Old age can power growth

KIRAN MATHUR MOHAMMED

kmmpub@gmail.com

Alison balanced the half-eaten cake on her plastic plate as she looked around at now senior managers; feeling a bit sad. She had shown most of them the ropes when they were right out of school. Now, just after her 60th birthday, they were packing her off home. Forty-two years and that was that.

Alison’s story is very familiar. Take just one segment. Only 31.5 per cent of people between 60 and 65 participate in the labour force, and 5.1 per cent of them are unemployed. That’s almost 15,000 fewer than if the participation rate was at the national average.

More than 95,000 people must depend on a state pension to make ends meet. Government pension costs will exceed $3.5 billion this year and continue to rise.

Too many older people discover too late that they can’t afford basic needs. The World Economic Forum estimates that the global savings gap between retirement needs and actual retirement income is more than US$70 trillion – and is forecast to grow to US$400 trillion by 2050.

At the same time, employers at all the business conferences in TT continually mention a shortage of experienced people.

TT’s life expectancy has risen by more than nine years since 1960, according to the WHO, and fewer jobs involve as much hard physical labour. This is part of a miraculous increase in global life expectancies, fuelled by scientific and medical innovation beginning in the 19th century.

Yet even as society ages, its cultural attitudes to aging remain Victorian. Retirement remains a sharp, sudden shock. As Eillie Anzilotti at FastCompany notes: “We tend to treat aging as a separate phase, not an extension of the same life”.

No wonder retirement increases the probability of suffering from clinical depression by about 40 per cent, according to the Institute for Economic Affairs. In TT alone, one third of people over the age of 65 reported feeling lonely, as UWI’s Joan Rawlins’ 2009 study reported.

Most older people I spoke to want to be able to engage and contribute, even if only part-time. Flexibility is important. People want to return to work on their own terms, while still enjoying the freedom of retirement.

Meaningful work enriches life. Retirees who transition from full-time work into a temporary or part-time job function better and experience fewer major diseases than people who stop working altogether, according to Mo Wang in the Journal of Occupational Health Psychology.

And in Europe and the United States, Carol Graham has found that workers who remain in the labour force after retirement age are more satisfied and happier than retired counterparts.

An influx of older workers could potentially unlock significant growth. Far from taking younger people’s jobs, they would fill gaps in the labour supply. With their new or supplemented incomes, they would create demand for goods and services that could generate more jobs for younger workers.

Former retirees would then be less dependent on state pensions, freeing up funds that could be invested in infrastructure or in supporting the most vulnerable.

So how can we support older people in the workforce? Most often workplace ageism is less discrimination than a lack of awareness of the benefits. Older people are perceived as being inflexible and more expensive to hire. But as they have other income sources, they are often cheaper to hire. And most would prefer to work part-time.

Anna Dixon at the Centre for Ageing Better advises companies to offer flexible retirement schemes and to support healthy lifestyles. Retired workers for their part should approach jobs with realistic expectations.

Companies that actively invest in older workers see payoffs. In one assembly line, BMW made a series of simple changes to include older workers – like introducing part-time work and providing them with comfortable shoes, cushioned floors and adjustable workbenches. These cost just €20,000 and raised productivity by seven per cent.

The Japanese government supports “silver” human resource centres. These act as brokers, develop experience and skill profiles for their clients, and match them with businesses. A British initiative is focusing on late-stage career guidance around age 50. Workers should start planning earlier on.

The American Association for Retired Persons has connected thousands of older job seekers with information training, support, work experience, and employer access. Locally, Peter Pena and TTARP have a skills bank. With support this could be expanded into a fully-fledged career programme.

This is a quick win. Redefining old age won’t just enrich the lives of hundreds of thousands – our parents and grandparents. It can be a powerful engine for growth.

Kiran Mathur Mohammed is a social entrepreneur, economist and businessman. He is a former banker, and a graduate of the University of Edinburgh