United States: Aging Farm Workforce and Immigration Reform

"A labor shortage is already hurting Imperial Valley farmers, but an aging work force in the fields suggests the problem could become much more severe if something isn’t done soon," reports Nick Taborek. Writing for the Medill Reports, he notes that immigration legislation before the U.S. Congress could help boost the labor supply but that some farm advocates suggest that only allowing temporary workers will not help long term.

He reports that Eric Reyes, a farm worker advocate in the Imperial Valley, finds that fewer young adults are opting for the long hours and strain associated with farm work, with the average age of a farm worker being now over 50 years old. In addition,
Ayron Moiola, executive director of the Imperial Valley Vegetable Growers Association, says “You’re not seeing a younger generation take their place.”

With respect to immigration reform,

Reyes said farmers hoping to attract a younger workforce for years to come should push for a bill that grants all new workers an attainable path to citizenship. If farm workers entering the U.S. are only given temporary visas, he doubts that the labor shortage will disappear.

Mark McBroom, a citrus farmer in the Imperial Valley, said there may be no clear-cut solution to the aging workforce in the fields. Rather, the trend for younger workers to shun farm work may be simply a sign of the times.

Source: Medill Reports "Farmers fret over aging workforce in the fields" (May 21, 2007)

OECD Issues Call for Better Protection of Occupational Pension Systems

Member countries of the Organisation for Economic Co-operation and Development (OECD) have agreed on new guidelines for governments and regulators designed to improve how certain types of pension funds are run with a view to making employees’ pensions more secure. The OECD Guidelines on Funding and Benefit Security in Occupational Pensions contain a series of recommendations concerning regulation of the funding of occupational pension plans, and in particular defined benefit pension schemes.

Issues covered by the guidelines include the funding and valuation of pension plans and protection of employees’ interests in company pension schemes in the event of their employer or the company that manages their pension plan going bankrupt. The guidelines also call on tax authorities to consider raising maximum funding levels, so as to allow pension funds to build up reserves that will protect them against a downturn in asset values.

According to OECD Secretary-General Angel Gurría, “[p]eople are living longer and need to be sure that their pensions are safe.” The guidelines "will be helpful to OECD countries to ensure that occupational pension plans offer secure retirement benefits to their members.”

Source: OECD News Release (May 10, 2007)

Survey: Do Employers Really Want Older Workers?

Even though the policy community generally thinks that employers will create opportunities for employees to work longer, with many observers saying that because employers will face labor shortages and a loss of “institutional intelligence” when the boomers exit the labor force, employers will be pushed to seek out older workers, results of a new survey raise a cautionary flag.

As part of continuing research performed by the Center for Retirement Research at Boston College, a survey of nationally representative employers has found that employers generally considered older workers at least as attractive as younger workers and a second survey has found that employers expect that half their employees over age 50 will lack the resources needed to retire at their organization’s traditional retirement age and half of those who lack resources will want to work at least two years longer than similar workers have in the past.

However, further examination of the second survey in "Employers Lukewarm About Retaining Older Workers", by Andrew D. Eschtruth, Steven A. Sass, and Jean-Pierre Aubry, states that employers "are only slightly more likely than not to accommodate even half their employees who will want to stay on." The paper concludes:

For working longer to become a viable response to the retirement income challenge, workers must be willing to extend their careers and employers must be willing to employ them. The results from the Center’s surveys of employers paint a mixed picture about the prospects for longer worklives. Employers surveyed expect one quarter of workers currently in their 50s will be unprepared for retirement and will respond by wanting to stay on the job at least two years past the firm’s traditional retirement age. But employers are lukewarm about retaining even half. This is not good news. It suggests the possibility of a messy and uncomfortable mismatch with large numbers of older workers wanting to stay on while employers prefer that they do not.

Source: Boston College Center for Retirement Research
Issues in Brief (May 2007)

United Kingdom: "Zenployment" Survey Shows Older Workers Searching for "Fulfillment"

According to a survey released by Norwich Union, 66% of British employees say they are "unfulfilled", "miserable" or "drifting" in their jobs, 52% claim they'd happily earn less money in a role that made them feel better about themselves, and 47% say they aim to be in a second career that offers fulfillment and the chance to make a difference ("Zenployment") by the age of 45. William Nelson, of trend analysts the Future Foundation, said: "The ethical and spiritual dimensions of work therefore are more of a priority, and people want to believe their careers contribute towards a better future - not just for themselves but for society as a whole."

The survey also found that withdrawal from work is being rejected in favor of Zenployment, with 50% saying they will not follow the traditional retirement path of their parents and 52% not aiming to put their feet up in a country cottage or villa abroad. In addition, 66% of those aged 45-54 and 72% over 55s are seeing an increasing number of their friends move into second careers.

Source: Norwich Union News Release (May 11, 2007)

Rhode Island: Legislature Again Takes Up Unemployment Benefits and the Social Security Offset

Neil Downing, a columnist for The Providence Journal, writes again about the unfairness to older workers of Rhode Island's law offsetting unemployment benefits for social security benefits. He reports on House hearings on a measure (H5296) that would end the Social Security offset, which follows Senate passage of a similar bill (S0161). "No one spoke in opposition, but there were several supporters, including the AARP, a membership organization for people 50 and older."

Source: The Providence Journal "State law penalizing older workers" (May 9, 2007)

Subsequent History: The House passed H5296 on May 30, 2007.

Australia: ACT Launches Project To Encourage Businesses To Hire Older Workers

Australian Capital Territory (ACT) Chief Minister Jon Stanhope and Chris Peters of the ACT and Region Chamber of Commerce and Industry have launched a "Silver Lining" project to educate employers about the benefits of hiring and retaining seniors in their businesses. In particular, with the baby boomer generation nearing retirement age and the generations coming after being considerably smaller, business should not shun seniors from the workforce and they should be educated that common myths about older works are untrue.

Mr Stanhope said:

“Research shows that workers aged 55 and over are the most motivated and engaged. Older workers are known for their reliability and stability, with research showing that they stay in a job 2.4 times longer than a younger person.

“Given the high cost of staff turnover this level of stability alone represents a great opportunity for business.”

Source: Australian Capital Territory Media Release (May 8, 2007)

Norway: Statistics Show Increase in Employment of Older Workers

According to a report in Aftenposten, numbers releaed by the state statistics bureau (SSB) showed an increase in the number of older workers getting back into the job market. Faced with a labour shortage, many employers have started welcoming retirees who want to go back to work. Specifically, workers aged 67-74 boosted their share of the workforce by 4%, while there were 1.5% more workers aged 55-66 during the first quarter of 2007. The article did note, however, that most of the older workers are in part-time positions, working less than 20 hours a week.

Source: Aftenposten "Jobless rate steady" (May 4, 2007)

Switzerland: Employers Lag Behind Other European Countries in Dealing with the Challenges of Aging Workforce

According to the Adecco Institute's first Demographic Fitness Index for Swiss companies, Swiss companies are less prepared for their aging workforce than the average of selected European Union member states. Specifically, in comparison with 7 EU countries (United Kingdom, France, Italy, Spain, Germany, Belgium and the Netherlands), Switzerland only ranks second last.

By 2020, compared to the year 2000, there will be over one third more Swiss workers aged 50 to 64 years, and one fifth less workers aged 30 to 44 years. While Swiss companies' awareness about these demographic changes is very high, they are among the least prepared in Europe, with almost half of all firms putting no thought at all into this and not taking measures in order to react. In fact, most (nearly 60%) have done no analysis of their company age structure.

Source: Adecco Institute Press Release (April 17, 2007)

United Kingdom: Minister Addresses Learning and Older Workers

In a speech to the Associate Parliamentary Skills Group, Bill Rammell--Minister of State for Higher Education and Lifelong Learning--addressed the Leitch Review of Skills and specifically the challenge to engage older workers in obtaining the skills they need to succeed, given that those 50 and older are less likely than younger people to be interested in learning and tend to have fewer formal qualifications.

Rammell said that "the government is taking the needs of this group seriously" and that "[e[mployers must draw on the full range of skills and talents of the whole of the workforce" and, in fact, "will have to attract older people in order to support their own future growth." He addressed a number of government initiatives, but he rejected any need (as expressed in the Skills Forum report) to recognise that older workers learn in a different way to everyone else, a difference that should be recognised in qualification design and teaching methods: "[A]s someone approaching the accepted lower age limit for an older worker I find the idea slightly insulting. We can’t lump all older learners together to be treated differently from everyone else."

In concluding, Rammell said that he is optimistic about promoting and communicating our policies and programmes to all adults regardless of age. "It is easy to point to lower participation rates for older workers than for younger ones. But the situation is changing. Over the last 10 years the number of learners in Further Education aged 60 and above has more than doubled--from 113,000 in 1997 to almost 270,000 today." In addition, "[a]s greater numbers of older people remain in, or return to, the workforce I expect this to increase further, not least because most training is through employers."

Source: Department for Education and Skills Speech (April 25, 2007)

Survey: Twenty Percent of Workers Plan To Stay at Work until They Die

According to a financial literacy poll conducted by Bankrate, Inc., nearly 20% of individuals plan to work until death, with the percentage rising with age, so that 40% of seniors surveyed saying they will work until death. In addtion, 28% of those surveyed save less than 5%, including 16% saving nothing at all for retirement. Nevertheless, six out of ten Americans "never worry" or worry "not very much" about outliving their retirement savings and, in fact, 27% plan on quitting in their 50s.

"If you're age 65, one of the key things that keeps you coming to work is the desire to avoid touching your IRA and nest egg for as long as you can," says Tim Driver, founder of the Web site, Retirementjobs.com. "Many of these people have lived through the Depression. They grew up in an environment where watching pennies was the norm. Many of them are working for healthcare, too. It's by far and away the largest concern for that group."

Source: Bankrate, Inc. News Release (April 23, 2007)

Survey: Few Employers Are Taking Action to Recruit and Retain Older Workers; Manpower Offers Up Recommendations

According to a survey conducted for Manpower Inc. of more than 28,000 employers across 25 countries and territories, only 14% of employers worldwide have strategies in place to recruit older workers and only 21% have implemented retention strategies to keep them participating in the workforce.

The published results of the survey-- Older Worker Recruiting & Retention Survey--break down recruitment and retention by country and industry. Among different countries, employers in Japan and Singapore were far ahead of their international counterparts with 83% and 53% of employers surveyed, respectively, working proactively to retain their older employees; at the other extreme, in Italy and Spain, only 6% of employers had such strategies in place.

"Many employers have not yet recognized the need to forecast the percentage of their workforce that is set to retire in the next five to 10 years and planned ahead to stem the potential loss of productivity and intellectual capital that will occur when those people walk out the door," said Jeffrey A. Joerres, Chairman and CEO of Manpower Inc. "A surprisingly large number of organizations are still viewing upcoming retirements as cost- savings opportunities, but this is a dangerous and shortsighted view, as older adults will be relied upon as one of the most important sources of talent for the future workforce."

Simultaneously with the survey results, Manpower issued a white paper--"The New Agenda for an Older Workforce"--which explores the increasing reality of the global aging workforce, the resulting gaps in workforce supply, and the demand that this is creating. Among other things, the white paper proposes strategies that companies can adopt to circumvent these talent challenges; recommendations on how employers can help older employees extend their careers should they choose to do so; and suggestions for the role that governments can play to help solve the older worker conundrum.

Source: Manpower Inc. News Release (April 23, 2007)

Survey: Global Consumers Anxious About Retirement, Savings

Aviva, which conducts a global annual survey of consumer attitudes to savings, released findings from its latest survey showing that only 45% of its global sample are saving regularly (only 36$ in the United Kingdom), despite people in most markets agreeing that investing or saving regularly is the most practical way to live comfortably in retirement. In addition, the survey shows that:

• there are persisting high levels of anxiety over retirement, with people knowing that having enough money in retirement is important but in many countries, Eastern Europe in particular, few are taking steps to protect themselves;
• over 40% of retired people, and even more in emerging markets, wish they had done something earlier to provide for their retirement; and
• over 40% of people globally feel that financial planning for retirement is too complex.

In addition, the survey shows that in the United Kingdom, around half of those surveyed accept that they are going to have to work beyond their normal retirement date to fund their retirement.

In order to engage more consumers in financial planning for the future, Aviva has launched www.six-steps.org, a free, unbiased planning resource to help people make informed financial decisions about their retirement.

Source: Aviva PLC News Release (April 19, 2007)

Commentary: Older Workforce a Competitive Advantage for Europe

Nicholas Eberstadt, senior adviser to the National Bureau of Asian Research, and Hans Groth, member of the Board of Directors for Pfizer-Switzerland AG, suggest in a commentary in the the International Herald Tribune that while Western Europe demographic pressures are undoubtedly heavy, the aging population does not meen that the Continent need not become a glorious rest home. Since its aging population is exceptionally healthy, its people are more capable of remaining productive into their advanced years now than they used to be--perhaps even more so than their American counterparts--so that "healthy aging" may turn out to be a trump card for enhancing prosperity and international competitiveness.

In their essay, adapted from an essay to appear in the May-June 2007 issue of Foreign Affairs, Eberstadt and Groth state that, for example, Western Europeans have distinctly better odds of surviving their working years than do Americans. The prospect of living longer generally encourages investment in learning and skills and thus facilitates higher productivity. "Western Europe must therefore figure out how to capture more of the economic opportunities allowed by healthy aging."

Encouraging older people to work is an obvious and necessary step to unlocking the economic potential of good health over the next generation. But it is only one step. Making fuller economic use of this comparative advantage will require nothing less than a fundamental re-examination of many basic policies, especially regarding labor markets, education and health.

If Western Europe hopes to benefit from its growing pool of older workers, its labor markets must become far more flexible, and economically rational, than they are today. Less cumbersome regulations and less costly obligations would make it more attractive and less risky for potential employers to hire all prospective workers, including older ones. Some orderly transition to a pension system with a greater measure of direct personal responsibility in the financing of retirement would also be in order.

Source: International Herald Tribune "Healthy old Europe" (April 19, 2007)

EBRI Reports Americans Experience Retirement System Changes, but Not Responding to those Changes

According to the Employee Benefit Research Institute (EBRI), "a large percentage of American workers recognize the U.S. retirement system is undergoing major changes, but many are not adapting in ways that are likely to leave them well-positioned for a comfortable retirement." EBRI's 17th annual survey or retirement confidence, sponsored with Mathew Greenwald & Associates, finds that finds pension-plan changes by employers have left nearly half of workers less confident about the benefits they will receive from a traditional pension plan, but that many workers are counting on employer-provided benefits in retirement that are increasingly unavailable.

The report--"The Retirement System in Transition: The 2007 Retirement Confidence Survey"(EBRI Issue Brief #304)--finds tht almost half of workers are saving for retirement but that total savings and investments (not including the value of their primary residence or any defined benefit plans) of less than $25,000, and that the majority not putting money aside for retirement have little in savings at all.

“We have known for decades that major changes were taking place in the U.S. retirement system,” said Jack VanDerhei, a Temple University professor, EBRI fellow, and co-author of the 2007 Retirement Confidence Survey. “This year, we found that a substantial number of workers realize that the shift from traditional pensions to 401(k) plans affects them personally. Unfortunately, only 24 percent of those affected indicate that they will save more on their own, and only 8 percent indicate that they will save more in the employer’s plan as a result of these changes. EBRI research suggests that the vast majority of employees are likely to need some type of additional savings if they hope to end up with the same amount of retirement savings they would have expected prior to the change.”

Source: Employee Benefit Research Institute News Release (April 11, 2007)

New York: Legislature Considers Establishing Mature Worker Taskforce

The New York State state legislature is to consider establishing a mature worker taskforce among other programs aimed at confronting the state's radidly aging population. The goal of the taskforce woudl be to help guide policy to make workplaces friendlier for seniors.

The legislation to establish the Mature Worker Task Force (A5565 in the Assembly, and S3058 in the Senate) would create a 19-member task force in the State Office for the Aging to identify and address legal provisions that may limit opportunities for mature workers; identify best practices in the private sector for hiring, retaining and retraining mature workers; serve as a clearinghouse for such information; and assess the effectiveness and cost of programs that the state has implemented to hire, retain and retrain mature workers.

A separate bill introduceed in the State Assembly, A05566 (and the parallel Senate bill S03060) would establishe "a mature worker employment and training program to help workers ages 55 and older be prepared for continuing their employment after their retirement, or being trained or retrained for second careers or other work opportunities."

Source: Legislative Gazette "Budget includes major reforms for elder care" (April 16, 2007)

Japan: Expert Group Calls for Boosting Number of Elderly Jobholders

Writing for the Daily Yomiuri, Junichi Abe reports that an expert study group of the Council on Economic and Fiscal Policy has called for boosting significantly the number of jobholders, especially among women and the elderly, by diversifying the ways people can work, and tailoring jobs to fit individual lifestyles and stages in life.

With respect to older workers, the report on formulating an "action guideline to change ways of working" recommended the the employment percentage for people aged 60 to 64 should be increased to 66% by 2017 from the current 53% and that, for those aged 65 to 69, it should be raised to 47% from the current 35%.

The report also clarified the roles the government should play to enhance the ratio of jobholders among the elderly.

It says if the government-proposed bill for revising the Employment Measures Law to ban, in principle, employment discrimination due to age is enacted, ministries concerned should lose no time in working out ways to ensure effective enforcement of the law.

Source: The Yomiuri Shimbun "New ideas for aging problem: Panel's plan calls for employers, govt to help changing workforce" (April 11, 2007)

Survey: AARP Finds High Interest in Nevada in Working after Retirement Age

According to an AARP membership survey in Nevada, 32% say they are extremely (21%) or very likely (11%) to work beyond retirement, but slightly more (36%) say that for them it's not at all likely. The report was prepared by Jennifer H. Sauer, M.A., AARP Knowledge Management, for AARP Policy & Research.

In the "AARP Nevada Survey of Members: Work and Retirement", needing extra income was a major factor in the decision of those likely to continue working beyond retirement, but having health insurance coverage, building up a savings, enjoying work or the job, and paying for other health related costs are also factors influencing members to delay retirement or work again after retirement.

Employers interested in retaining or recruiting mature workers should note that AARP members in Nevada who are likely to continue working through traditional retirement indicate that flexible work schedules and incentive pay are highly influential factors in their decision to keep working. Additionally, two-thirds of those likely to keep working say a that a job allowing them to use their skills and expertise is extremely or very important to them, and half say that a job suited to family and personal life is also extremely or very important to them when thinking about working beyond retirement.

Source: Research Reports "Survey of AARP Nevada Members" (February 2007)

Australia: Second Intergenerational Report Released

The Treasurer of Australia has released Australia’s second Intergenerational Report, focusing on the implications of demographic change for economic growth and assessing the financial implications of continuing current policies and trends over the next four decades. Over the next 40 years, the ageing of the population (specifically the impact of relatively fewer people of traditional working age) is projected to slow economic growth, with real GDP per person rising more slowly than in the past 40 years, and, at the same time, spending pressures in areas such as health, age pensions, and aged care are projected to rise, due to demographic and other factors.

Among manyt other things, the report shows that the rate of mature-aged men still in the workforce rose from 60% in 1997 to more than 66% in 2005, slightly higher than the OECD average that year. The participation rate for people of traditional working age (15-64 years) is projected to rise from 76.2% in 2006-07 to 78.1% by 2046-47, mainly due to an increase in participation rates of older workers (aged 55-64 years).

Decisions by individuals to participate in the labour market are influenced by their capabilities, the incentives in government programmes and the flexibility of the labour market to match job seekers with employment opportunities and pay. Spending programmes which provide income support and the personal tax system need to have appropriate incentives to provide a return for working and to provide support, including in times of unemployment or situations of disability. The capabilities of people can be improved through better health and education. The flexibility of the labour market, the range of jobs, qualifications, hours and rates of pay also influence people’s decisions about labour force participation. Continued attention to all of these influences, as well as the maintenance of a strong macroeconomy that maximises employment opportunities, will be necessary.

Source: The Australian Government Treasury Intergenerational Report Home (April 2, 2007)

Additional Source: The Age "Retirement no option for generation of older workers" (April 3, 2007)

More Californians Are Working At or Near Retirement

A California Budget Project (CBP) report shows that Californians are working later in life than they once did. The share of Californians approaching or at the traditional retirement age--age 65 and older--who are employed increased considerably between 1995 and 2006, after a decade and a half of little change.

According to the CBP's Policy Points, “More Californians Are Working Later in Life”, this trend reflects a number of factors, including improved health and longer life expectancy, as well as diminished retirement security. While both financial and non-financial factors motivate people age 55 to 70 to work, the need for money was the most frequently cited reason for working among those in their late 50s and early 60s.

Source: California Budget Project Press Release (April 2, 2007)

Wisconsin: Effect of Aging Workforce on Milwaukee's Employers

Elizabeth Hockerman, writing for the Small Business Times in Milwaukee, Wisconsin, reports that Milwaukee employers will soon be confronted by a severe labor shortage caused by a cascade of aging and retiring baby boomers, who will be followed by a much smaller generation. Among other things, she reports on a report by Senior Service America that Wisconsin’s labor shortage will be particularly acute: “All of the growth in the working-age population of Wisconsin (by 2015) will be generated by persons 55 and older … The graying of the Wisconsin population will clearly accelerate after 2010 in the absence of a substantial increase in either domestic in-migration or a sharp rise in foreign immigration.”

Before employers look to train unskilled workers or entice college students and young professionals to stay in the Wisconsin workforce, they are going to have to work with their older employees to find ways to keep them on board even after they plan to retire.

“We are lucky in a perverse way that many boomers have not planned well enough for retirement – they will be seeking to continue to work and earn an income,” said Sammis White, director of the University of Wisconsin-Milwaukee Center for Workforce Development, associate dean of the School of Continuing Education and professor of urban planning. “But employers must be convinced that they should look to the boomers as part of the solution for the impending worker shortage. They definitely must be.”

Hockerman writes about some Milwaukee employers that are responding flexibly with, among other things, mentoring programs and plans to become an employer of choice among older workers.

Source: Small Business Times The Graying of Milwaukee (March 2, 2007)