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Money, Insurance & Investments for Seniors
Number of Senior Citizens in Workforce Rapidly
Climbing, Says New Report
Aging Committee releases report by Taskforce on the
Aging of the American Workforce
|
Labor Force Participation Rates,
1994–2005 |
|
|
MEN |
WOMEN |
|
|
65
to 69 |
70+ |
65
to 69 |
70+ |
|
1994 |
26.8% |
11.7% |
17.9% |
5.5% |
|
2000 |
30.3% |
12.0% |
19.5% |
5.8% |
|
2005 |
33.6% |
13.5% |
23.7% |
7.1% |
Feb. 15, 2008 – Senior citizens face a number of
financial challenges in the years ahead – out of control healthcare
costs, Social Security payments not keeping pace with their inflation,
increasing charges by Medicare, and more - and this appears to be
forcing more seniors back into the workforce. A new report says the
number of seniors working is expected to grow by 74% by 2014, with 2004
as the base.
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|
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The findings of the Taskforce on the Aging of the
American Workforce were released yesterday by Chairman Herb Kohl (D-WI)
and Ranking Member Gordon H. Smith (R-OR) of the U.S. Senate Special
Committee on Aging.
The taskforce was created at the request of
Senators Kohl and Smith in an effort to expand opportunities for older
Americans choosing to remain in the workforce, and to develop proposals
to address the challenges and opportunities of an aging workforce.
“I'm glad to finally be receiving this report.
Since this taskforce convened in May 2006, nearly 5 million baby boomers
have reached retirement age,” said Senator Kohl.
“While the report provides a broad overview of
several legal and regulatory barriers, what we really need to focus on
is creating innovative workplace practices and providing attractive
employer benefits to facilitate the hiring and retention of older
workers.”
“By 2025 labor force growth is expected to be less
than a fifth of what it is today,” said Senator Smith.
“The goal of the taskforce is to prevent this
dramatic decline through strategies that encourage extended work life
and remove barriers that hinder seniors from working longer. This
report is a good first step in what must be an on-going effort to ensure
the door stays open for our seniors who wish to remain an active part of
the U.S. workforce.”
The interagency effort was launched in May 2006 to
focus on the aging of the American workforce and the impact of this
demographic change.
The Taskforce on the Aging of the American
Workforce was charged with two primary goals:
(1) identifying strategies to enhance the ability of older Americans to
remain in or re-enter the labor market and pursue self-employment
opportunities; and
(2) identifying strategies to enable businesses to take full advantage
of this skilled labor pool.
The report presents strategies developed by the
taskforce to address the most significant issues related to the aging of
the American workforce.
Among other suggestions, the taskforce recommends
creating an interagency group to inventory the legal and regulatory
barriers and disincentives to employment of older workers. The
interagency will identify the pros and cons of specific approaches to
addressing each barrier.
The taskforce also recommends making educational
resources on retirement and financial literacy available to older
workers at One-Stop Career Centers and local Social Security
Administration offices.
Kohl is currently working with Smith on a bill that
would remove barriers to working longer and incentivize employers to
hire older workers.
The U.S. Senate Special Committee on Aging plans to
hold a hearing in the spring on what the federal government can do to
engage and retain older workers. The Committee will highlight some of
the federal government’s current best practices in this arena, and look
to ways improvements can be made.
A second bill will likely be introduced around this
time to make the federal government’s current hiring practices and
procedures more friendly to older workers and will focus on increasing
work schedule flexibility and phased retirement options.
Last year, Kohl introduced two bills: the Older
Worker Opportunity Act of 2007 (S.709) and the Health Care and Training
for Older Workers Act (S.708), both of which would give older Americans
the opportunity to work longer if they so choose and offer incentives to
businesses for employing older workers.
The Taskforce on the Aging of the American
Workforce is composed of senior representatives from nine federal
agencies: the Departments of Commerce, Education, Health and Human
Services, Labor, Transportation, and Treasury; the Equal Employment
Opportunity Commission; Small Business Administration; and Social
Security Administration. The Taskforce is chaired by Assistant Secretary
of Labor for Employment and Training, Emily Stover DeRocco.
A copy of the report is located at
http://www.aging.senate.gov/letters/agingworkforcetaskforcereport.pdf
Excerpt from Report
Senior Citizen Work Force Expected to Grow by 74%
from 2004 to 2014
Since 1950, and until recently, labor force
participation rates decreased for men, age 55 and older, and increased
for women in the same age group. In the past, a “culture of retirement”
in the United States led many individuals to retire earlier than they
might otherwise.
|
Labor Force Participation Rates, 1950 to 2000 |
|
|
MEN |
WOMEN |
|
Year |
55 to 64 |
65 and up |
55 to 64 |
65 and up |
|
1950 |
86.9 |
45.8 |
27.0 |
9.7 |
|
1970 |
83.0 |
26.8 |
43.0 |
9.7 |
|
1990 |
67.8 |
16.3 |
45.2 |
8.6 |
|
2000 |
67.3 |
17.5 |
51.8 |
9.4 |
Since the 1990s, however, workforce participation
rates for older men have begun to rebound, as indicated in table below.
|
Labor Force Participation Rates, 1994–2005 |
|
|
MEN |
WOMEN |
|
Year |
55 to 61 |
62 to 64 |
65 to 69 |
70+ |
55 to 61 |
62 to 64 |
65 to 69 |
70+ |
|
1994 |
73.8 |
45.1 |
26.8 |
11.7 |
55.5 |
33.1 |
17.9 |
5.5 |
|
2000 |
74.3 |
47.0 |
30.3 |
12.0 |
58.3 |
34.1 |
19.5 |
5.8 |
|
2005 |
74.7 |
52.5 |
33.6 |
13.5 |
62.7 |
40.0 |
23.7 |
7.1 |
According to both medium - and long-term
projections, the overall labor force participation rates are expected to
have a slight decrease. However, the 55 and older age group is the only
age group which has experienced a strong growth in its participation
rates since the end of the 1980s. This increase in the labor force
participation rate of the 55 and older workers is projected to continue
in the future. In 1996, the participation rate of this group was 30.3
percent.
A decade later, in 2006, the participation rate of
this group increased to 38 percent.
Women between the ages of 55 and 64 have been
steadily increasing their labor force participation rates from 42
percent in the mid-1980s to 51.9 percent in 2000. According to the BLS,
this figure is expected to reach 56.7 percent by 2015.
Between 2004 and 2014, the number of people in
the labor force ages 55 to 64 is projected to increase by 42.3 percent,
and the number of labor force participants age 65 and older is expected
to grow by nearly 74 percent.
Because the U.S. workforce is aging, the projected
tide of retirements could dramatically affect productivity and profits.
Furthermore, unless the wave of retirements is more gradual than
anticipated, employers not only will have fewer workers, but also will
have fewer leaders.
In many companies, younger workers remain
relatively inexperienced because of the predominance of Baby Boomers in
important management and other leadership roles. The impact of the aging
population will vary across regions, industries, and skill levels. The
loss of older workers’ critical organizational knowledge and expertise
could be costly to employers.
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