereof it. The American workforce is slowly shifting to include a higher number of older workers as a result of various reasons amongst which are: failing economy and lack of social security to name but a few. In general, older workers are viewed as being a liability to the employer. This paper shall discount this notion by demonstrating that the merits that an aging workforce presents outweigh the demerits. The discriminations that older workers are subjected to shall be outlined and highlighted to be mostly from outdated stereotypes. In conclusion, this paper shall then demonstrate that an aging workforce is not only necessary for the wellbeing of the US economy but also greatly advantageous for the employer.

Introduction

Over the past few centuries, human civilization has advanced tremendously giving rise to significant social and economic changes. This has resulted most notably in the creation of a large group of working-class members of the society and their employers. It is this class that has been primarily responsible for the creation of immense wealth and therefore the growth of the nations.

The working conditions have changed significantly and while the earlier years of industrialization were characterized by appalling work conditions, low wages and discriminatory practices, recent times have been marked by employers embracing good practices. These good practices among other things are aimed at combating any discrimination that maybe they’re in the workplace. The United States as most other developed countries has endorsed the Equal Employment Opportunities (EEOs) which are policies that are intended to “eliminate workplace discrimination on the basis of age, color, disability, race, religion or sex” (Equal Employment Opportunity Commission, 2011).

Despite the apparent positive changes that have been made for the working class, there have been recent developments that have resulted in the presence of an aging workforce. People falling under this workgroup have faced some difficulties as well as discrimination because of their ages. This paper shall argue that the US workforce is in transition and rapidly aging due to a multiplicity of factors including the economy, population composition and the mandatory retirement laws of many foreign nations but age does not translate to incompetency. To reinforce this claim, this paper shall showcase the merits that an older workforce possesses so as to demonstrate that an older workforce is necessary for the continued well being of our economy as a county.

Factors Contributing to the Aging Workforce

There are a number of factors that have resulted in the growth of the aging workforce. The most pervasive one has been the economic realities of the present times. In the past, people were able to save up and invest in solid pension schemes that provided them with the income needed during their retirement years. In recent times, the pension schemes which guaranteed the older workers a steady income on retiring have been littered with scandals and scams leading to their collapse.

Reynell (2006) bleakly points out that “workers are being led into retirement plans that will fail them”. The government, on the other hand, has been plagued by massive debt and continued spending. This compounded with the high unemployment rates which have led to even more people being reliant on government handouts has meant that older people who would ideally by retired are forced to fend for themselves. As a result of this, the number of older employees is on the increase and Eberhard et al. (2009) record that the proportion of employed individuals between the ages of 55 and 64 has increased steadily from the mid-1990s.

Another factor that has contributed to the prevalence of the aging workforce in America is the demographic changes that are being experienced. Statistics from the U.S. Census Bureau (2008)reveal that the country is facing a radical demographic change and that by the year 2040, “19.7 percent of the population, or about 71.5 million Americans, will be 65 or older, compared with just 12.4 percent in 2000”.

This phenomenon has major implications on the labor market since it is highly likely that there will be labor and skill shortages in the coming decades should all the older workers retire at the traditional age. This is because, in the past, the rate of retirements has been more gradual in nature. As a result of this, the younger workers have been able to gradually fill in the spaces left by the older workers. The changing demographics have offset this and as it currently stands, the older population in America is one of the fastest-growing age cohorts in the United States (Fernia, Zarit & Johnsson, 2001). The older workers are therefore going to be obligated to remain in the labor force since they are no new entrants to replace them.

The emergence and subsequent growth of the older workforce have also been catalyzed by the decrease in social security with the system being projected to disappear in the near future. Eberhard et al. (2009, 24) state that the Social Security system which was originally structured to “provide relief to individuals with disabilities and those considered to be advanced in age may be unable to deed the growing numbers of older Americans in the next decade”. This is a bleak reality considering the fact that Social Security constitutes the core source of income for 20% of retired Americans. To counter this, the pre-retirees have opted to carry on working even after the traditional retirement ages so as to sustain themselves.

Another reason for the growing older workforce is that most of the older people continue working even after they have reached the traditional retirement age. A study by AARP (2003) found that nearly 70% of pre-retirees foresaw working either part-time or never retiring. Almost half planned to work into their 70s or beyond. Part of the reason why this is possible is that mandatory retirement no longer exists meaning that older workers are no longer forced out of employment at a particular age.

In the early years of the last century, there was mandatory retirement which meant that people were necessitated by law to retire at a given age. This is no longer the case today and a person’s age is no longer a limitation to his working. This is because the Federal government passed a law that made all age discrimination illegal (Lawrence, 2008). The older workers who desire to work for longer years, therefore, have an opportunity to do so resulting in the additional growth of the older workforce.

Advantages of Older Workforce

The modern-day work setting is characterized by increased rates of turnover as people seek “greener pastures” from other employers in the industry. This results in a firm losing its most adept workers to the competition which offers better pay or benefits. This is one of the areas in which an older workforce may be beneficial since older workers tend to be loyal to their employers. Research conducted by the Unum CMO (2008) revealed that there is “a lower turnover rate among older workers”.

While the reasons for this were not straight forward, it was suggested that it could be as a result of older people being more hesitant about changing jobs later in life as well as the sense of belonging and loyalty that the older workers felt. It is therefore evident that the older workforce presents a huge advantage in terms of dependability as compared to the younger workforce who can change jobs with little prompting. A firm that invests a lot of training efforts into its staff will, therefore, gain more from the older workforce who are more likely to stay with the firm, therefore, ensuring that the employer reaps the benefits from the investments made in the employee.

Old age is traditionally associated with maturity, wisdom and accumulated experience. This holds true for the older worker and in most cases, this worker will have gathered a lot of experience over the years and will, therefore, be very skilled and efficient in carrying out his work. This is especially true in some occupations such as the construction industry where one develops his skills while on the job. This means that the older workers possess more skills and knowledge which are relevant to the industry.

Brotherton (2010, p.24) reveals that in such industries, “skills are learned on the job and transferred from employee to employee”. Doing away with the older workforce will, therefore, have a negative impact on the productivity of a company. Even if one were to replace the older workers with younger ones, recruiting competent applicants is at best hard and it is up to the older workforce to not only train the new applicants but also transfer their knowledge to the same. In some fields, the older worker is more productive than the younger one as a result of the accumulated experience. A US Senate Report (2005) revealed that older workers have few on the job accidents as compared to the younger workers.

Another merit that is contained in the older workers is that they are knowledgeable about the organization. The older workers can, therefore, pass on the organizational values and practices to the new recruits leading to a well functioning organization. Rendall (2004) reveals that this organizational knowledge combined with the ability of the older workers to mentor and coach the younger workers is especially significant in organizations that have a well-structured manner of doing business. In addition to this, research reveals that older workers are more willing to assist their colleagues. Rendall (2004, p.9) reveals that the reason for this is because the aging workforce has a “greater willingness to share experiences and is less competition”.

Disadvantages of an Older Workforce

Arguably the most significant demerit presented by the aging workforce is that of medical problems. As people grow older, their physical well being deteriorates and they are more prone to ailments than when they were younger. A report by the British United Provident Association states that as a result of the prevalence in the aging workforce, employers will be obligated to work with governments to “cope with and manage the challenges of aging, much less healthy workforce in the future” (Paton, 2010, p.1). This is a fact that is corroborated by Eberhard et al. (2009, p.31) who reveal that the “age cohort of individuals 65 and older are recorded as having the highest number of disabled persons”.

For these reasons, the employer who has an aging workforce will have to come up with ways of managing absence that is bound to occur as a result of the health and wellbeing of the employees. This will invariably have a negative effect on the productivity of the organization as a whole as a result of the reduced input by the workforce. The report by BUPA suggests that firms should invest more in the health of their workforce to counter the declining health that is as a result of age (Paton, 2010). Such actions will result in the increase in a firm’s overhead, therefore, rendering it less profitable.

A significant disadvantage of older workers is that they require more flexible work hours and schedules than their younger counterparts. This is because older workers need to model their work-life to fit into their lives. A Report by the US Senate (2005, p.21) showed that “older workers are asking for more flexible hours, schedules, or assignments”. Older workers have different work-life balance needs than younger workers. Rendall (2004, p.21) states that work-life balance means that “both employers and employees recognize the pressures of work and, wherever possible seek to balance them with time away in other pursuits”.

To the older worker, the work-life balance will involve reducing workforce participation and possibly considering retirement. Considering the fact that the business environment is growing increasingly competitive and an employer may wish to have employees who are willing to work longer and on tight schedules, the older workforce presents an obvious obstacle. The younger workers, on the other hand, make no such demands on the employer and are willing to work odd hours at the convenience of the employer. A recent study revealed that employers are not enthusiastic about retaining older workers as a result of their flexibility demands (US Senate Report, 2005).

Another disadvantage of older workers is that they have higher salary demands than younger workers. Fernia, Zarit, and Johansson (2001) theorize that the reason for this is because of the experience they have accrued over the years. This theory is corroborated by the US Senate report (2004, p.21) which quips that “older workers may expect more paid time than newly hired employees based on previous employment benefits packages”.

The older workers are therefore more costly to the employer in terms of salary and may, therefore, be forfeited for the younger workers who do not make such demands from the employer. In addition to this, contributions to the older worker’s pension schemes by the employer are not productive since the older worker is bound to leave work sooner than later. Loretto, Vickerstaff, and White (2007) state that most employers are reluctant to pay pension contributions for older jobseekers. This resistance is from the reality that older workers are highly likely to leave their work after a few years of the pension contribution, therefore, costing the employer.

As has been noted in this paper, part of the reason why some of the older workers choose to remain in the labor market is that they need to sustain themselves. These people are therefore part of the workforce as a result of the harsh economic realities rather than their love of the profession. Rendall (2004) reveals that since the older workers are in work for longer than they wish as a result of the economic realities, they are not as motivated.

This being the case, the older workers will not demonstrate the same enthusiasm and commitment that the younger workers exude. Rendall (2004) goes on to assert that the fact that the older workers are “winding down for retirement” may further contribute to their non-committal nature in the affairs of the firm. This will undoubtedly result in lower productivity as compared to the younger workers who are wholly committed to the success of the organization.

Discrimination an Aging Workforce May Face

The aging workforce is subjected to discrimination in the employment field as a result of their age. Most of the discrimination and negative attitude towards the older workforce comes from the perception that they are aversive to change and generally sicker than the younger workforce. McGregor and Gray (2002) note that persistent stereotypes are hugely responsible for this discrimination which arises from social prejudices against older people in general. A study by McGregor & Gray (2002) revealed that older workers were perceived to have problems with technology, rigid (resistant to change) and less willing to work for longer hours, therefore, reinforcing the claim that discrimination against older workers is mostly as a result of stereotypical views held about them.

A very evident form of discrimination is the lack of training or career advancement opportunities for the older workforce. Research by McGregor and Gray (2002) indicates that most employees fail to provide work training or professional development opportunities for older workers and this ends up having a serious implication to the workplace in general. This is because lack of training translates to a decrease in work performance and since the older worker feels marginalized, his/her morale is greatly lowered hence less productivity. The rationale behind the lack of training for older people is since the firm reasons that these employees will only serve the firm for a limited time during which the firm may not have obtained a return on its investment (the training efforts).

This flawed approach results in a decrease in the productivity of the older workers both to the disadvantage of the individual and the firm. Unum CMO (2008, p.4) states that employers can gain a lot by investing in employees of all ages and “questioning outmoded practices based on prejudice or stereotype”. Kesselman (2004) argues that the notion that firms train their workers with the prospect of deferred compensation is faulty given the rapid obsolescence of workers’ skills. As such, training is a recurring process rather than a one-time event. As such, a firm can invest in training of older workers with some expectations that they will receive adequate returns before the said worker decides to retire.

As it currently stands, most employers do not offer flexible work plans for their workforce. While the younger workers may cope favorably in such conditions, the older workforce cannot cope with the tight schedules and fixed work hours that an employer may impose on them. A US senate report on the aging workforce revealed that flexible work arrangement and customized employment can help to make the older workers more productive to the organization (Senate Report, 2009). By offering flexible work options, the work environment will be more conducive for the older workers, therefore, leading to higher productivity.

Tackling Discrimination

The government can play a major role in ensuring that the aging workforce is treated fairly. At present, the United States is hailed as a model in terms of encouraging older workers. Loretto, Vickerstaff, and White (2007) note that in the US, “age legislation has been associated with significant increases in post-retirement age employment rates”. This clearly demonstrates that the role of the government in combating discrimination in the workplace cannot be overstated.

Left to themselves, the Mulgan and Aimer (2004) suggest that most employers would be at best reluctant to enforce any policies that did not positively yield to addition in their profits. The welfare of the workers would, therefore, take a back seat to profitability leading to an undermining of favorable work conditions for the works. As such, the government has to step in and in this case, combat discrimination based on age, the government has not only enacted policies that outlaw this practice but it has also made it mandatory for employees to create environments that promote the wellbeing of aging employers.

From the arguments presented in this paper, it is evident that the older workforce is necessary for the economic well being of our nation. While it has been advanced that government policies can be used to avoid discrimination of the aging workforce, Wrench (2003) suggests that broader social issues such as changing attitudes should be focused on to tackle the issue.

As such, campaigns that involve the production of media material that sensitizes people on discrimination issues should be undertaken. Education has played an important role in the reduction of discrimination in the workplace. This is especially true in gender discrimination whereby the reduction in the gender pay gap has been accredited to the increase in female education in the country. The same approach can be taken with regard to the older workforce so as to negate the stereotypes that currently result in discriminatory practices against the older workforce.

Discussion

It is a fact that most countries can no longer afford to support the older population through pension schemes and other plans as was the case in the past. As such, the world has to be prepared to deal with an increasing aging workforce. Only by effectively utilizing this group will a nation be able to improve its economic well being. A report by Unum CMO (2008, p.3) authoritatively states that “getting the best out of older workers depends more on having progressive employment policies applicable to the workforce as a whole than it does on specific measures targeted at this group in isolation”.

As such, while affirmative action and taking legal action may have a positive bearing on the older workforce, adopting workplace cultures that value the contribution that the older workforce makes have a greater impact and lead to productivity by the older workforce. A report by Unum CMO (2008) reveals that “the stereotype of the older worker as one who is unable to master information technology, always sick and more expensive than younger colleagues” is greatly flawed. Older workers are known to be open to changes in some instances and embrace information technology. In addition to this, the commitment to the firm, loyalty, and discipline generally offsets the expenses that may arise as a result of failing physical abilities.

However, it should be noted that some of the stereotypes held hold true. While it is true that older workers are at times unfairly discriminated against because of their age, Loretto, Vickerstaff and White (2007, p.290) suggest that discrimination as a result of age may have some merit since there is truth in the “performance declining with age” assertion. This is a valid fear since there has been an established relationship between aging and work performance in some occupations. Therefore, as a result of the stereotyping and the actual “performance declining with age” reality, older workers find themselves being marginalized. This combined with employees failing to provide work training or professional development opportunities for older workers negatively affects the older workers.

Conclusion

This paper set out to argue that age does not translate to incompetency with regard to the aging American workforce and as such, older workers should not be discriminated against. To reinforce this claim, the paper has articulated the need for the aging workforce as well as the various advantages that the group brings to the job market. This paper also has demonstrated that the popular stereotype that older workers cost more for the employer and produce less is flawed and outdated and should therefore not be used as the basis for discriminating against older workers. However, the paper has also taken care to acknowledge the inherent demerits that an aging workforce presents. It has however been shown that these demerits can be dealt with resulting in favorable results both for the aging worker and the employer.

Judging by the demographical trends that are currently in place, it can be projected that the percentage of older people is going to increase in the US. It is, therefore, a reasonable assumption that as the years pass by, the aging workforce will have many human resource implications in the United States. From this paper, it can be authoritatively stated that the challenges that the older workers pose are easily outweighed by the benefits that they bring.

References

AARP. (2003). Workforce trends: staying ahead of the curve 2003: the AARP working in retirement study executive summary. Web.

Brotherton, P. (2010). Aging Workforce Worries construction Industry. American Society for Training & Development.

Eberhard, S. et al. (2009). “The Aging Workforce”. 34th Institute on Rehabilitation Issues.

Fernia, E. E., Zarit, S. H., & Johansson, B. (2001). “The Disablement Process in very late life: a Study of the Oldest-old in Sweden”. Journal of Gerontology: Psychological Sciences, 56B, 12-23.

Kesselman, R. J. (2004). Challenging the Economic Assumptions of Mandatory Retirement. Center for Public Policy Research.

Lawrence, L. (2008). “Retiring Retirement”. Nature Commentary, vol 453: 29.

Loretto, W., Vickerstaff, S. & White, P. (2007). The future for older workers: new perspectives. The Policy Press.

McGregor, J. & Gray, L. (2002). Stereotypes and Older Workers: The New Zealand Experience. Social Policy Journal of New Zealand, Issue 18.

Mulgan, R. G. & Aimer, P. (2004). Politics in New Zealand. Auckland University Press.

Paton, N. (2010). “Report Predicts Future with an Aging less Healthy Workforce”. Occupational Health, Vol. 62 Issue 7, p5-5, 2/3p.

Rendall, R. (2004). Facing an Ageing Workforce: Information for Public Service HR Managers. State Services Commission, Wellington.

Reynell, C. (2006). “Pension Scams”. The Economist, Volume 378, Issues 8459-8470.

Senate Report (2005). Report of the Taskforce on the Aging of the American Workforce.

Unum CMO (2008). “Unum CMO Report Highlights ‘Inconvenient Truths’ about the Ageing Workforce” Occupational Health: De 2008, Vol. 60 Issue 12, p. 35-36.

U.S. Census Bureau (2007). Projected Population of the United States by Age and Sex: 2000 to 2050. Web.

Wrench J. (2003). Managing Diversity, Fighting Racism or Combating Discrimination? A Critical Exploration. Web.

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IvyPanda. (2020, July 24). America’s Aging Workforce: Merits and Demerits. Retrieved from https://ivypanda.com/essays/americas-aging-workforce-merits-and-demerits/

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"America’s Aging Workforce: Merits and Demerits." IvyPanda, 24 July 2020, ivypanda.com/essays/americas-aging-workforce-merits-and-demerits/.

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IvyPanda. "America’s Aging Workforce: Merits and Demerits." July 24, 2020. https://ivypanda.com/essays/americas-aging-workforce-merits-and-demerits/.

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IvyPanda. 2020. "America’s Aging Workforce: Merits and Demerits." July 24, 2020. https://ivypanda.com/essays/americas-aging-workforce-merits-and-demerits/.

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IvyPanda. (2020) 'America’s Aging Workforce: Merits and Demerits'. 24 July.

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