McIntosh sits in her Kalkin Hall office surrounded by tomes and articles,
all neatly organized and fingertip accessible. As the School of Business
Administration professor warms to the subject shes been researching
for twenty-five years employment and older workers she reaches
for one or another report to confirm the statistics shes already
quoted, accurately as usual. On the leading edge of the so-called baby
boomer generation herself, McIntoshs interest in what she describes
as the retirement boom about to explode wraps the personal
into the professional. Boomers (now 41 to 59 years old) are only one component
of the issues surrounding retirement and increasing workforce participation.
But with 76 million of them in the United States, their coming exit from
the workforce, McIntosh says, will leave critical gaps in the labor force,
even as their generation faces an uncertain retirement. McIntosh,
chair of the National Older Worker Employment Partnership, part of the
National Council on Aging, recently was appointed to the Leadership Council
of NCOA. That and similar involvement in the field will continue in her
own not-too-distant retirement. She notes: People who plan for this
life event are much happier. My own retirement will probably just become
a more reasonable working life.
do you call retirement the R word?
it to just an initial simply because it doesnt fit anymore. The
word has the connotation of relaxing, pulling back, stopping what youre
doing, and that just doesnt describe how older Americans behave
today. We are continuing to work if not paid work, volunteer work
and people are incredibly active. Its what Dave Ekerdt, of
the University of Kansas, calls the busy ethic. So many retired
people tell me I dont know how I managed to work; there is
so much going on. I am so busy.
problem is that were not ready for the retirement boom about to
explode. The dramatic confluence
middle baby boomer generation, youve said, is the most dis-saving
generation ever. Couple that with findings by the 2001 Federal Reserve
Board survey that a typical worker 55 to 64 years old had $42,000
in his 401(k) and IRAs, about enough for an annuity payment of $200 a
month. What does that portend for retiring boomers?
thousand is not going to stretch very far. Lets look at the total
financial support system, what we used to call the three-legged stool;
you had Social Security, your pension, and your personal savings, your
Social Security its certainly a critical political issue
we are finally confronting. The last United States General Accounting
Office report said wed be dipping into the trust fund by 2017, and
by 2047 wed be out of money, unless something happens to the system.
For 20 percent of older Americans, Social Security is 100 percent of their
income; its 50 percent of income for 65 percent of older Americans.
Clearly were going to have to do something. The oldest baby boomers
will be able to take advantage of some Social Security benefits, but they
might not be in place for the youngest boomers. Thats one leg of
the stool, and its wobbly to say the least.
are the second leg. Only 50 percent of American workers are covered by
pension plans. Most employers have moved from defined benefit, where you
get a portion of your salary in retirement, to defined contribution pension
plans, which means you have to set up and contribute to a private account
that is portable. The changing structure has put many workers who are
covered in a less secure financial position. This leg of the stool has
third leg revolves around private savings issues: I read a couple of years
ago that middle-income workers need approximately $2 million just to maintain
their standard of living. This income group has so much to make up between
what Social Security will cover and their standard of living that baby
boomers will have to work. There simply is not the base to enable them
to retire the way their parents did.
is the current health care crisis going to affect retirements?
care is the other major pressure point. Double digit increases in costs
are here and are going to continue for at least the next five years, if
not beyond. In 2003, health care benefits accounted for 2.6 percent of
the GDP. And thats going to increase to 3.7 percent by 2010 and
7.7 percent of the GDP by 2035. The drug benefit cost under Medicare is
projected to be $85 billion in 2006; by 2013, $161.8 billion. We werent
supposed to dip into the Medicare trust fund until 2013; were dipping
into it now. The fund will be exhausted by 2019. We will not have this
hospital insurance plan for elders.
care coverage is a primary motivator for older workers to stay in or return
to the workforce; but, as
the Supreme Court made filing age discrimination suits easier, a lower
federal court ruled that it is discriminatory toward older retirees for
employers to pay more toward the health insurance of younger retirees
will the expected surge of boomer retirees affect the economy, the culture,
and the workforce?
we will need to keep working, in all likelihood, and that makes sense.
When Social Security was enacted, people lived only another few years
in retirement. Now, if you live to be 60, you can expect to live into
your mid-80s, and we all know people well into their 90s. Were looking
at 20 or 30 years in retirement. But that conflicts with remaining
involved and contributing. We are living longer, healthier lives, and
there is no reason not to work. The vast majority of boomers report they
would like to work after retirement, but only part-time.
we can expect that most of us will keep working in more flexible work
arrangements because of predicted labor shortages. According to the Bureau
of Labor Statistics, the pool of workers ages 35 to 44 will shrink by
7 percent between 2002 and 2012. Employers will need to make a much greater
effort to retain their older, experienced workers.
we are changing dramatically. Psychologists talk about social cognition,
how we interpret the environment around us and internalize those attitudes
in terms of our own behaviors. For example, when Im watching a marathon,
Im thinking, My goodness, this person is almost half again
as old as I am and theyre out there running. We see examples
of successful aging around us, and we change our view of ourselves and
or not we continue to fight aging on the physical appearance front is
going to be interesting. I suspect there are a lot of people who are going
to say, Im not having a facelift. I like my gray hair, there
are a lot of other people with gray hair, so who cares. A few wrinkles
toward the balance of work and leisure seem to have changed with the boomer
generation. How will that affect the labor supply?
going through a transition period here, not only in terms of the role
of work but also in whats happening to compensation and leisure
consumption. We older boomers have been attached to our toys, and a lot
of thats leisure related. Were talking obviously about the
middle class, but we have been very affluent.
workers can expect to have seven to ten jobs and three different careers
in their lifetime. Now, if youre interrupting your jobs more frequently,
you have the opportunity for more and extended leisure. At the same time,
were going to have dramatic labor shortages. It will enable older
workers to keep working, because their experience is going to be needed.
retirements seem to have arrived. Are employers reacting to that fact,
and will the recent Supreme Court ruling on age discrimination in the
workplace help to reshape their practices?
percent of Americans in the latest AARP study agreed there was age discrimination
in the labor market; around 50 percent had personal experience with it
not getting the promotion, the training, the upgrading, not being
challenged basically being sidelined in their jobs.
are going to have to change their practices in every area of human resource
management. The recent Supreme Court ruling on age discrimination in the
workforce will make the issue more visible. And, with the pressure of
baby boomers demanding their rights, employers will not be able to engage
in cookie-cutter practices. You cant, for example, put everyone
in the same room for computer training. Younger workers have grown up
with computers and can intimidate older workers, who will take longer
to grasp the training. Once theyve got it, however, they usually
work more error-free than younger workers.
evidence tells us, however, that older and younger workers get along very
well. Employers should be looking at the use of mentors, in both directions,
and promoting respect and supportive environments for all ages.
noted some areas in our workforce already seeing critical shortages, particularly
nursing. Whats happening in that field?
nursing my canary in the coalmine, because what happens with this field
is going to be predictive about what happens across many other occupations.
In Vermont, theres a 13 percent shortfall, pretty much the national
average, and we are looking at a 20 percent shortfall in the next ten
to 15 years just when the oldest boomers are going to need more
services. Theres a real bottleneck in the education system. Because
we do not have enough PhD-qualified nurses to teach, there are schools
around the country turning away the young women and men theyre actively
In the research weve been doing with the Office of Nursing Workforce, we found that older nurses are more committed to their jobs and not dissatisfied overall. They still want to be nurses and this is a critical occupation where hospital administrators and doctors can work on retention. Nurses deserve respect, and they report wanting challenging work and career change. Rather than losing them, we should work with 40-year-olds, helping them to explore their options within the setting or within the profession. One option is to help them transition into jobs in geriatrics, where there is a huge shortfall. We need to create part-time positions and stop putting them into double shifts. With the predicted shortages, well be burning them out faster than ever if we dont start changing our management practices.