In 1950 there were 16.5 workers for every retired worker. In 2012 the ratio was reduced to
3.3 to 1. By 2020 that ratio is projected at 2.2 to 1 and to almost 2 to 1 by 2030. Is anyone considering these projections and their implications for the U.S. economy?
Actually, there is good news. Thirty years were added to longevity in the 20th century; Gary Becker, an economics professor at the University of Chicago and Pulitzer Prize winner has called this the greatest gift of the 20th century. The U.S. has moved from an industrial to a knowledge-based economy; in fact, only 11 percent of the civilian workforce is employed in industrial companies and 84 percent in service companies. And we have a large and growing talent pool of Baby Boomers, 80 percent of whom, according to a 2011 survey conducted by AARP, indicate their intent to continue working after retirement.
The reality is that with the dramatic increase in longevity in the 20th century, millions of people
are qualified and ready to continue working after the traditional retirement age of 65. This is very good news because we have a large and growing talent pool with experience, expertise,
seasoned judgment, and proven performance (we call this EESP) to meet the workforce needs
of the 21st century.
Let's talk about the definition of retirement because we need a new word. Here is the definition
from Webster's II New College Dictionary: "to remove from active service; to remove from
circulation." Fortunately, many of the Baby Boomers will be moving from retirement into
rehirement, or perhaps into rewirement.
There is one more piece of good news. In a survey sponsored by 24 major companies and
completed by Harris Interactive in November 2011, "Survey on the Strategic Involvement of HR
in Fortune 1000 Companies," 24 percent of the companies reported that they had developed flexible workplace options for people who want to work on a part-time basis. More companies will be doing the same as the economy improves and they recognize the need to provide such options to retain and attract older workers. In fact, more flexibility will be required in managing tomorrow's workforce, including Gen Ys and the Millennials who indicate that work flexibility is important.
Now for the bad news. Americans still retain the mindset that when you reach a certain age
(pick 55, 60, or 65), you are out of the game and the headlights are getting dim. This mindset
needs to be changed to accord with the demographic realities: a new and third-stage of
adulthood has been created from 62-85; this concept was provided in a paper co-authored in 2000 by Dr. Elliott Jaques, who introduced the notion of the mid-life crisis in 1965. We need to recalibrate our thinking for this new reality. If we fail to do so and these Baby Boomers are pushed to the sidelines, our entitlement programs (e.g. Social Security and Medicare) will become unsustainable even sooner than projected.
Another piece of news, which some will call bad, is that the retirement age needs to be increased to 70 and the early retirement age to 67, then linked to further longevity gains. These changes must clearly be done equitably and gradually over a number of years. But it is essential that the age be changed from a Social Security Act passed in 1935 when the retirement age was set at 65 because few people lived longer.
The bad news will get even worse if we don't take action now to increase the retirement age.
Quoting Winston Churchill: "Americans can always be counted on to do the right thing... after
exhausting all of the other alternatives."
Closing on a positive note, documented research (the MacArthur Foundation Study on Aging in
America) demonstrates that older people who continue working beyond traditional retirement
age live longer, enjoy better health and report greater satisfaction with life than those who
don't. Working longer may not be for everyone, but it can contribute to a better quality of life
for many older people.
William Zinke is the founder and president of The Center for Productive Longevity, a nonprofit whose mission is to stimulate the substantially increased engagement of people 55 and older in productive activities, paid and volunteer, where they are qualified and ready to continue adding value.
EARLIER ON HUFF/POST50: Charles Schwab's 2012 Older Workers and Money Survey
Follow William K. Zinke on Twitter: www.twitter.com/CTRPL
I recognize that continued work is not for everyone. There are a variety of other avenues where older Americans can be engaged: volunteer work, teaching, mentoring/coaching, continued learning, care-giving, and more. However, some people have the financial need to continue working, and many others simply enjoy the social connection.
People 55+ have the opportunity to enjoy life in many ways; we encourage them to share their stories on new-business creation and inspirational life stories. The Center for Productive Longevity has created a contest to stimulate discussion about how older people can continue adding value to their extended lives. Further details can be obtained at www.ctrpl.org.
The whole thing would be solved if there were enough jobs that paid middle class wages.
Plus, median wage stagnation (Bill Moyers had a stunning graphic on his show yesterday illustrating that) means lower overall contributions to SS. If the economic growth of the past 30 years translated into a jump in median wage, the SS fund would probably be fully funded. Instead, the gains go to the top, where SS contributions get capped quickly.
And another consequence of college grads working at Starbucks and similar positions is that they will be permanently behind in their lifetime earnings, also depressing SS contribution levels.
(Do the people who think we should all dance happily at the prospect of working till we're 70 understand what real jobs are like?? They should read Dilbert for a very good picture.)
Of course they do, they enjoy better health aka energy and that is why they can continue working. They don't become healthier from working. They were already healthier. These same people would fare just as well if they retired. They would write books, do volunteer work, spend time with their grandchildren, take trips, stimulate the economy, start a business and whatever.
Is there a link to the years longevity? According to statistics the increase has been about 2.5 years for the lower paid earner and 5.5 years for the higher paid earner since Social Security began. If you mean in the since the biginning of the 20th century, less children die now than back then. We aren't living that much longer.
In my area I see more dying in their sixties and not many living to their eighties. Check your obituary page, to see what is happening in your area.
Why are they insisting that people work longer when there is not enough jobs for the young families?
http://www.nakedcapitalism.com/2012/06/mark-ames-the-lefts-big-sellout-how-the-aclu-and-human-rights-groups-quietly-exterminated-labor-rights.html”
A shocking number of my relatives who are now 65-80 managed to retire early with huge pensions and great health insurance. These folks have not spent the last 20 years of their lives giving back to society. They have benefited disproportionately from a historical fluke.